Trump’s $356 million fraud case reveals more of his unsavory character
Editor:
For once I can not recommend reading a case about Trump – the $356 million fraud case. It’s simply too darn complicated for anyone not willing to outline and digest materials equivalent to a college course.
Although Trump lies or engages in misdirection about everything involved, there is a fundamental legal question presented which people should be looking at.
First note that emails, appraisals and numbers in sworn statements of worth and debt were laid out in dizzying detail. They were falsified.
What bank, what department, what underwriter and the like received false information was all laid out. Many times there were email discussions of what the internal records and appraisal(s) showed and leaving them out or ignoring them. They simply ensured the right people got the wrong values. It was incredibly brazen. (That said there were a couple of up appraised property’s values which were not as strongly established by the AG. That said it would be unusual for an appeals court to reverse on the facts when the trial court indicates a belief a witness is lying and explains why.)
Second, I surprised to learn that the banks did not revalue Trump’s net worth to $2.6 billion. News reports to that effect left out a key detail. The bank actually uses 1/2 or $2.6 billion in the event of default as all they might expect to recover since they knew they would have a cut of the pie involving other creditors and expensive litigation. Therefore that is what they loaned against – and why Trump doubled and tripled values.
I expected to find problems with proving the applicable lower interest rate Trump received by inflating his net worth. That is another factual issue that is unlikely to be upset on appeal but could be. His trial estimate was obviously lower. The judge did not believe that witness.
Trump’s other deflections were resolved. Who could be believed and why was set forth in unusual detail to bullet proof the findings of fact from Appellate review which is almost always limited to law.
But to my mind the unspoken elephant in the room is way the law, the statute, was used against Trump. Usually this statute applies when business A (Trump) would lie to B (Bank) to obtain money business A (Trump) was not going to repay. This law is simplified to stop this business fraud. In this case is business A (Trump) lied to B (Bank) to pay Bank less than what the Bank was otherwise owed if the truth be told.
That may have affected the Bank’s reserve requirements but certainly increased what it had to charge other customers to stay competitive. But is it business fraud under this law? Trump calls it a matter with “no victims.”
The question, by analogy, is if it’s fair for another property owner with a property exactly like yours to get a lower property tax bill because that owner lied on his assessment (for example on square footage). Clearly not and there are legal remedies.
So in Trump’s case the question is if the 1950s (Republican sponsored) Executive Law used in this case should be used to address rich people cheating on net worth statements, hurting the bank’s projected profit, and indirectly boosting your interest rate.
The question for the Courts will be does this particular statute apply to Trump and, if not, do we insist the law be rewritten to stop this type of cheating.
The principle of transparent pricing to make capitalism work says either nail Trump or rewrite the law. Only in communist or authoritarian countries would treat this cheating as accepted business. Its strong men could engage in with impunity.
In capitalist countries it is the fraudulent conduct we expect from “gangsters.”
$356 billion to pay or not, law to amend or not, the entire episode tells us all exactly who Trump thinks he is and, in fact, is.
Conrad F. Cropsey
Albion
