It was revealed in recent weeks that President Donald Trump dramatically inflated his wealth not only to the American people in 2016 and Forbes, but when applying for loans at Deutsche Bank. But the way he did it continues to show the shocking hubris of the self-described billionaire.
In a new report from Washington Post reporter David Fahrenthold, it was revealed Trump falsely added 10 stories to Trump Tower, 800 acres to his winery property and lied about 24 “ready-to-sell” lots to his California property.
His other major asset is his “brand” value. In 2013, he calculated that it was worth $4 billion, which was double his net worth of the previous years.
The most shocking, however, is that Trump has been allowed to get off scot-free because the fraud was too ridiculous to believe.
In an interview, George Washington University professor Kyle Welch explained that Trump “could be protected by disclaimers that his own accountants added to the statements, warning readers that they weren’t seeing the full picture.”
He noted that the “sheer scale of the exaggerations” could ultimately help Trump’s case because they were “so far off from reality” that no bank would actually be fooled.
The only reason that a fraud like this would have been uncovered is if the bank went bankrupt or Trump defaulted on the loan. According to a loan officer and bank vice president that spoke with Raw Story, if the bank failed, the FDIC would come in to investigate, would uncover it and refer it to the FBI and Justice Department.
When compiling investments for loans, banks look at the assets and ask questions if they don’t believe the applicant. Banks typically have their own appraisers who look at assets and it’s unclear why that wasn’t done in the case of Deutsche Bank. If a bank discovers that the assets were overinflated, they can pursue charges, but it’s incredibly difficult to prove fraud.
If a loan applicant estimates the value of their business or property it’s one thing, but in Trump’s case, it can be proven he knew the actual size of his own building.
The loan officer also wondered if Trump signed the paperwork himself. While it was likely compiled by CPAs and lawyers, if Trump signed the documents that inflated the properties, he’s on the hook. She used Joe and Teresa Giudice on the “Real Housewives of New Jersey” as an example. The couple had representatives prepare their loan documents and signed them without reading it. In the end, they were on the hook for fraud.
The bank executive also noted that when many Oklahoma banks failed in the 1980s this kind of obvious wealth inflation was what sent many bank presidents and loan officers to jail. When the banks failed the FDIC came in to examine the loans and debts, discovering grossly inflated assets on loan applications.
Professor Welsh said that he’s never seen documents that stretch the truth as much as Trump’s.
“It’s humorous,” he said. “It’s a humorous financial statement.”
According to legal experts interviewed by The Post, the disclaimer could shield Trump from fraud prosecution. “After all, his own accountants told readers they weren’t getting the full story.”
According to former federal prosecutor Jacob Frenkel, “the transparent disclaimers — even if frustrating — typically wipe out a basis” for bringing fraud charges.
In 2007, Americans bailed out banks that made reckless loans that customers defaulted on. Democrats worked to put regulations in place hoping that it wouldn’t happen again, but Trump and the GOP led-Senate have worked to get rid of those regulations.
You can read the full report and see the documents at The Washington Post.