State of New York vs Trump, et al - the civil fraud case against the Trump Organization

[pipistrelle]

She said the judge had failed to honor Trump’s due process rights, concerns that she said are exacerbated by the former president’s position as the frontrunner for the presidential nomination.

How does this give him more rights than anyone else?

[Suranis]

Because it means he has more rights and is bigger than Joe Biden, the actual President of the United States.

[pipistrelle]

Because it means he has more rights and is bigger than Joe Biden, the actual President of the United States.

Yeah, but to my way of thinking he and I should be on same level in court. Except I’m not in court.

[NewMexGirl]

Because it means he has more rights and is bigger than Joe Biden, the actual President of the United States.

Yeah, but to my way of thinking he and I should be on same level in court. Except I’m not in court.

Consider this my notification to the People of these United States of America that I am running for prez. The Party. I want all the rights, too.

[chancery]

It's another illustration that our country cannot function properly without at least some degree of good faith by public figures.

There is a longstanding bipartisan Department of Justice policy against

"select[ing] the timing of investigative steps or criminal charges for the purpose of affecting any election, or for the purpose of giving an advantage or disadvantage to any candidate or political party.” Prosecutors are encouraged to contact the Public Integrity Section of the Criminal Division for further guidance regarding “the timing of charges or overt investigative steps near the time of a primary or general election.”

See https://www.lawfaremedia.org/article/ju ... open-abuse

As the cited article notes,

ambiguities remain. When does the policy kick in—that is, what constitutes an act “near the time” of an election? Does that mean 60 days before an election? 90 days? After Labor Day (as one of us believed when he was a federal prosecutor)? The exclusion period is not specified, nor would that be a simple thing to do.

Trump probably does have some due process rights under the DOJ policy. However, the policy was never intended to be a get-out-of-jail card for someone campaigning a long time before an election. The Justice Department officials who framed and continued the policy also never contemplated a candidate who engaged in extremes of lawless behavior. In the face of someone like Trump, the policy breaks down.

The position of Trump, his supporters, and lawyers is that he is not subject to the law, period. OTOH,

https://twitter.com/WalshFreedom/status ... 936466080

Jen Taub reposted
Joe Walsh
@WalshFreedom
This is what a fascist dictator does. This is fascism. In his own words, he’s telling you how fascist he will be.

Peter Baker
@peterbakernyt
·
A signal from Trump that did not get much attention: “If I happen to be president and I see somebody who’s doing well and beating me very badly, I say, ‘Go down and indict them.' They’d be out of business. They’d be out of the election.” ⁦@sbg1⁩ https://newyorker.com/news/letter-from- ... ing-louder

[chancery]

Jay Kuo is new to me. He's apparently a former appellate litigator, a human rights activist, manager of George Takei’s social media efforts, and lots of other things. Bio here: https://www.actl.com/docs/default-sourc ... uo-bio.pdf

I thought the following substack post was worth reading.

https://statuskuo.substack.com/p/did-iv ... um=reader2

She’s poised. She’s polite. And she’s a fraud.

Ivanka Trump reminds me a lot of the complicit, enabling Republican officials who are now trying desperately to sanitize their past with Donald Trump and put distance between themselves and him. It’s just really awkward watching his own daughter do it.

Ms. Trump showed up to testify in the New York civil fraud case on the final day of the state’s case. She came despite being such a busy mom with school and all. But what she didn’t come with is much of a memory.

She repeatedly claimed an inability to recall details of the crucial loans she helped land, and of the questionable financing behind them.

But no matter. Attorney General Letitia James came with receipts. She showed her document after document—which Ms. Trump claimed not to remember but importantly did not dispute—that together completed a critical piece of the puzzle: How exactly did Donald Trump manage to get $300 million in loans from Deutsche Bank in 2011, when no other bank would come near him at the time?

It turns out, Ivanka Trump helped close the deal. She was quite aware of the fraud her father was perpetrating about his net worth. And in something of a “Perry Mason” moment in court, she helped establish that her father’s “personal guaranty” to secure the loan was bogus. In fact, Trump had secretly made his own children, including Ivanka, promise to cover him on the guaranty. That meant it wasn’t really a personal guaranty at all. It was fraud, and Ivanka helped perpetrate it.

Let’s take a closer look at that deal, her involvement in the fraud, and what this could mean for the case legally.

Building the record

Judge Arthur Engoron already ruled that the Trump Organization and the Trump family committed fraud in their financial statements in an effort to obtain more favorable loans. What he’s weighing now is how much to penalize the defendants. But it really helps to have the backstory on how this all happened, and that’s where Ivanka Trump comes in.

Back in 2011, most banks wouldn’t come near Donald Trump. He was radioactive, given his prior bankruptcies, including one that happened just two years prior with Trump Entertainment Resorts. And if he ever did get a loan, it would be an expensive one given the risks he posed as a borrower.

Enter Jared Kushner, Ivanka Trump’s husband. Kushner introduced a banker named Rosemary Vrablic from Deutsche Bank. While commercial lenders wouldn’t touch the loan, Vrablic, who was in the bank’s private wealth management group, was willing to work with Trump on the financing. The question was, what kind of assets would Trump have to show, and what kind of personal guaranty would satisfy higher-ups at the bank?

Enter Ivanka Trump. She helped negotiate the deal on the loans, including a loan to convert the Old Post Office in D.C. into a Trump hotel property. In exchange for the loan, Deutsche Bank asked for two things:

1) for Donald Trump to personally attest that he had a personal net worth of $2-3 billion dollars based on his (wait for it) annual statements of financial conditions; and

2) a personal guaranty from Donald Trump that he could cover all of the interest and principal on the loan, including operational expenses of each of the properties being financed, should the Trump Organization not be able to make good on its obligations.

Both of these requirements were going to be problems. So Ivanka Trump helped solve them.

Perpetrating fraud and “guaranteeing the guaranty”

As she acknowledged in an email exchange with a Trump Organization lawyer named Jason Greenblatt, Ivanka Trump knew that the request for a net worth attestation required by Deutsche Bank was “going to be a problem.”

Not, apparently, for her father. Donald Trump ultimately claimed to Deutsche Bank that he not only had the $2.5 billion in net worth (exclusive of his brand) that the bank had required, he had over $4 billion in assets.

Ivanka Trump knew this claim was untrue. In fact, she had worked to negotiate a reduction in the asset requirement from $3 billion down to $2.5 billion based on her concerns.

Then, another gotcha moment by the state. As Lisa Rubin of MSNBC, who was in attendance during the testimony, summarized:

The AG’s lawyer just showed Ivanka proof that despite making a personal guaranty to Deutsche Bank in connection with the Old Post Office loan, Trump then entered into an agreement with his adult kids, through which each agreed to pay him money through their revocable trusts to ensure he could meet that obligation.

In other words, as Linda Richmond would say, “Trump’s personal guaranty was neither personal nor a guaranty! Discuss.”


When the loan terms based on these fraudulent representations came through, Ivanka Trump was ecstatic. “It doesn’t get better than this,” she gushed to Vrablic. “You are the best Rosemary!” she wrote in another. (Vrablic resigned her position in 2020 after her involvement in these questionable loans raised the concerns of prosecutors and an internal bank investigation was launched into her personal purchase of a piece property owned in part by Kushner, who was her client.)

Legal impact of her testimony

So is Ivanka Trump in legal peril? Likely not, sad to say. In June, a New York appellate court dismissed her from the civil fraud suit on statute of limitations grounds. By 2016, she had wisely stepped away from running any of the company and assumed a position in the White House, and she doesn’t stand accused of any misconduct during that period.

But that doesn’t mean her testimony, however matter-of-factly and without drama it was given, won’t have a potentially significant impact on the trial. Because there is no jury in this case, Judge Engoron will be writing an opinion and making factual findings. Those findings will stand so long as there is substantial evidence in support of them. And through her testimony and authentication of documentary evidence, Ivanka Trump has laid a solid foundation for the rest of the case.

She established that the obtaining of very favorable loan terms with low interest rates (“It doesn’t get better than this!”) was contingent upon two representations by her father, both of which she knew were fraudulent: the inflated statement of net worth (“going to be a problem”) and the personal guaranty (the one her dad wanted her to cover for him.)

Her testimony wasn’t like the wrestling match that Donald Trump got into earlier in the week. Rather, it was like a chess tournament, quiet and plodding—but with a checkmate at the end.

I don't actually know if it's fraud for a guarantor to arrange for other parties to backstop the liability. One could argue that it shouldn't matter to the guaranteed party, so long as the guarantor remains on the hook. But I suppose it suggests that the guarantor himself is worried about his ability to cover the liability from his own assets, which might make it a material fact that should be disclosed.

Maybe

knows.

[noblepa]

I don't actually know if it's fraud for a guarantor to arrange for other parties to backstop the liability. One could argue that it shouldn't matter to the guaranteed party, so long as the guarantor remains on the hook. But I suppose it suggests that the guarantor himself is worried about his ability to cover the liability from his own assets, which might make it a material fact that should be disclosed.

IANAL, nor have I ever worked at that level of financing, but it seems to me that it DOES matter to the guaranteed party, because they had knowledge of, or opportunity to evaluate the financial status and potential risks of the "second level" guarantors.

If might have been different, had Trump told Deusche Bank that he was backstopping his guaranty with his children. But he did not do that. In that case, it wouldn't have been fraud, but it might have affected their decision to make the loan or the interest rate to be charged.

To me, that is fraud, even if the loans were, as Trump claims, ultimately repaid.

[Suranis]

I think they were repaid with further loans from Duechbank

[Rolodex]

@chancery Thanks for that substack. It puts the situation into plain language that's makes it easy to understand. I read along with the live tweeters, but I often don't understand what I'm hearing. This brings it into focus and boy it looks really bad for tfg. Oh well.

[chancery]

Here's a shorter version, from the Jack Smith parody account:

https://twitter.com/7Veritas4/status/17 ... 1212246526

Jack E. Smith
@7Veritas4
Summing up yesterday:

Good morning, Ivanka.

Ivanka: I do not recall.

It wasn’t a question.

Habba: I object!

On what grounds?

Habba: I need grounds?

You’re all caught up.

[NewMexGirl]

[neonzx]

Seems totally normal .



Slut.

[p0rtia]

Thanks, all. Fascinating!

[chancery]

I don't actually know if it's fraud for a guarantor to arrange for other parties to backstop the liability. One could argue that it shouldn't matter to the guaranteed party, so long as the guarantor remains on the hook. But I suppose it suggests that the guarantor himself is worried about his ability to cover the liability from his own assets, which might make it a material fact that should be disclosed.

IANAL, nor have I ever worked at that level of financing, but it seems to me that it DOES matter to the guaranteed party, because they had knowledge of, or opportunity to evaluate the financial status and potential risks of the "second level" guarantors.

If might have been different, had Trump told Deusche Bank that he was backstopping his guaranty with his children. But he did not do that. In that case, it wouldn't have been fraud, but it might have affected their decision to make the loan or the interest rate to be charged.

To me, that is fraud, even if the loans were, as Trump claims, ultimately repaid.

After some rooting around in the docket sheet, and going through several layers of cross-references, I found the text of one of Trump's guarantees to Deutsche, Exhibit 232, Docket # 1073. https://iapps.courts.state.ny.us/nyscef ... iJSvAnkw==

I'm not a transactional lawyer, and the document is 24 pages of dense boilerplate. However, after a quick skim, I didn't notice any express provision that would make it improper for Trump to seek a secondary guarantee of his obligations from other parties.
It may be that it would be covered by something like ¶ 9 (ix) "no fact which has not been disclosed in writing to Lender which has, or, as far as Guarantor can now reasonably foresee, will have a material adverse effect on (x) the ability of Guarantor to perform his Guaranteed Obligations or his obligations under any other Credit Document to which he is a party, or (y) the validity or enforceability of this Guaranty, etc."

But I don't presently see it, unless there are finance industry practices and understandings that make if clear that Trump should have disclosed the secondary guarantees from his children. And generally speaking, if there are industry practices and understandings on which you want to rely, you are very strongly advised to put them in writing in the transactional documents.

And failure to disclose might in some way have made Trump's statements of financial condition incomplete or misleading (note: IANAn Accountant), but it doesn't shout out at me, and I would need to be persuaded by someone with relevant experience.

So I dunno how much of a big deal the children's guarantees to Trump will turn out to be.

[Suranis]

I think its basically that the Company is basically giving the opinion of itself when asking others whether they think it could pay back the loan. Others would think its actually getting the opinion of someone outside the company, which is slightly unethical. But Trump was good at making his accountants skirt the edge of ethics and the law when he was trying to pawn his lack of anything.

[Sam the Centipede]

"transactional lawyer" — I learnt a new term today! Thx chancery!

[northland10]

But Trump was good at making his accountants skirt the edge of ethics and the law when he was trying to pawn his lack of anything.

It would appear he was good at getting somebody at the bank's private wealth group to skirt (or stomp on) the edge (or the bulk) of ethics and the law.

[Suranis]

But Trump was good at making his accountants skirt the edge of ethics and the law when he was trying to pawn his lack of anything.

It would appear he was good at getting somebody at the bank's private wealth group to skirt (or stomp on) the edge (or the bulk) of ethics and the law.

Yes he was. And apparently it caused a lot of arguing inside the bank as more people found out about it. His last loan request for $600 million caused a full scale war to break out inside the bank. The woman that was his long time contact in the bank "resigned abruptly" in december 2020

https://www.the-independent.com/news/wo ... 77859.html

Deutsche Bank loan officer who provided Trump with $300m resigns abruptly

Outgoing president owes the bank $330m



Donald Trump and Jared Kushner's longtime banker at Deutsche Bank, Rosemary Vrablic, has resigned and will leave the bank next week.

Ms Vrablic is responsible for arranging hundreds of millions of dollars worth of loans that Deutsche Bank provided Mr Trump over the years.

It was not immediately clear what caused her to leave the bank.

The Manhattan District Attorney's office is currently investigating Deutsche Bank as part of its investigation into whether or not Mr Trump committed financial crimes.

Ms Vrablic was a managing director and senior banker in the wealth management division.

The managing director - who had been with the company since 2006 - issued a statement announcing her resignation.

“I’ve chosen to resign my position with the bank effective Dec 31 and am looking forward to my retirement,” Ms Vrablic, 60, said in a statement on Tuesday.

A spokesman for Deutsche Bank, Daniel Hunter, confirmed that the company received Ms Vrablic's resignation.

“Rosemary Vrablic and Dominic Scalzi have tendered their resignations to Deutsche Bank effective as of year-end, which was accepted by the bank,” the spokesman said.

Ms Vrablic did not include a reason for her departure, aside from retirement.

The New York Times reported that in 2013, the bank opened an internal investigation into a transaction she made with Mr Kushner that involved real estate.

Dominic Scalzi, a colleague of Ms Vrbalic, who was also involved in that transaction, also announced his resignation.

Mr Scalzi and Ms Vrabalic joined the bank around the same time.

Ms Vrablic took on Mr Trump as a client in 2011, and managed to secure a $300m loan for him to use on his then-new golf resort in Miami, Florida, for his skyscraper in Chicago and for the renovation of the Old Post Office building, which was turned into a luxury motel.

Mr Trump currently owes the bank about $330m. Those loans are due in 2023 and 2024.

The president gave a personal guarantee to pay the loans back, which means the bank could pursue his assets if he does not pay them back.

However, in November Reuters reported that Deutsche was looking to settle the loans somehow in order to end its relationship with the Trumps, apparently in a bid to end the negative publicity that has come with their business dealings with the family.

So I would guess that he Bamboozled a few people in the bank about how great he was and they felt privileged to be lending to such a great man. And I know you are laughing at that, but Michael Cohen has said he has that effect on some people. Not a lot, but some.

Also you will notice that his line about "all the loans were paid back" is total bullshit, as that article says he owed the bank $330 million. The fact that people were not questioning that is again an indictment of the US Media.

[NewMexGirl]

"transactional lawyer" — I learnt a new term today! Thx chancery!

We need a “Legal Word or Expression of the Day” topic, while all these trials are going on—stuff like “interlocutory appeal,” “surreply,” etc.

[Sam the Centipede]

We need a “Legal Word or Expression of the Day” topic, while all these trials are going on—stuff like “interlocutory appeal,” “surreply,” etc.

You want it, you start it!

[Slim Cognito]

I would like to submit, WTFDTEM.

(What the fuck does that even mean?)

[Ben-Prime]

"transactional lawyer" — I learnt a new term today! Thx chancery!

We need a “Legal Word or Expression of the Day” topic, while all these trials are going on—stuff like “interlocutory appeal,” “surreply,” etc.

A "surreply" is a crushed ice beverage you get at the 7-11 next door to the law office, right? What do I win? What do I win?

[Estiveo]

Dammit, now I want a slurpee.

[p0rtia]

Dammit, now I want a slurpee.

Nothing is estoppeling you, Estiveo.

[NewMexGirl]

I would like to submit, WTFDTEM.

(What the fuck does that even mean?)

Perfection.