{"id":40084,"date":"2023-11-01T17:39:22","date_gmt":"2023-11-01T17:39:22","guid":{"rendered":"https:\/\/prosfunds.com\/politics\/trump-and-company-saved-168-million-in-loan-interest-as-a-result-of-fraud-banking-expert-testifies\/"},"modified":"2023-11-01T17:39:24","modified_gmt":"2023-11-01T17:39:24","slug":"trump-and-company-saved-168-million-in-loan-interest-as-a-result-of-fraud-banking-expert-testifies","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=40084","title":{"rendered":"Trump and company saved $168 million\u00a0in loan interest\u00a0as a result of fraud, banking expert testifies"},"content":{"rendered":"
\n

\n A banking expert testified\u00a0Wednesday\u00a0<\/strong>that Donald Trump and his company benefited more than $168 million by obtaining favorable loan terms on transactions where the former president personally guaranteed the loans.\n <\/p>\n

\n The New York Attorney General\u2019s office called Michiel McCarty to testify about his assessment of the $168 million in ill-gotten gains.\n <\/p>\n

\n McCarty analyzed the lending documents related to transactions at issue in this case for the following Trump Organization properties: 40 Wall Street in New York, The Doral Golf Resort & Spa in Florida, Trump International Hotel & Tower in Chicago, and the Old Post Office project in Washington DC.\n <\/p>\n

\n McCarty calculated the difference in interest payments that Trump might have paid with a commercial real estate loan that would have had a much higher interest rate than the rate he obtained by personally guaranteeing the loans on the basis of financial statements that inflated his net worth.\n <\/p>\n

\n He determined the Trump Organization saved on interest for the properties:\n <\/p>\n

\n $72,908,308 for the Doral Resort;\n <\/p>\n

\n $53,423,209 for the Old Post Office loan;\n <\/p>\n

\n $17,443,359 for Trump International Hotel & Tower in Chicago;\n <\/p>\n

\n and $24,265,291 for 40 Wall Street.\n <\/p>\n

\n Trump\u2019s attorney Chris Kise argued repeatedly in objections that the expert should not be permitted to suggest what loan rate Trump Org. could have gotten because no trial evidence has shown the lenders would have changed the loan terms if they knew Trump\u2019s net worth was inflated based on the asset valuation in his financial statements.\n <\/p>\n

\n Judge Arthur Engoron overruled the defense objections, reminding Kise of the summary judgment that already found Trump and his company liable for fraud before the trial started.\n <\/p>\n

\n \u201cI decided they were ill gotten. He\u2019s not deciding that \u2013 he\u2019s deciding the number,\u201d Engoron said.\n <\/p>\n

\n McCarty testified that lenders price an interest rate based on the risk they associate with the transaction.\n <\/p>\n

\n \u201cRisk is a representation of the probability of default. As [probability of default] goes up you have to compensate for the potential for loss. To do that you raise the interest rate,\u201d McCarty said.\n <\/p>\n

\n McCarty said he agreed with Engoron\u2019s assessment of the lenders\u2019 risk exposure in the loans with Trump Organization that were backed by Trump.\n <\/p>\n

\n \u201cThe subject loans made the banks lots of money, but the fraudulent [financial statements] cost the banks lots of money. The less collateral for a loan, the riskier it is, and a first principal of loan accounting is that as risk rises, so do interest rates. Thus, accurate [financial statements] would have allowed the lenders to make even more money than they did,\u201d Engoron wrote in his summary judgment ruling.\n <\/p>\n

\n McCarty said that had Trump went with a commercial loan that relies on the risk rating of the actual property. The Doral Resort and the Old Post Office loans held lower credit ratings at the time of the transactions because they were considered riskier projects that required high spending to renovate Doral and convert the Old Post Office into a hotel.\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A banking expert testified\u00a0Wednesday\u00a0that Donald Trump and his company benefited more than $168 million by obtaining favorable loan terms on transactions where the former president personally guaranteed the loans. The New York Attorney General\u2019s office called Michiel McCarty to testify about his assessment of the $168 million in ill-gotten gains. McCarty analyzed the lending documents […]<\/p>\n","protected":false},"author":1,"featured_media":40085,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[39],"tags":[],"class_list":{"0":"post-40084","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-politics"},"yoast_head":"\nTrump and company saved $168 million\u00a0in loan interest\u00a0as a result of fraud, banking expert testifies | Prosfunds<\/title>\n<meta name=\"description\" content=\"A banking expert testified\u00a0Wednesday\u00a0that Donald Trump and his company benefited more than $168 million by obtaining favorable loan terms on transactions\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/prosfunds.com\/?p=40084\" \/>\n<meta property=\"og:locale\" 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