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[TwiceHorn 31450]

16 minutes ago, BamaATL said:

The last part sort is what I take issue with, I personally think its very justified.  If you allow one group to skirt the law and the spirit of the law, and they get a huge advantage, what's to stop others from doing it?  While it's probably true that a lot of people in development and real estate twist things to their advantage as best they can, likely wondering even into the grey, what the Trump Co has done isn't in the same ball park as wondering into the grey.  This is and always has been brazen.  Given what they have done (and mind you continued to do even under court ordered supervision), why wouldn't they receive the max penalty?  

Again, you're speaking in terms of deterrence of further criminal or unlawful actions.  That's never been a raison d'etre for any kind of civil action, that's solely reserved for criminal cases (and of dubious practical effect).

Sure, the civil system has punitive and deterrent effects at times.  I mean, even here, if Trump does this some more, he's risking getting his ass sued off again.

You're not going to get too far with an appellate court arguing that the most severe remedy is justified here by its deterrent effect.  

Yes, this was blatantly unlawful, but it only worked for him because his banks were willing and complicit, and seem to have mostly protected themselves with their own due diligence, or just blind luck.

The most hideous frauds cause financial devastation to innocent parties that relied on the fraud.  That just isn't here.  If it was here, I'd be less concerned about corporate charter revocations on appeal.

[BamaATL 16593]

7 minutes ago, TwiceHorn said:

Again, you're speaking in terms of deterrence of further criminal or unlawful actions.  That's never been a raison d'etre for any kind of civil action, that's solely reserved for criminal cases (and of dubious practical effect).

Sure, the civil system has punitive and deterrent effects at times.  I mean, even here, if Trump does this some more, he's risking getting his ass sued off again.

You're not going to get too far with an appellate court arguing that the most severe remedy is justified here by its deterrent effect.  

Yes, this was blatantly unlawful, but it only worked for him because his banks were willing and complicit, and seem to have mostly protected themselves with their own due diligence, or just blind luck.

The most hideous frauds cause financial devastation to innocent parties that relied on the fraud.  That just isn't here.  If it was here, I'd be less concerned about corporate charter revocations on appeal.

Do you not consider the taxpayers innocent stakeholders (I get that the tax portion might not entirely apply)?  What about the people that bought mortgage backed securities tied to all this?  While in the end they may have well been made whole, they were in fact defrauded (I also recognize that the lenders would have complicity in this).  It also remains to be seen if he has to start liquidation if suddenly there are lots of people without chairs when the music stops, I bet there will be.  After all, a ponzi scheme works as long as it can be perpetuated.  

[wildcat09 29349]

Another aspect that I'm sure everyone sort of knows but hasn't fully thought about is that a bank isn't just one person or one group of people all united in the same goal. In one sense, it's pretty obviously accurate to say that the Trump's lenders weren't really defrauded, as they didn't actually rely on Trump's bullshit representations. But in another sense, they very much were.

Modern banks are nothing like banks were 100 years ago.  These are massive financial institutions with tens to hundreds of thousands of employees that play multiple pivotal roles in our financial system. Obviously everyone knows that they lend money. When we say that the lenders obviously weren't defrauded, we're thinking of the banks as being synonymous with their bankers.

But a bank is not just its bankers. Modern banks in many respects also serve a quasi-regulatory function. All of our largest banks have compliance staffs that number in the thousands. They don't exist to help the bank make money, they exist to make sure the bank's own employees (which often includes officers and directors) aren't skirting or flagrantly breaking the rules to make more money.  Which is a huge problem because that's something bankers do all the goddamned time, because they're incredibly incentivized to do so. But the bankers' short term gain poses long term risks to the bank itself, and as the rulebreaking accumulates the risk to the entire system increases exponentially. We've seen this happen repeatedly and in response we've imposed a lot of quasi-regulatory functions on banks. And if you think of these banks in that role, they absolutely got defrauded by Trump (and by their own bankers).

If anyone is interested, ALAB podcast has a great episode on all the various shenanigans Deutsche Bank assholes did to skirt applicable rules so that they could get and keep Epstein's business after it was known he was a child trafficking piece of shit. They may be the worst of the worst, but the sort of shit their bankers did was far from unusual in the industry.

[Neonmoon 38129]

1 hour ago, TwiceHorn said:

And, as long as you pay the loans back on time, who is harmed?

The risk in bank fraud is that the bank gives a loan that can't be paid back and will be undercollateralized in that event.

There's also a smaller harm in that perhaps they give a better interest rate, and so lose out on the differential.  That would be damn near impossible to quantify.

The fact is, I don't really believe these lending institutions and insurers were defrauded and if James had had to prove reliance on the financial statements, she would not have been able to win.  She actually had to make the point that reliance and intention/scienter were not elements of her proof on several occasions.

As to the property tax authorities, they've been free to try to use these statements to raise his tax burden at any time.  That's not really convincing.

No. The risk in bank fraud is not the banks taking losses. Banks takes losses all the time. In fact, there a few trying to sell Elons Twitter bullshit for pennies on the dollar right now. No big deal. The risk in bank fraud is breaking the law and going to prison, or in this civil case, losing your business license. Because we as a society can’t function if some people are allowed to cheat and others aren’t. 

28 minutes ago, Brisketexan said:

I think that sending a simple message that there aren’t two sets of laws: one that lets the rich get away with lying about hundreds upon hundreds of millions of dollars, and another that will imprison a poor person for lying about $50 of monthly income, is really, really, really important for society.
The constant refrain of “the lies are so big, and the money involved so vast, that it all came out in the wash, so no harm no foul” is disgusting and more importantly, completely degrading to a society where all men are equal under the law.
If a poor person lied like that to get access to Section 8 housing (hey, they paid the rent, so it’s all good!), they’d be in fucking prison.
Trump does it, and “that’s just how business is done.”
It’s also how you end up with poor people storming rich neighborhoods and burning down houses.
We have laws or we don’t. I prefer the first option.

Este. 

It’s just preposterous to think no one was harmed because he paid back the loans. 

[Pato del Muerto 52489]

Hasn’t he also paid his loans with new loans, also collateralized with dubious and false values?  Is that not his game?

[troph 24783]

1 hour ago, DigglerontheHoof said:

So basically, businessmen should strive to be like trump, b/c, there aren't any consequences in American law to punish you for fraud.  If I tried to overvalue my property exponentially on a loan application, I wonder how it would work out for me. 

I get that you're just explaining the law to us.  But, fuck, the more I learn about the law the more I'm not sure what the fuck we're actually trying to protect ourselves from trump for.  We're already a broken system.  Why not cut out the middleman and just have a dictator instead of an oligarchy? 

Straw man, there’s civil liability and potentially rot in jail criminal liability.  Barred from doing business even as a sole proprietorship or owning real estate quite honestly may be unconstitutional. There are due process cases for extreme takings I think, I could be wrong. Definitely not a road we really want to go down, and I think the guy should be locked up for 20+ years.

[Bozo_Casanova 26444]

5 minutes ago, troph said:

Barred from doing business even as a sole proprietorship or owning real estate quite honestly may be unconstitutional.

This is a strawman. 

[TwiceHorn 31450]

1 minute ago, troph said:

Straw man, there’s civil liability and potentially rot in jail criminal liability.  Barred from doing business even as a sole proprietorship or owning real estate quite honestly may be unconstitutional. There are due process cases for extreme takings I think, I could be wrong. Definitely not a road we really want to go down, and I think the guy should be locked up for 20+ years.

Yeah and also the "two sets of laws" is really done and dusted.

We'd all be prosecuted for bank fraud if we did what Trump did, most likely.  These loans were all done during the Obama Administration when the beloved Preet Bharara was US Attorney with jurisdiction.

They completely failed to prosecute him.  And a lot of others like him.  And limitations is long passed.

As much as we hate Trump, I don't think it's a particularly good idea to try to fix that gross omission with other, non-criminal statutes.

He violated 63(12).  Good, that's been proven.  I'm just concerned that this corporate charter remedy is not going to stand up on appeal. It may, great.  Fuck Trump.

But I think there may be otherwise valid reasons that it doesn't hold up.

[tx 3 putt 76905]

7 minutes ago, troph said:

Straw man, there’s civil liability and potentially rot in jail criminal liability.  Barred from doing business even as a sole proprietorship or owning real estate quite honestly may be unconstitutional. There are due process cases for extreme takings I think, I could be wrong. Definitely not a road we really want to go down, and I think the guy should be locked up for 20+ years.

The entire trump family already banned from taking part in any type of charity in NY 

[TwiceHorn 31450]

8 minutes ago, troph said:

Straw man, there’s civil liability and potentially rot in jail criminal liability.  Barred from doing business even as a sole proprietorship or owning real estate quite honestly may be unconstitutional. There are due process cases for extreme takings I think, I could be wrong. Definitely not a road we really want to go down, and I think the guy should be locked up for 20+ years.

I'm not so concerned with the existence of the remedy.  I certainly have no sympathy for Trump.

I just have pretty good intuitions in a lot of cases for what will hold up on appeal and what won't and often what judges will decide.  I'm certainly not infallible and am surprised with some frequency.

I'd feel better about this remedy on appeal if there was some tangible financial damage.

[TwiceHorn 31450]

2 minutes ago, longhornmatt said:

It is.  The defense that the banks were paid back and nobody was harmed, dubious as it may be, is probably only a on borrowed time, anyway.  Nobody is realizing a loss in a Ponzi scheme until you run out of Peters to rob so you can pay the Pauls. 

Well, in this particular case, most of these loans were made around 2011 and in any case before 2014  They have not been refinanced since.

Because if they had, there would not be a statute of limitations argument.

All of these loans were subject to covenants under which annually he would re-submit financial statements and certify no material change in financial condition, under penalty of raising rates, changing terms, and possibly foreclosure.

Trump argues that the fraud, if any, occurred when the loans closed, which is all outside limitations.  James argues that each submission was a separate fraudulent act, and many of them are within limitations.

[TwiceHorn 31450]

4 minutes ago, longhornmatt said:

Look, I don’t need to know facts to have an opinion.  I’m sorry, I thought this was America!

I wasn't picking at you, just had looked at the limitations issue and am pretty familiar with the pled/summary judgment facts.

But it is worth noting that the banks have all been paid, TO DATE.  They haven't been paid off completely.

[Rimbo 25919]

2 hours ago, longhornmatt said:

As a policy question, why wouldn’t you give the corporate death penalty to the guy who gets away with it and enriches himself just as easily as the guy who defaults and costs the bank money?  The guy who got lucky is the one who can keep doing it.  The one that had it all blow up isn’t getting those opportunities again (ugh, unless they’re Donald Trump, I know).

Don't really want to get too involved, because I think you've covered it pretty well -- this circumstance is exactly why NY law was written to be the way it is:

1. Because there is real harm to the people of New York, if not the actors involved,
2. And as a way to nip fraud in the bud.

Remember that New York is, among other things, home to the NYSE -- the New York Stock Exchange, Nasdaq... the largest international securities exchanges in the world. And what makes those things run is trust. This isn't the first time banks and bad businessmen have gotten in cahoots to make each other rich, at the expense of -- at the worst -- trust in the foundations of capitalism itself.

In short...

• This law exists exactly because there are victims to the crime Trump committed, and
• Trump is exactly the sort of extreme example that deserves the punishment he's getting.

@TwiceHorn, man, I stick up for you lots because your opinions are really valuable, but I really think you're missing the big picture here; you're thinking about this as a defense attorney would, and not looking at why the law was made, ALL the folks who are impacted by what he did, the severity and thoroughness of his crimes, and above all else, his and his attorneys' unforgivably bad handling of the case. (They didn't even try to put up a legitimate defense, and did things (seemingly on purpose) to annoy the judge as much as possible.)

[TexasEd 8066]

The risk of default of several billions in loans to the point that a bank fails and has to be propped up by the FDIC and potential contagion that takes down other banks and impacts the people who were not committing fraud is the damage. Those banks reported collateral on their balance sheets that was wrong to the point where they were likely in violation of federal law. 

[BamaATL 16593]

So based on all this I did a bit of internet sleuthing to see if I could find any cases in which the "corporate death penalty" was given in New York.  I'm confused as to whether or not either of these cases apply to the Martin Act.  

From 1994 People v Oliver Schools - judgment affirmed for dissolution

https://casetext.com/case/people-v-oliver-154

These folks had a scheme not to refund money despite people withdrawing from their schools:

 "Its infliction must rest upon grave cause, and be warranted by material misconduct" (People v. North Riv. Sugar Ref. Co., supra, at 608). "[T]he State as prosecutor must show on the part of the corporation accused some sin against the law of its being which has produced, or tends to produce, injury to the public. The transgression must not be merely formal or incidental, but material and serious; and such as to harm or menace the public welfare" (People v. North Riv. Sugar Ref. Co., supra, at 608-609; see also, People ex rel. Attorney General v Utica Ins. Co., 15 Johns 358, 389).

So if I understand this correctly:

1.  Grave cause warranted by material misconduct - In this case for example lying about the square footage would equal that

2.  Sin against the law - fraud (Martin Act?, lifted from wikipedia, not great I know)

The Martin Act has been interpreted to prohibit all deceitful practices, as well as false promises, related to the offer, sale, or purchase of securities and commodities within or from New York.^[2] Notably, to secure a conviction, the state is not required to prove scienter (except in connection with felonies) or an actual purchase or sale or damages resulting from the fraud.^[2]

So is real estate considered a security given it's backing via loan, and then meet that standard?

3.  Material and Serious - inflating numbers to get more money seems material and serious to me, and doing it repeatedly

4.  Harm or menace to public welfare - This seems like it's the point Twice keeps coming back to.  In a sense, if no one actually lost money, even if the scheme didn't go bust, does this meet the standard?  In the above case, it was obvious who was harmed.  In the Trump Co case everyone else seems to fall into the category of, "well, you could have been hurt, and were probably lucky you didn't get hurt."  (at least not yet) save taxpayers on the potential tax fraud side (I'm not clear if this can even be part of the case).  

Anyway, I was looking for a case that set some sort of precedent to look at.  Truth be told, in about 30 minutes or so there was this and the North River Sugar Refinery Company referred to in it (which is from 1890, but apparently a bellwether case in this area in New York).  I'm not sure how well I did, and my understanding is pretty rudimentary.  I did find it interesting.  

[Bozo_Casanova 26444]

28 minutes ago, BamaATL said:

This seems like it's the point Twice keeps coming back to.  In a sense, if no one actually lost money, even if the scheme didn't go bust, does this meet the standard? 

Yes, for all the reasons that have been discussed but again, I’m not sure why this is hard to grasp: people did lose money. The credit and insurance products were mispriced. 

[Burt 4080]

More lawyer talk, PLEASE!!!

[Captainant 27654]

9 hours ago, TwiceHorn said:

Yeah and also the "two sets of laws" is really done and dusted.

We'd all be prosecuted for bank fraud if we did what Trump did, most likely.  These loans were all done during the Obama Administration when the beloved Preet Bharara was US Attorney with jurisdiction.

They completely failed to prosecute him.  And a lot of others like him.  And limitations is long passed.

As much as we hate Trump, I don't think it's a particularly good idea to try to fix that gross omission with other, non-criminal statutes.

He violated 63(12).  Good, that's been proven.  I'm just concerned that this corporate charter remedy is not going to stand up on appeal. It may, great.  Fuck Trump.

But I think there may be otherwise valid reasons that it doesn't hold up.

Jesus Christ dude it's like you would be arguing against Capone going to prison for tax fraud because the punishment wouldn't match the specific crime he was charged with. 

Sometimes with uniquely large and terrible criminals, you have to throw the book and the footnotes at him. Miss me the slippery slope counterargument, trump is a historically unique criminal. 

[TwiceHorn 31450]

8 hours ago, Rimbo said:

Don't really want to get too involved, because I think you've covered it pretty well -- this circumstance is exactly why NY law was written to be the way it is:

1. Because there is real harm to the people of New York, if not the actors involved,
2. And as a way to nip fraud in the bud.

Remember that New York is, among other things, home to the NYSE -- the New York Stock Exchange, Nasdaq... the largest international securities exchanges in the world. And what makes those things run is trust. This isn't the first time banks and bad businessmen have gotten in cahoots to make each other rich, at the expense of -- at the worst -- trust in the foundations of capitalism itself.

In short...

• This law exists exactly because there are victims to the crime Trump committed, and
• Trump is exactly the sort of extreme example that deserves the punishment he's getting.

@TwiceHorn, man, I stick up for you lots because your opinions are really valuable, but I really think you're missing the big picture here; you're thinking about this as a defense attorney would, and not looking at why the law was made, ALL the folks who are impacted by what he did, the severity and thoroughness of his crimes, and above all else, his and his attorneys' unforgivably bad handling of the case. (They didn't even try to put up a legitimate defense, and did things (seemingly on purpose) to annoy the judge as much as possible.)

Look, I didn't say it should or should not necessarily happen.  I think it's kind of hilarious really.

But I know how these things tend to work and I would not at all be surprised if the court of appeals reversed the revocation remedy for exactly the reason I state.

Mispricing of loans and insurance happen every time a fraud is perpetrated in such a transaction.  That's the nature of fraud and why 63(12) provides a governmentally administered civil remedy, in addition to criminal penalties and private civil suits.  I'm not sure the harshest remedy is going to be considered appropriate if there isn't any other pecuniary loss.

This is a possibility, not an inevitability.  So pepper your angus accordingly.

[TwiceHorn 31450]

8 minutes ago, Captainant said:

Jesus Christ dude it's like you would be arguing against Capone going to prison for tax fraud because the punishment wouldn't match the specific crime he was charged with. 

Sometimes with uniquely large and terrible criminals, you have to throw the book and the footnotes at him. Miss me the slippery slope counterargument, trump is a historically unique criminal. 

Right and Capone was sentenced to 11 years, a "tax evasion" penalty, as opposed to the death penalty, life sentence, 30 years in prison penalties he would have been subject to had he ever been successfully prosecuted for the murders he ordered and other more traditional mob crimes.

Again, I'm not saying this SHOULD happen, but it might, so take it into account before getting too fired up over it.

[Bozo_Casanova 26444]

29 minutes ago, TwiceHorn said:

I'm not sure the harshest remedy is going to be considered appropriate if there isn't any other pecuniary loss.

Any other loss? My brother in Christ, mispricing as a result of repeated, systematic fraud is the greater problem and the larger loss.

Edited October 10, 2023 by Bozo_Casanova

[Beau Vine 54211]

1 hour ago, Bozo_Casanova said:

Any other loss? My brother in Christ, mispricing as a result of repeated, systematic fraud is the greater problem and the larger loss.

He's just being obtuse.  He earlier said that it would be an "impossibility" to determine the damages that were incurred by offering a lower interest rate because of the fraud, as if banks don't offer differential interest rates depending on what the LTV ratio of a loan is.  

[Horndog 2228]

Maybe I have an over-simplistic worldview, but it seems to me that the public risk created by  illegal business practices  -- not just the provable harm actually caused  --  is a strong factor in determining the appropriate remedy.  Business laws and regulations exist for the purpose of protecting consumers from unethical practices and to minimize potential damage to the public generally (i.e. adverse economic impacts).  We have all seen what can happen, for instance, when there is not proper oversight and enforcement of regulations in the banking industry.  Persistent, repeated failure to stay within the boundaries should result in severe sanctions.

If a lawyer misuses client trust funds, the lawyer is subject to discipline, regardless of whether the funds were later replaced.  If the lawyer does it repeatedly, disbarment is appropriate.  The privilege of having a law license has been forfeited. Even though no actual harm may have occurred, the lawyer's actions, if unchecked, have created a substantial risk of harm to the client, and to the public in general if others follow suit.  

[Rimbo 25919]

1 hour ago, Horndog said:

Maybe I have an over-simplistic worldview, but it seems to me that the public risk created by  illegal business practices  -- not just the provable harm actually caused  --  is a strong factor in determining the appropriate remedy.  Business laws and regulations exist for the purpose of protecting consumers from unethical practices and to minimize potential damage to the public generally (i.e. adverse economic impacts).  We have all seen what can happen, for instance, when there is not proper oversight and enforcement of regulations in the banking industry.  Persistent, repeated failure to stay within the boundaries should result in severe sanctions.

If a lawyer misuses client trust funds, the lawyer is subject to discipline, regardless of whether the funds were later replaced.  If the lawyer does it repeatedly, disbarment is appropriate.  The privilege of having a law license has been forfeited. Even though no actual harm may have occurred, the lawyer's actions, if unchecked, have created a substantial risk of harm to the client, and to the public in general if others follow suit.  

This is correct.  There's both calculable financial damages AND incalculable, but significant, damages to the system itself through this loss of trust. Lose enough trust, because you allowed bad actors to run rampant and unchecked, and Really Bad Things Happen.

I think New York, as the financial center of the country, is particularly sensitive to this, so the laws are a bit tougher and the punishments more severe.

[Fudge Nuggets 19190]

13 hours ago, Rimbo said:

And as a way to nip fraud in the bud.

I laughed.  He's been doing this bullshit for what... forty years now?  That's a hell of a bud.

[Rimbo 25919]

1 minute ago, Fudge Nuggets said:

I laughed.  He's been doing this bullshit for what... forty years now?  That's a hell of a bud.

and that's why you bring out the dinner plate sized nips

[TwiceHorn 31450]

3 hours ago, Beau Vine said:

He's just being obtuse.  He earlier said that it would be an "impossibility" to determine the damages that were incurred by offering a lower interest rate because of the fraud, as if banks don't offer differential interest rates depending on what the LTV ratio of a loan is.  

I didn't say impossible. 

What you fail to understand is that thus far, James has not had to prove either a) that any institution relied on the false financial statements or b) what the accurate or most accurate valuation of each property would/should have been.  

She's just had to prove that they were overstated and the reason for doing so unsound and unconvincing.

In the abstract, sure that's easy to quantify, but in this particular case, not so much.

To do it here, James would have to prove that institutions relied on the statements and gave terms of X, and, if proper valuations has been used, they would have been Y.  Easy peasy.  Except James hasn't had to prove, and Engoron didn't have to find, "proper valuations," just that these were unjustiabily overinflated. Nor has she had to prove that the false valuations had any causal connection to the granting of the loans or the terms thereof (reliance).

[Bozo_Casanova 26444]

2 hours ago, Horndog said:

If a lawyer misuses client trust funds, the lawyer is subject to discipline

[TexasEd 8066]

2 hours ago, Horndog said:

Maybe I have an over-simplistic worldview, but it seems to me that the public risk created by  illegal business practices  -- not just the provable harm actually caused  --  is a strong factor in determining the appropriate remedy.  Business laws and regulations exist for the purpose of protecting consumers from unethical practices and to minimize potential damage to the public generally (i.e. adverse economic impacts).  We have all seen what can happen, for instance, when there is not proper oversight and enforcement of regulations in the banking industry.  Persistent, repeated failure to stay within the boundaries should result in severe sanctions.

If a lawyer misuses client trust funds, the lawyer is subject to discipline, regardless of whether the funds were later replaced.  If the lawyer does it repeatedly, disbarment is appropriate.  The privilege of having a law license has been forfeited. Even though no actual harm may have occurred, the lawyer's actions, if unchecked, have created a substantial risk of harm to the client, and to the public in general if others follow suit.  

Exactly. Did Bernie Madoff create any damages before his pyramid collapsed?  Yes, they just had not been realized yet. Same here, Trump created a house of cards and the fact that he got it mostly back down before it collapsed is irrelevant. 

[Beau Vine 54211]

46 minutes ago, TwiceHorn said:

I didn't say impossible. 

What you fail to understand is that thus far, James has not had to prove either a) that any institution relied on the false financial statements or b) what the accurate or most accurate valuation of each property would/should have been.  

She's just had to prove that they were overstated and the reason for doing so unsound and unconvincing.

In the abstract, sure that's easy to quantify, but in this particular case, not so much.

To do it here, James would have to prove that institutions relied on the statements and gave terms of X, and, if proper valuations has been used, they would have been Y.  Easy peasy.  Except James hasn't had to prove, and Engoron didn't have to find, "proper valuations," just that these were unjustiabily overinflated. Nor has she had to prove that the false valuations had any causal connection to the granting of the loans or the terms thereof (reliance).

You're normally a hell of a good poster, but this is complete horseshit.  First, I don't fail to understand any of that, and it's remarkable of you to pronounce that I do.  Second, it's would be ridiculously easy to quantify -- hire a dude like me as an expert witness; you give me access to all the bank data and it would take me 10 minutes to quantify how much the value of the bank was reduced by each loan they gave Trump.  Literally 90% of the consulting that fineco professors do is exactly this.  

There's also an entire industry dedicated to determining "proper valuations" in real estate, so that doesn't seem like much of a hurdle, either.  

And the false valuations do not have to have any causal connection to the granting of a loan, only the terms, and I've never heard of a bank that didn't have a underwriting model that could take inputs such as LTV and DCR and spit out an acceptable interest rate for a loan based on those numbers.  So if he overstated the asset value, it lowers the LTV, which lowers the acceptable r for the bank, meaning that they give out a loan at a lower rate relative to the risk, which reduces the NPV of that loan, which reduces the value of the bank.  This literally could not be easier.  

 

 

[TwiceHorn 31450]

23 minutes ago, Beau Vine said:

You're normally a hell of a good poster, but this is complete horseshit.  First, I don't fail to understand any of that, and it's remarkable of you to pronounce that I do.  Second, it's would be ridiculously easy to quantify -- hire a dude like me as an expert witness; you give me access to all the bank data and it would take me 10 minutes to quantify how much the value of the bank was reduced by each loan they gave Trump.  Literally 90% of the consulting that fineco professors do is exactly this.  

There's also an entire industry dedicated to determining "proper valuations" in real estate, so that doesn't seem like much of a hurdle, either.  

And the false valuations do not have to have any causal connection to the granting of a loan, only the terms, and I've never heard of a bank that didn't have a underwriting model that could take inputs such as LTV and DCR and spit out an acceptable interest rate for a loan based on those numbers.  So if he overstated the asset value, it lowers the LTV, which lowers the acceptable r for the bank, meaning that they give out a loan at a lower rate relative to the risk, which reduces the NPV of that loan, which reduces the value of the bank.  This literally could not be easier.  

 

 

My point was made only in reference to the current state of proof.**   I didn't say James couldn't prove a correct or more correct valuation, rather she has not done so and had no need to do so.

Had there been a battle of the experts as to the correct valuations of Trump's properties, there would have been no summary judgment. most likely, and Engoron's job would be much harder, assuming Trump used competent experts.

I concede that in the abstract. proving different LTV ratios and corresponding loan terms isn't that difficult, but it hasn't been done here.

Also, you would have to prove that Trump's valuations, and not some due diligence valuation or other factors affected the original LTV ratio and corresponding terms.  And that is an item of proof currently missing in this case.

This is pretty unique in that the proof, to date, is that the SFC were false and used in a business transaction and that's pretty much it.

**I have spent a decent amount of time examining the summary judgment papers and ruling and realize probably no one else has.  I have tried to explain how this case differs from the usual type of fraud case, or even a valuation dispute, in various different contexts.  So I often fail to account for the fact that not everyone has and therefore doesn't get where I'm coming from.  Like, Engoron did not decide the value of Mar-A-Lago.  He used the $18M tax valuation as the lowest on record and a rational, if not accurate, valuation.  On the other end, Trump valued it on either side of $500M.  So the delta was 23x and the proffered reasons for the increased valuation unconvincing.  So, he never picked a value, just concluded that ~$500M was false.  Similarly, James never tried to prove the value of MAL or any of the other assets in question, just that what Trump used was an unjustified departure from any rational valuation and thus false.

Edited October 10, 2023 by TwiceHorn

[Brisketexan 105095]

4 hours ago, Horndog said:

If a lawyer misuses client trust funds, the lawyer is subject to discipline, regardless of whether the funds were later replaced.  If the lawyer does it repeatedly, disbarment is appropriate.  The privilege of having a law license has been forfeited. Even though no actual harm may have occurred, the lawyer's actions, if unchecked, have created a substantial risk of harm to the client, and to the public in general if others follow suit.  

FANTASTIC example/analogy.  And as for Bozo's comment/doubt, actually, this is one of the things that absolutely gets lawyers popped.  It's an absolute no-no, and is also easy to prove.

2 hours ago, Rimbo said:

This is correct.  There's both calculable financial damages AND incalculable, but significant, damages to the system itself through this loss of trust. Lose enough trust, because you allowed bad actors to run rampant and unchecked, and Really Bad Things Happen.

I think New York, as the financial center of the country, is particularly sensitive to this, so the laws are a bit tougher and the punishments more severe.

The bolded.  Very important.  The destruction of trust - in a system that is built SOLELY on an agreed set of rules and the agreement that 1) people will follow them, and 2) if they don't, they'll face enforcement - IS THE ENTIRE SYSTEM.

Even the most basic economic function (barter) is based on trust.  I hand you the basket of fruit, I TRUST that you will hand me the bushel of wheat.  Without trust, we have no system of anything.  So, what was harmed here?  Just the bedrock of our economy and society.

[jimmyjazz 45899]

I don't understand why this argument continues to play out.  If one overinflates the value of one's property and obtains loans on that excess collateral, then they are likely to obtain a lower interest rate than would normally be justified.  This defrauds the lender.

As I said weeks ago, I am skeptical that lenders were wholly bamboozled by the great Donald J. Trump, it kinda smells like financial chicanery, but regardless, there was real $$$ damage done.  The fact that this may not have come up yet in this particular proceeding means jack shit.

[TwiceHorn 31450]

Switching topics, the Government in the DC case filed a motion to compel Trump to invoke the advice-of-counsel defense.

https://www.courtlistener.com/docket/67656604/98/united-states-v-trump/

Lol.  The reason this is significant is if a defendant relies on advice of counsel, he has to waive privilege as to all communications with that counsel relating to the alleged defense.  This would mean Eastman, Giuliani, Powell, Chesebrough, etc.

Pretty sure this is unorthodox, but Trumpco has been mumbling about it for weeks/months and now the government is forcing their hand.  Fantastic.

Also, while perusing the docket, Chutkan has denied leave to file a bunch of crazy ass submissions from third parties.  The kooks are coming out of the woodwork.

[The Dog 44020]

 

[Js1 85311]

You mean Ronna ROMNEY McDaniel

[Macanudo 12976]

I'm going to ask again....   If Trump inflated the value of properties for loan purposes/collateral, how is this not some sort of tax fraud since NY State and NYC would have lost out on property/other taxes because tax valuations were assessed at much, much lower values?

[The Dog 44020]

35 minutes ago, Macanudo said:

I'm going to ask again....   If Trump inflated the value of properties for loan purposes/collateral, how is this not some sort of tax fraud since NY State and NYC would have lost out on property/other taxes because tax valuations were assessed at much, much lower values?

It is and James has (or will) do a criminal referral on it.

[YGIFS 19450]

I think the other shoe that's gonna drop are the adjacent properties to his properties where he pulled this shit.  They've been overpaying as a result of their neighbor "comps."  I am publicly happy for my neighbor's who get a pool or above-garage addition.  Privately, I write up the fuck outta that when it's tax protest time.  Usually only makes a small difference when I say, "But I don't have a pool.  They do, but I protest my valuation increase."  How how do you sit back and take that in Palm Beach, "Yes, it's a famous property now and they've done some work to it.  But to claim it's worth over a billion dollars on a public listing?  Any idea what the fuck that does to my valuation rates even though we plan to stay for decades more?"  

[TwiceHorn 31450]

57 minutes ago, Macanudo said:

I'm going to ask again....   If Trump inflated the value of properties for loan purposes/collateral, how is this not some sort of tax fraud since NY State and NYC would have lost out on property/other taxes because tax valuations were assessed at much, much lower values?

Well, take Texas for example.  The county appraisal districts have their own apparatus and methodology for assessing the values of properties.  They never rely on anything from the property owner, except in the relatively rare circumstance that they accept your evidence in a tax protest (for a lower valuation).

And, we all know that tax district appraisals are 10-20%, lately 30-40% or more, lower than the market value of many/most properties.  If you list your house for more than its tax appraisal, do you have some duty to report that?  No.  If you have an appraisal done for a refinance or some other purpose, do you have a duty to report that?  No.

The only time the tax district routinely uses/accepts information from the property owner to adjust its appraisal is when the property sells.  And even then, they don't rely on the owners to submit that information.

I assume that most property taxing jurisdictions work in a similar way.  Granted, this is larger inflation than is common in residential real estate, but the same basic principle applies:  you don't have to self-report valuations to the tax district.

That is different from the IRS, though, where they are dependent in most cases on the taxpayer providing a value for the property for various taxation purposes.

And, of course, with all this publicity, the tax authorities are free and may be tempted to raise the appraised value of Trump's properties based on his own representations.  The problem of  course is that Trump's valuations are so disconnected from reality as to be useless evidence in any court of law.

[brown water 3777]

I am so reluctant to wade in here but… 

One can argue the rationale and veracity of laws in a given venue ad nauseum. At the end of the day those laws existed and someone chose to incorporate or operate subject to them. I’m a CFO of a modest sized company. When we make decisions about organization structure and corporate jurisdiction, we consult counsel who advises us on the benefits and risks of that decision. Frankly, nearly any modestly sophisticated company does the same. 
 

So I don’t really care about the equity of consequences relative to transgressions for the misdeeds of TrumpCo in NY. They chose to be subject to those laws. They leveraged the status of NYC to promote their stature. Now they have to deal with the (preexisting) statutory consequences of running afoul of those laws. 
 

It’s not complicated…

[The Dog 44020]

 

[YGIFS 19450]

If Dan Alexander's byline tomorrow morning hasn't changed to '-Third Rate Psycho Writer', he should be fired.  

[jimmyjazz 45899]

Again . . . gag order?

[Doc Sam Beckett 5792]

Well now, hold on. I didn't realize Letitia "Peekaboo" James is a racist. This changes everything 

[TwiceHorn 31450]

36 minutes ago, jimmyjazz said:

Again . . . gag order?

The gag order in this case forbid only attacks on the judge's staff.

[tbone_ 14115]

 

Yea that’s real leadership material right there.

[Francisco 2.0 32389]

https://abcnews.go.com/US/live-updates/trump-fraud-trial/?id=103642561

 

Quote

When Donald Trump negotiated a $125 million loan from Deutsche Bank related to his Trump National Doral golf club, the former president agreed to maintain a minimum net worth of $2.5 billion as a condition of the loan, former bank executive Nicholas Haigh testified.

The loan memorandum prepared by Deutsche Bank included a covenant that the "Guarantor shall maintain a minimum net worth of $2.5 billion excluding any value related to the Guarantor's brand value," according to a document marked as evidence today.

 

 

Quote

The New York attorney general alleges that Trump's actual net worth at the time of the loan agreement was only $1.5 billion, an amount that would have triggered a default.

Retired Deutsche Bank executive Nicholas Haigh testified that he was involved in the decision to set the $2.5 billion figure, which he believed would protect the bank from exposure if the property failed or the broader market declined.

"It was set in order to make sure the bank was fully protected under adverse market conditions," Haigh testified.

 

Quote

To calculate Trump's net worth, Deutsche Bank looked at what Haigh described as Trump's four "trophy properties," all in Manhattan: Trump Tower, 40 Wall Street, Trump Park Avenue, and Niketown -- a ground lease for a property adjoining Trump Tower.

Since the properties themselves were not provided as collateral for the loan, Deutsche Bank did not commission independent appraisals for the properties, and instead used a modified version of Trump's own numbers.

"The bank normally only commissions appraisals on assets taken as collateral," Haigh said.

Deutsche Bank adjusted their assessment in 2012, when they learned of a separate appraisal of Trump Tower that offered a lower value of the property than what Trump had provided.

"The bank felt that it had an independent view on the value of the asset," Haigh said of the appraisal that prompted his bank to lower their value for Trump Tower from $1.2 billion to $992 million.

 

Edited October 11, 2023 by Francisco 2.0

[tbone_ 14115]

Stupid fucking banks that loan him money deserve what they get. Dumb asses.

That said, fuck this lying fraud in his goat ass.

[TeeDubya 3362]

1 hour ago, tbone_ said:

Stupid fucking banks that loan him money deserve what they get. Dumb asses.

That said, fuck this lying fraud in his goat ass.

"goat ass"

Jesus, what kind of monster goat ogre would be that big?