Deutsche Bank loaned Donald Trump’s company hundreds of millions of dollars. The loans are a focus of New York Attorney General Letitia James’ lawsuit contending that Trump and his company deceived lenders and insurers by giving them financial statements that badly overstated his asset values and overall net worth. The defendants deny the allegations.
When a company prepares and provides the financial statements to the CPA firm which does nothing more than to simply present the numbers properly on the financial statements, without verification of any sort, that is called a “compilation.” The CPA firm expresses no opinion on the accuracy and reliability of the numbers.
On the other hand, when an accounting firm is hired to audit the financial statements of the company, numerous procedures are performed to ensure the numbers are “presented fairly,” resulting in the issuance of an “unqualified” or clean opinion, which means others can rely on the financial statements to be materially accurate.
According to testimony, Deutsche Bank always followed its own guidelines that included checking out information that would-be borrowers provide, stating that “it’s not an industry standard for financial statements to be audited. “I think we expect clients-provided information to be accurate.”
Perhaps the bank had different motives. Over the years, Deutsche Bank has been involved in scandals such as laundering Russian money, an interest rate scam, violation of U.S. economic sanctions, sale of toxic securities and mortgage fraud, and paid over $9 billion in fines and settlements based upon such wrongdoings.
Trump contends that even if the financial statements were fraudulent and factually a fraud was perpetrated, the bottom line is that no one got hurt. Every participant profited from the loan transaction. No loss! No case!
Applying Trump’s theory to a similar situation, assume an individual walks into a bank with the intention to rob it and sticks a gun in the teller’s face, demanding that all money be handed over to him. However, before the money passes hands, the alleged robber sees two armed guards walking over to him and he runs out of the bank without taking the money, but he is caught.
The bottom line: Since no one got hurt. why should the attempted robber go to jail?
So many defense lawyers are now scratching their heads.
Alvin Goldberg,
Great Neck
