In early 2014, Donald J. Trump approached his personal bankers at Deutsche Bank to sound them out about potentially lending him money to buy the Buffalo Bills. He provided the bankers with a collection of bare-bones personal financial statements.
The documents were provided so that Deutsche Bank — the only major bank that had consistently been willing to do business with Mr. Trump over the previous two decades — could make a preliminary decision about whether to make the loan.
Mr. Trump has said he offered to pay $1 billion for the Bills, and the team was sold to a rival bidder for a little more than that, meaning that Deutsche Bank was never formally called on to make the loan. Now the financial documents Mr. Trump provided to the bank are under scrutiny by members of Congress.
Michael Cohen, Mr. Trump’s former personal lawyer, told a congressional committee on Wednesday that the documents listed Mr. Trump’s assets at values that had been “inflated” with Mr. Trump’s knowledge.
Deutsche Bank officials viewed some of the values Mr. Trump assigned to specific assets as based on wildly optimistic assumptions, according to a person familiar with the bank’s deliberations. As they assessed Mr. Trump’s finances, the officials would generally reduce his estimates of his assets’ values by up to 70 percent, the person said.
[Michael Cohen accused Mr. Trump of an expansive pattern of lies and criminal dealings.]
Deutsche Bank declined to comment. The White House referred questions to the Trump Organization, which did not respond to requests for comment.
As part of his testimony on Wednesday, Mr. Cohen provided financial documents that described Mr. Trump’s personal assets and liabilities in 2011, 2012 and 2013. The documents covering 2011 and 2012 were previously presented to Deutsche Bank; it was not clear whether the 2013 documents were as well.
In the documents, Mr. Trump reported a net worth of up to about $8.7 billion, with much of it coming from the value of his brand and his portfolio of residential properties, office buildings and golf resorts in the United States and overseas.
Mr. Cohen told members of the House Oversight Committee that he was there when the documents were presented to Deutsche Bank. “I believe these numbers are inflated,” he told the committee. He did not elaborate on which assets he was referring to or to what degree their values were exaggerated.
But the documents provide a glimpse of values Mr. Trump assigned to some of his properties that are out of line with other available estimates.
[The testimony could create more legal issues for the president.]
On his 2012 balance sheet, Mr. Trump described an estate he owns in Westchester County, N.Y., as being worth $291 million. He bought the property, Seven Springs, in 1996 for $7.5 million. In 2018, Mr. Trump said in a federal ethics filing that the property was worth no more than $50 million.
Also in 2012 — just as the economy was beginning to recover from the financial crisis — Mr. Trump valued his skyscraper at 40 Wall Street in Lower Manhattan at $527 million. An article in The Wall Street Journal that year reported that property had a value of about $400 million, based on sales of comparable properties. It would be three more years until the building achieved Mr. Trump’s valuation, according to Trepp, which tracks commercial real estate lending.
The 2012 Journal article also estimated that Mr. Trump’s golf resorts and related real estate in the United States and Scotland were worth nearly $1.6 billion. The Bloomberg Billionaire’s Index as of this week valued those properties at $650 million.
In the 2013 financial statement, Mr. Trump said that $4 billion of his nearly $9 billion net worth was attributable to his “brand value.” He did not report such a hard-to-measure asset in 2011 and 2012.
The financial statements for 2011 and 2012 carry the heading “compilation reports,” which in accounting terms means that the accountants that prepared them merely compiled information from their client without auditing the underlying figures. The 2013 statement does not appear to have been prepared by an accountant, and includes language that is not part of generally accepted accounting principles.
[Mr. Cohen characterized the president as a con man, a cheat and a racist.]
Determining the value of huge pieces of real estate is an exercise in subjectivity. In Mr. Trump’s case, according to bankers who have worked with him, he tended to make assumptions that were more aggressive than others in the real estate business would. For example, they said, he often made unrealistic forecasts about how much revenue he expected a property to generate, a practice that would result in a greatly inflated value for that asset.
Providing false information in order to get a bank loan can constitute bank fraud or conspiracy to commit bank fraud, according to former prosecutors.
Michael Bachner, a lawyer who often represents defendants in financial crime cases, said that prosecutors generally focused on whether information provided to a bank was “materially false” and exaggerated a borrower’s ability to repay a loan. He added that it was uncommon for prosecutors to charge someone with bank fraud in the absence of a loan being made.
Since the late 1990s, Deutsche Bank has been the only major Wall Street bank willing to do business with Mr. Trump, whose companies have defaulted on loans and filed for bankruptcy on multiple occasions. Deutsche Bank, hungry for growth in the lucrative United States market, was willing to look the other way even after Mr. Trump defaulted on one of its loans in 2008 and then sued the bank over accusations that it had helped cause the financial crisis.
After that litigation, the bank’s relationship with Mr. Trump shifted from its vast investment banking and trading division to its small United States private bank, which serves ultra-wealthy people. In 2012, the private bank lent Mr. Trump well over $100 million to pay for the Doral golf resort near Miami.
Two years later, Mr. Trump’s name would surface in bidding for the Bills. The team was put up for sale after its owner died, and Mr. Trump approached Deutsche Bank’s private banking unit about a loan to help him buy it, if he were the winning bidder.
“I bid a billion dollars, all cash on the table,” Mr. Trump told Sports Illustrated in 2015. The team went to a rival bidder, Terry Pegula.
While Deutsche Bank never lent Mr. Trump money for the Bills bid, the bank continued to extend him credit for other purposes.
Later that year, Mr. Trump sought another loan from Deutsche Bank to finance his transformation of the Old Post Office Building in Washington into a luxury hotel. The bank lent him $170 million.