How to steal millions

The NY Times has another KABLOOEY about Trump’s tax returns and what they reveal.

He opened a new Trump Sewer in Chicago in September 2008, just as all the wheels were falling off. The new Sewer did not flourish.

…the skyscraper became another disappointment in a portfolio filled with them. Construction lagged. Condos proved hard to sell. Retail space sat vacant.

Yet for Mr. Trump and his company, the Chicago experience also turned out to be something else: the latest example of his ability to strong-arm major financial institutions and exploit the tax code to cushion the blow of his repeated business failures.

The president’s federal income tax records, obtained by The New York Times, show for the first time that, since 2010, his lenders have forgiven about $287 million in debt that he failed to repay. The vast majority was related to the Chicago project.

It’s fascinating, isn’t it? When poor people fall into debt they can’t repay, it can cripple their lives for years to come. When rich crooks do, they can rich crook their way into doing it again and again without a scratch.

When the project encountered problems, he tried to walk away from his huge debts. For most individuals or businesses, that would have been a recipe for ruin. But tax-return data, other records and interviews show that rather than warring with a notoriously litigious and headline-seeking client, lenders cut Mr. Trump slack — exactly what he seemed to have been counting on.

In other words he stole millions by being an evil bullying asshole.

Big banks and hedge funds gave him years of extra time to repay his debts. Even after Mr. Trump sued his largest lender, accusing it of preying on him, the bank agreed to lend him another $99 million — more than twice as much as was previously known — so that he could pay back what he still owed the bank on the defaulted Chicago loan, records show.

Ultimately, Mr. Trump’s lenders forgave much of what he owed.

Meanwhile Susan Smith who took on debt to attend a for-profit “university” – perhaps Trump “University” itself – is living in her car because the interest payments are more than she can earn.

He borrowed millions for the project, construction was slow, and then the economy started to go bad.

With the financial crisis enveloping the world, finding buyers for multimillion-dollar apartments suddenly became much harder. In the spring of 2008, Mr. Trump asked Deutsche Bank to delay the loan’s due date. The bank gave him an extra six months.

Six months later the economy was falling off a cliff. Trump and his junior crooks threw a party at the new Sewer to celebrate…something.

At that point, at least 159 units in the building were still unsold, and many more were under contract but hadn’t closed, according to New York court records. That meant hundreds of millions of dollars that Mr. Trump and his family had counted on to repay Deutsche Bank and Fortress hadn’t yet materialized. And the loans were due in barely six weeks.Mr. Trump sought another extension.

This time, Deutsche Bank said no.

Mr. Trump’s company still owed Deutsche Bank about $334 million in principal and interest, and Fortress $130 million, not including interest and fees.

Mr. Trump went on the offensive. In a letter to Deutsche Bank on Nov. 4, he accused it of helping ignite the financial crisis. This was important, because Mr. Trump went on to claim that the crisis constituted a “force majeure” — an act of God, like a natural disaster — that entitled him to extra time to repay the loans.

A few days later, Mr. Trump and his companies sued Deutsche Bank and Fortress, along with the other banks and hedge funds that had purchased pieces of the loans.

The suit accused Deutsche Bank of engaging in “predatory lending practices” against Mr. Trump. He sought $3 billion in damages.

This is Trump. He borrows your money and then he sues you for lending it.

Deutsche Bank sued back, calling him a deadbeat and demanding immediate repayment.

Inside Deutsche Bank, angry executives and lawyers vowed to never again do business with Mr. Trump, according to senior executives.

Why didn’t they just seize the building?

Going to court to take over the unfinished skyscraper promised to be a costly, yearslong process, especially given Mr. Trump’s reputation for using the legal system to drag out fights and grind down opponents. It seemed simpler to resolve the dispute.

Who knew it was that easy? Who knew that all you have to do to steal millions from banks is to be a determinedly evil litigious bully?

They settled. The terms were kept secret.

But Mr. Trump’s federal tax returns, as well as loan documents filed in Cook County, Ill., provide clues to what happened: Mr. Trump was let off the hook for about $270 million. It was the type of generous financial break that few American companies or individuals could ever expect to receive, especially without filing for bankruptcy protection.

But Trump gets to do it because he’s such a crook. The secret to success is to be showily, conspicuously, brazenly evil.

Before Mr. Trump defaulted, Fortress had expected to receive more than $300 million from his company: the $130 million in principal and roughly $185 million in anticipated interest and fees.

But Fortress and its partners — including Mr. Mnuchin’s Dune Capital, as well as Cerberus Capital Management, whose co-chief executive, Stephen A. Feinberg, would become a major Trump fund-raiser and go on to lead a White House advisory panel — quickly realized they wouldn’t ever collect that full amount.

Two of the people Trump cheated out of millions now help him do his Trump thing to the whole country. It’s mind-boggling.

6 Responses to “How to steal millions”