Background: New York Attorney General Letitia James (D) is suing Trump, alleging the Trump Organization repeatedly overvalued its properties to lenders while reporting different property values to tax officials. A judge has already ruled that Trump committed fraud. The questions that remain in the case are how much the Trump Organization will be fined and what it means for future business.
O’Leary believes this is politically motivated and told Coates that every real estate developer everywhere is guilty of what Trump did. He explained:
So, if you’re a developer and you’ve got a building on a block anywhere in America and it’s worth, let’s say, $500 million and you want to build a building right beside it, you go to the bank and say, “This building is worth $500 million. I’d like to borrow a construction finance loan against this asset, and I want you to tell me it’s worth 500 million, too.” The bank negotiates with you and says, “Well, no, we think it’s worth $400 million,” and you fight it out.
You’re always trying to show your assets in the brightest light with the sunshine you can possibly determine for them. You want them to be worth the very most because you’re only going to get a 40% or 50% loan-to-value, as it’s called. Then you borrow that money. In the case of a $500 million asset, maybe you get $250 million, and you build a new building with a construction finance loan.
“Forget about Trump: Every single real estate developer everywhere on Earth does this,” O’Leary said.
The concern, then, should be who lost money? “Nobody,” according to O’Leary, because the Trump Organization paid its bank loans. Thus, if James were to be consistent, she would sue “every real estate developer” in her jurisdiction, he said.