"Reliance
Defendants have argued vociferously throughout the trial that there can be no fraud as, they
assert, that none of the banks or insurance companies relied on any of the alleged
misrepresentations . The proponents of this theory posit that lenders demand complex statements
of financial condition but then ignore them.
Defendants' argument is to no avail, as none of plaintiff's causes of action requires that it
demonstrate reliance. Instead, plaintiff must merely show that defendants intended to commit
the fraud. Reliance is not a requisite element of either Executive Law § 63(12) or of any of the
alleged Penal Law violations. See, e.g., People v Essner, 124 Misc 2d 830, 834 (Sup Ct, NY
County 1984) ( Reliance then is not an element of [Penal Law § 175.45 - Falsifying Business
Records] , and documents subpoenaed to prove or disprove reliance by the banks are
immaterial ).
However, the Court notes that, although not required, there is ample documentary and
testimonial evidence that the banks, insurance companies, and the City of New York did, in fact,
rely on defendants to be truthful and accurate in their financial submissions. The testimony in
this case makes abundantly clear that most, if not all, loans began life based on numbers on an
SFC, which the lenders interpreted in their own unique way. The testimony confirmed, rather
than refuted, the overriding importance of SFCs in lending decisions.*
*To take one of innumerable examples, Robert Unell testified that Deutsche Bank and Ladder Capital
would have analyzed Donald Trump's net worth based on the contents ofthe SFCs. Indeed, witness after
witness testified that the SFCs were important to them, and/ or were the starting point of their analysis."
(emphasis added for the rubes)
