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Prior to an anticipated verdict in a fraud lawsuit that could pose a threat to Donald Trump’s extensive business ventures, a court-appointed overseer of his enterprises revealed financial statements that are “not fully accurate, display inconsistent findings,” or “include mistakes.”
As per the report, one of the discoveries indicates that the ex-president avoided paying taxes on a substantial amount of income by concealing funds through fraudulent loan deals.
According to a report by former federal judge Barbara Jones, Mr. Trump and his team have been compliant during the extensive monitoring period. However, a footnote in the 12-page report, addressed to New York Judge Arthur Engoron, suggests that the former president not only falsely stated his net worth and assets, as claimed by the state’s attorney general, but also that a significant $48 million loan for one of his properties may have been non-existent.
“When I asked about the loan, Ms. Jones stated that there are no official documents outlining the terms of the loan. However, it was understood to be a loan between Donald J Trump and Chicago Unit Acquisition, the LLC that assumed the debt for his Trump International Hotel and Tower in Chicago.”
“During recent conversations with the Trump Organization, it was revealed that they have concluded that this loan did not actually exist. Therefore, it will be omitted from any future forms submitted to government agencies and from corporate financial statements,” stated the author.
The report addresses a perplexing situation that has been discussed for many years: In his financial statements, Mr. Trump has declared a debt of “over $50m” to Chicago Unit Acquisition LLC, a company owned by Mr. Trump. This suggests that he owes a significant amount of money to a company under his control.
Alan Garten, the chief legal counsel for the Trump Organization, confirmed to The Daily Beast that the loan did indeed exist and was worth $48 million. He stated that this was just one of several incorrect details in the letter from the monitor, and that they will be addressing it with the court.
He referred to the loan agreement as an “internal loan,” in which Mr. Trump lent money to his own entity.
In a financial statement from October, Mr. Trump stated that he owed over $50 million to Chicago Unit Acquisition.
In 2016, Donald Trump acknowledged this agreement in an interview with The New York Times. He stated that he repurchased the loan from a consortium of banks a few years prior and continues to pay interest on it to himself. However, the LLC has been deemed to have little value.
“At that time, he stated, “We do not place any importance on it since we are not concerned.” He continued, “I possess the mortgage, which is the only factor. It’s quite straightforward. I am the lender.”
Mother Jones revealed in 2018 that there is a possibility that Mr. Trump falsely claimed to have taken out a loan in order to make it seem like his LLC had outstanding debt that was actually forgiven. This would have allowed him to avoid paying taxes on $48 million of debt that was supposedly cancelled. A letter from the court-appointed monitor in the fraud case, six years after the initial report, could further support the argument that the loan was never actually obtained.
It seems that a deal was made after the 2008 financial crisis when Mr. Trump was facing significant debt from his Chicago project. One of the main entities funding the project, Fortress, apparently agreed to forgive half of Mr. Trump’s original $100 million loan.
According to experts consulted by The Daily Beast, the transaction in question would count as $48 million in income that is required to be reported and taxed. However, Mr. Trump presented it as if he repurchased the loans. This allowed him to keep the $48 million from the forgiven debts and create a “loan” as a disguise.
In 2020, Forbes stated that Mr. Trump does not seem to be paying any interest on the loan and claims that the Chicago LLC has no worth, even though a $50 million loan was supposedly given. Harvard real estate professor Richard Peiser remarked to Forbes that there should be a corresponding entry elsewhere, but he cannot clarify the situation.
, also known as Trump Tower Chicago, is a skyscraper condo-hotel in downtown Chicago, Illinois.
The building in downtown Chicago, Illinois called Trump Tower Chicago or the Trump International Hotel and Tower is a tall residential and hotel combination.
The Trump family’s lawyer wrote a letter to Judge Engoron on Monday criticizing Ms. Jones’s report and stating that her claim about the Chicago loan was a “demonstrable falsehood” and a “deliberate mischaracterization”. The letter clarified that the Trump Organization did not inform Ms. Jones that the loan did not exist, but rather stated that there were no remaining liabilities or obligations under the loan.
He described her most recent report as a blatant attempt to protect her position and keep charging excessive fees.
The attorney Clifford Robert stated that the report, which was released shortly before a decision was expected, serves only two clear objectives. These are to guarantee that the monitor continues to receive excessive fees and to address the significant flaw in the attorney general’s argument, which is that there is no justification for ongoing supervision.
He characterised the monitor’s letter as part of what he called her “disingenuous and self-interested efforts to frame” Mr Trump and his co-defendants “in a false light to sustain her continued appointment.”
“The reports from the monitor only suggest a few small inconsistencies presented without context, in an attempt to find something, anything, to support her high fees,” he stated. “However, when over a year of thorough and costly supervision reveals no evidence of the alleged wrongdoing that the monitor was specifically tasked with uncovering, it is clear that the monitor serves no valid purpose going forward.”
The Independent has asked for further input from lawyers representing Mr Trump and the Trump Organization.
Judge Engoron’s upcoming ruling in the civil fraud case is a result of a 2022 lawsuit filed by New York Attorney General Letitia James. The lawsuit accuses the defendant of using deceptive financial statements for over ten years to secure favorable financing for their high-profile properties.
The pretrial ruling by the judge was scathing, as it found that the ex-president, along with his two grown sons and their top colleagues, had greatly inflated the value of their assets and misrepresented his overall wealth in order to obtain loans from banks and other lenders. As a result, the judge revoked their licenses and prevented them from conducting any business in the state. Additionally, a court-appointed overseer was put in place to monitor the activities and debts of their companies.
The judge’s penalties have been postponed due to an appeal, but a ruling has determined that Mr. Trump and his co-defendants are responsible for fraud, as stated in the high-profile lawsuit. A trial will now determine the amount they must pay, if any.
The attorney general’s office is requesting $370 million in “ill-gotten gains” from Ms. James’s office, claiming that the financing terms obtained through fraudulent means would have been higher if Mr. Trump’s true net worth and assets were taken into account by the banks.
She is also advocating for Mr. Trump to be permanently barred from conducting real estate business in New York and for his sons, Donald Trump Jr. and Eric Trump, to be banned from the industry for a minimum of five years.
After 11 weeks of testimonies from witnesses starting in October, and concluding with closing arguments earlier this month, Judge Engoron is anticipated to issue a final ruling by the end of January.
A ruling is anticipated shortly following a federal jury’s decision to hold Mr. Trump accountable for $83 million due to his continuous defamation of E Jean Carroll. Another jury had previously found Mr. Trump responsible for sexually assaulting Ms. Carroll and subsequently discrediting her accusations, leading to a barrage of hostile messages and death threats towards her.
The most recent ruling adds to the increasing number of legal issues for Mr. Trump, which include 91 charges across federal and state levels for alleged offenses during his time as president.
He has denied being guilty in all instances.
Cannot reword.
