Dead parking

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Final Verdict: Tears Flow as Judge Engoron Shuts Door on Trump's Political
Special monitor suggests Trump falsified disclosures over $48 million loan in what could be tax evasion, report says
Katherine Tangalakis-Lippert

A court-appointed monitor in Trump's fraud case said his company filed disclosures with errors.

Tucked in a footnote is also an indication he may have committed tax fraud, per The Daily Beast.

The letter indicates Trump may have lied about the existence of a $48 million loan.

Tucked into a footnote in a letter written by a former federal judge, Barbara Jones — the court-appointed special monitor overseeing Donald Trump's New York business-fraud case — is a bombshell that appears to indicate the former president may have engaged in massive tax evasion, The Daily Beast reported.

The letter, first reported by The Messenger, was delivered Friday to update Manhattan Supreme Court Justice Arthur Engoron on Jones' findings while reviewing the former president's business dealings through the Trump Organization.

In it, Jones wrote the financial information filed to her by Trump's team contained "incomplete" or "inconsistent" disclosures containing multiple "errors." However, she described Trump and his businesses as "cooperative" with her investigation.

But buried in the sixth footnote of the 12-page letter is what The Daily Beast, citing legal experts, said was a clue that Trump evaded taxes on $48 million in income, with Jones writing that the massive sum — which Trump has claimed for years that he owes as a debt to one of his companies — seems to have never existed.

"When I inquired about this loan, I was informed that there are no loan agreements that memorialize the loan, but that it was a loan that was believed to be between Donald J. Trump, individually, and Chicago Unit Acquisition for $48 million," Jones wrote.

Referring to corporate financial statements filed by the company, she added: "However, in recent discussions with the Trump Organization, it indicated that it has determined that this loan never existed — and thus that it would be removed from any upcoming forms submitted to the Office of Government Ethics (OGE) and would also be removed from subsequent versions of MAML."

Jones and Alan Garten, a Trump Organization attorney, did not immediately respond to requests for comment from Business Insider.

A 'pretty brazen' plot
Garten told The Daily Beast an "internal loan" wherein Trump "leant money to the entity that he owns" did exist.

"That's one of many inaccuracies contained in the monitor's letter, which we will be addressing with the court," Garten told the outlet.

However, per The Daily Beast, as recently as October, Trump claimed in financial disclosures that he owed the sum to his company, Chicago Unit Acquisition, listing his debt as more than $50 million.

The discrepancies, if true, would indicate that the disclosures Trump filed with the federal government were intentionally submitted with inaccuracies related to the debt equating to tens of millions of dollars.

"It would appear, assuming Judge Jones' letter is accurate, that this amounts to tax evasion," Martin Lobel, a tax lawyer, told The Daily Beast.

He added: "This explains why the Republicans have been so intent on cutting the IRS's budget, because they don't want it to be able to audit transactions like this."

The $48 million central to this issue has been scrutinized before. In 2016, the then-candidate for president told The New York Times that he purchased an outstanding loan from several banks he owed money to and, instead of retiring it, chose to keep the debt outstanding and pay interest on it to himself.

However, in 2019, Mother Jones reported a significant portion of Trump's debt was forgiven by the hedge fund he owed money to after he paid about half of it.

So instead of paying income taxes of up to 39% on the forgiven debt, the outlet reported, Trump "invented a loan — and then parked it." Debt parking is the process of purchasing debt using a corporation to avoid paying income taxes on it. The maneuver is legal as long as the borrower intends to repay the loan but is illegal to engage in indefinitely.

Adam Levitin, a Georgetown University law professor specializing in commercial-real-estate finance, told Mother Jones at the time that the plot was "pretty brazen," adding: "If he didn't actually buy the loan, this is just garden-variety fraud."

"While the reasons behind claiming this fake loan are still unknown, at the very least he misled the government for years about his finances," Jordan Libowitz, the communications director at Citizens for Responsibility and Ethics in Washington, told The Daily Beast. "It appears that Trump knowingly and intentionally broke the law. The only question is how many laws."

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Legal analyst warns Trump "has some explaining to do" after court-monitor flags "fraud" evidence

02/05/24

Donald Trump David Dee Delgado/Getty Images
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MSNBC legal analyst Lisa Rubin warned of potential new criminal charges for Donald Trump after a court-appointed monitor overseeing his New York fraud case found that the former president's financial disclosures contained "certain deficiencies."

Former federal judge Barbara Jones wrote in a 12-page letter that she had identified "certain deficiencies in the financial information that I have reviewed, including disclosures that are either incomplete, present results inconsistently, and/or contain errors," adding in a footnote that a $48 million loan Trump claimed to owe to one of his companies did not exist. Rubin described how the letter "points to improprieties in Trump's financial statements."

"One of the things that it points to, and maybe the thing that's most troubling about it, is for years it's been understood that one of the business entities in the Trump Organization loaned former president Trump personally $48 million," she said. "According to Judge Jones in a footnote in this letter, she could never find, no matter how many times she asked, documentation of that loan and was later told, essentially, that the loan didn't exist."

Rubin added that the "Trump organization lawyers, they refute that. They say the loan did exist and what we did was give Judge Jones an intra-company memo telling her that debt had been extinguished. But I've looked at that memo from December 2023: it is a memo to the file, so nobody even had the guts to sign it essentially. It just says that the debt has been extinguished. There is still, to this day, no documentation that the loan existed."

"And you might be thinking to yourself, what's the big deal about that?" Rubin asked. ''The big deal is if that loan did not exist and it was, instead a gift, there would be massive tax consequences to that as well as some improprieties in the financial reporting that went to Trump's financial institutions and insurance companies. In essence, a continuation of that same fraud that's been going on for years and has been showing up in his financial disclosure."