An explosive new report has emerged from The Daily Beast that suggests the former president may have participated in massive tax evasion. The bombshell was found in a footnote of a letter written by Barbara Jones, a former federal judge who is now serving as the special monitor overseeing Donald Trump’s New York business fraud case.
The Messenger was the first to disclose that Justice Arthur Engoron of the Manhattan Supreme Court received the letter on Friday, which updated him on the results of the investigation into the former president’s commercial operations through the Trump Organization conducted by Jones.
Jones claims in the document that Trump’s team has sent her financial documents that include “incomplete” or “inconsistent” declarations and numerous “errors.” But she says Trump and his companies have been “cooperative” throughout her probe.
Jones writes that the enormous amount—which Trump has maintained for years that he owed as a debt to one of his companies—never existed, but it is concealed in the sixth footnote of the 12-page letter. This, according to the Daily Beast, suggests that Trump would have avoided paying taxes on $48 million in income.
“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,” said Jones.
Jones included the following in her letter: “However, in recent discussions with the Trump Organization, it indicated that it has determined that this loan never existed — and thus it would be removed from any upcoming forms submitted to the Office of Government Ethics (OGE) and from subsequent versions of MAML.” This passage concerns the company’s financial statements.
Alan Garten, an attorney for the Trump Organization, and Jones did not immediately return Business Insider’s calls seeking comment.
A “quite audacious” scheme
This “internal loan” that Trump “loaned money to the entity that he owns” does exist, according to Garten, who spoke with The Daily Beast.
“That’s one of many inaccuracies contained in the monitor’s letter, which we will be addressing with the court,” Garten told the news organization.
But according to the Daily Beast, Trump has been claiming to owe more than $50 million to his company, Chicago Unit Acquisition LLC, in his financial declarations as late as October.
If the inconsistencies are accurate, Trump knowingly submitted debt reports to the federal government that were inaccurate to the tune of tens of millions of dollars. “If Judge Jones’ letter is correct, then this seems like tax evasion,” tax attorney Martin Lobel told The Daily Beast.
According to him: “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.”
There has been a prior examination of the $48 million at the heart of this matter. While running for president in 2016, the then-candidate revealed to The New York Times that he had taken out loans from multiple institutions but had chosen not to pay them off. Instead, he kept the debt and paid himself interest.
But in 2019, according to Mother Jones, Trump was able to get a large chunk of his debt forgiven by the hedge fund he owed money to after paying off half of it.
According to the source, Trump “created a loan — and then parked it” to avoid paying income taxes of up to 39% on the forgiven debt. The practice of buying debt through a corporation to evade paying income taxes on it is known as debt parking. Borrowers can legally use this tactic so long as they plan to pay back the loan, but doing so forever is against the law.
The strategy was “pretty brazen,” said Adam Levitin, a law professor specializing in commercial real estate finance at Georgetown University, who had previously told Mother Jones: “If he didn’t buy the loan, this is just garden-variety fraud.”
According to Jordan Libowitz, communications director of Citizens for Responsibility and Ethics in Washington, “At the very least he misled the government about his finances for years.” The reasons behind claiming this phony loan are still unknown, according to The Daily Beast. It would seem that Trump disregarded the law on purpose. The sole inquiry is the number of laws.
