jamiesfeast – Former federal judge Barbara Jones, the court-appointed special monitor in Donald Trump’s New York business fraud case, has recently uncovered a shocking revelation. Legal experts believe that this finding indicates that Trump knowingly and repeatedly lied on his federal financial disclosures regarding a non-existent loan, and may have also evaded taxes on $48 million in income. Jones’ discovery has placed a financial bombshell in the ongoing investigation.
In a letter submitted to New York Judge Arthur F. Engoron, Jones provided a detailed update on her ongoing pursuit for an accurate and comprehensive assessment of the Trump Organization’s assets. The Messenger was the first to report on this development. According to the letter, Jones contends that Trump and his company have consistently filed statements that contain discrepancies and mistakes. However, she acknowledges their cooperation throughout the review process.
Jones surprised readers with a major revelation in footnote 6. He disclosed that the significant debt that Trump has been claiming to owe one of his own companies for years does not actually exist and never did.
According to Jones, when he asked about the loan, he was told that there were no official loan agreements documenting it. However, it was believed to be a loan between Donald J. Trump and Chicago Unit Acquisition, amounting to $48 million. Jones mentioned the name of Trump’s LLC that held the debt.
On October 4, 2022, the prestigious Trump International Hotel & Tower Chicago, located at 401 N. Wabash Ave., hosted an exceptional event.
During recent discussions with the Trump Organization, they have stated that they have concluded that the loan in question never actually existed. As a result, they have made the decision to remove it from any future forms that will be submitted to the Office of Government Ethics (OGE) and it will also be excluded from any future versions of the corporate financial statements.
If this is true, it would essentially mean that the Trump Organization is admitting that all of the financial disclosures filed by Trump with the federal government listed a completely fabricated debt worth millions of dollars. Trump had claimed that he personally owed this debt to one of his own companies.
Alan Garten, chief legal counsel for the Trump Organization, responded to Jones’ letter by stating that her claim about the company confessing to the non-existence of the loan was inaccurate. According to Garten, the loan did exist.
In a phone interview, Garten stated that the monitor’s letter contained numerous inaccuracies, which will be addressed with the court.
In direct contradiction to the ex-president’s own statements regarding the mysterious loan, Garten consistently maintained that the LLC was actually indebted to Trump. When asked to verify the existence of the loan, Garten responded affirmatively, clarifying that it was an internal loan in which Trump had lent money to his own entity.
In all of his financial disclosures, including the most recent amended version approved by the OGE last October, Trump has clearly stated that he owes Chicago Unit Acquisition LLC. He consistently lists his debt as over $50 million, in the form of a “springing loan” with unfavorable terms for the borrower.
In 2016, Trump personally confirmed this arrangement during an interview with The New York Times. He stated that he had repurchased the loan from a group of banks a few years ago. Trump also mentioned that he decided to keep the debt on his books and pays interest on it to himself, despite the LLC’s nearly worthless valuation.
“We don’t place any significance on it because we simply don’t care,” stated Trump in the interview. “I personally hold the mortgage, and that’s the extent of it. It’s as straightforward as that. Essentially, I am the bank.”
Jones did not immediately reply to an email from The Daily Beast asking if she would like to respond to Garten’s claims.
According to Jordan Libowitz, the communications director at Citizens for Responsibility and Ethics in Washington, if the court filing is accurate, it would suggest that Trump deliberately and repeatedly violated the law.
According to The Daily Beast, Libowitz emphasized that when individuals complete their personal financial disclosures, they are required by law to affirm the accuracy of the information provided. In the case of Trump, it is evident that he must have been aware that his Chicago business did not provide him with a loan exceeding $50 million, despite repeatedly claiming otherwise.
According to Kedric Payne, the general counsel for ethics at watchdog Campaign Legal Center, it is highly unlikely that authorities would dismiss the repeated filings and personal nature of the loan as an unintentional oversight.
According to Payne, accurate reporting of debt is required by financial disclosure laws. He believes that Trump did not accurately report this loan, and it is unlikely that he will be given the benefit of the doubt that it was a simple mistake. Payne argues that the purpose of disclosure laws is defeated if the public does not have complete and accurate financial information about their elected officials.
Throughout the past year, Jones has been diligently investigating the loan in question, giving President Trump numerous chances to rectify his claim. However, even in his most recent amended disclosure filed in October, Trump failed to address this issue.
According to Libowitz, it is still unclear why this fake loan was claimed, but what is certain is that he deceived the government about his financial situation for a long time. It seems that Trump was fully aware of his actions and intentionally violated the law. The only thing left to determine is the extent of his legal transgressions.
Donald Trump and his children, Eric, Ivanka, and Donald Jr., held a press conference at the Trump International Hotel and Tower in Chicago on September 24, 2008.
The Office of Government Ethics (OGE) cautions individuals that the Justice Department can take legal action, be it civil or criminal, against anyone who intentionally and knowingly provides false or incomplete information on their disclosures. By pledging to exclude the debt from future OGE filings, the Trump Organization essentially admits that all of Trump’s previous filings, going back to the 2015 fiscal year, contained a significant error.
The enigmatic debt has always been a puzzling enigma for financial reporters in Trumpworld. It has consistently raised eyebrows that Trump is indebted for $50 million or more to a company that he himself fully owns. Stranger still, Trump claims that this company, Chicago Unit Acquisition LLC, holds no value and does not generate any profits whatsoever. Common sense would dictate that a company with a $50 million credit on its balance sheet would possess a value equal to or greater than that amount. However, reports highlight that this LLC is declared as having no value at all.
Harvard real estate professor Richard Peiser expressed his confusion in a 2020 interview with Forbes, stating, “There should be an offsetting entry somewhere. I can’t explain that.”
Multiple tax experts were consulted by The Daily Beast to analyze the recent revelation. The consensus among these experts is that Trump may have fabricated a loan in order to evade paying income taxes.
According to a 2019 analysis by Russ Choma from Mother Jones, it seems that Jones’ letter aligns with the findings. The analysis suggests that Trump potentially engaged in tax fraud by creating a false loan and falsely portraying his LLC as still owing a debt that had actually been completely forgiven. By doing so, Trump could have avoided paying taxes on $48 million of canceled debt, which could have amounted to a tax rate of up to 39 percent.
According to Jones’ letter, the Trump Organization itself confirms the main point of the theory: the non-existence of the loan.
As reported by Mother Jones and other media outlets, the loan was a result of a hurried financial restructuring that Trump undertook during the 2008 real estate crash. At that time, he was burdened with a massive $800 million debt from his struggling Chicago Hotel and Tower, and his entire business empire was at risk of collapsing.
During the 2008 crash, numerous real estate investors and developers faced significant losses. However, Trump was able to avoid the worst of it. This was partly due to his sale of a Palm Beach mansion to Russian oligarch Dmitry Rybolovlev, who is known as the fertilizer king. Trump sold the mansion for an impressive $95 million in July of that year. Notably, Trump had initially purchased the property for $41 million four years prior, resulting in a net gain of $54 million from the deal.
During his negotiations, Trump managed to convince Fortress, a financial firm that provided funding for the project, to make a deal on the loan of nearly $100 million. According to previous reports, Fortress ultimately agreed to forgive half of the original amount in 2012, resulting in Trump being relieved of $48 million in debt.
Tax experts have informed The Daily Beast that under normal circumstances, the cancellation of a debt amounting to $48 million would be considered as reportable and taxable income. However, as previously explained by experts to Mother Jones, it appears that Trump may have created the illusion that the debt was not canceled, but rather that he purchased it from Fortress. This theory is further supported by Trump’s statements to The New York Times in 2016, where he claimed to have bought back this particular loan from a group of banks.
Martin Lobel, a well-known tax lawyer from Washington, D.C., who was also interviewed by Mother Jones for their 2019 report, believes that the newly revealed information supports the theory of tax fraud.
According to Lobel, if Judge Jones’ letter is accurate, it seems that this can be categorized as tax evasion.
In May 10, 2006, Donald Trump strikes a pose across the street from the location of the Trump International Hotel and Tower Chicago, following a news conference in Chicago.
According to him, the Republicans have been actively reducing the IRS’s budget to prevent it from auditing transactions like this.
According to Martin Sheil, a former special criminal investigative agent for the Internal Revenue Service, the letter implies an attempt to evade taxes.
Sheil described the entire situation as questionable and referred to the supposed “springing loan” as suspicious. She pointed out that the fact that Jones, in his role as a court-appointed monitor, officially acknowledges the transaction as a $48 million loan that never actually existed, is cause for concern.
According to Sheil, the absence of any loan agreements or evidence of an actual loan raises the possibility that the large money transfer could be classified as income. Sheil also pointed out that even if the transfer was initially intended as a loan, forgiving the “debt” would result in a taxable event.
In order to accomplish this, Trump would have had to create a false “loan” that he stated he owed Chicago Unit Acquisition LLC. This would make it seem as though Trump had utilized the LLC to purchase his debt from Fortress. According to a report by Mother Jones, and as confirmed by tax experts, Trump was now claiming that instead of owing Fortress $48 million, the debt had been transferred and he now owed his LLC $48 million.
According to the reports, Fortress had actually canceled that debt, indicating that it was non-existent.
According to tax experts, borrowers sometimes engage in a tactic known as “parking” their debt in a related entity and later paying it down. This practice is not uncommon among major borrowers. However, it can potentially become a criminal issue if the debt is parked with no intention of ever repaying it.
Experts suggest that the situation is even more concerning in Trump’s case: it seems that he never actually acquired the debt in the first place. If this is true, Trump would have essentially kept the $48 million that was forgiven and then fabricated a new loan to conceal it or divert financial scrutiny.
It may sound far-fetched, but that’s precisely what makes Barbara Jones’ footnote so remarkable. It unexpectedly aligns with this peculiar and seemingly outlandish scenario.
Both Barbara Jones and “Mother Jones” confirm that the actual loan amount is $48 million, which contradicts Trump’s claim of $50 million or higher in his disclosures. “Mother Jones” obtained this information in 2019 from a source with direct knowledge, while Barbara Jones received it directly from the Trump Organization.
Trump consistently included this substantial amount of undisclosed debt on his tax returns and annual financial statements, as required by his presidential obligations, to provide transparency regarding his financial situation. It remains uncertain why the debt was categorized as “more than $50 million” on the statements when, as indicated in the Jones letter, it was actually $48 million, falling within the “$25 million-$50 million” range.
The reason behind the delay in Trump and his team realizing that the massive debt he believed he had been carrying for years was non-existent remains unclear. It is puzzling why it took them so long to come to this realization.
In a surprising turn of events last year, Donald Trump actually fulfilled his tax obligations by paying a substantial amount. According to a letter from Barbara Jones, the total sum paid by Trump was a staggering $29 million. Had he been subject to the 39 percent capital gains tax on his $48 million income, the amount owed would have exceeded $18 million.
The reason behind Trump’s decision to start paying taxes this year remains unclear, as the letters do not provide a clear explanation. However, in the previous letter filed in November, Jones hinted at the enigmatic Chicago loan.
According to Jones, he has also examined the details concerning the presence of an intercompany loan linked to the property in Chicago. The defendants are currently conducting further investigation into this matter to determine if there are any reporting obligations or necessary documentation.
Sheil expressed her frustration with the GOP’s “defund the IRS” movement and emphasized that taking legal action against Trump was not a certainty.
According to Sheil, the Trumpster always deflects responsibility when it comes to financial fraud. He has a tendency to point fingers at others, such as his accounting firm Mazars, for any missteps. Sheil notes that Trump is quick to blame his accountants, lawyers, or anyone else except himself for any financial irregularities.
Establishing intent will be crucial in the investigation, according to Sheil. This may require the cooperation of witnesses to shed light on the matter.
He emphasized that documents are reliable sources of information, while people can be deceptive.