It’s a damning development for Trump’s company, as it lends credence to allegations that some of its financial statements were misleading or false. Here’s what happens.
Why the Trump Organization is under investigation
Did the former president’s company dodge taxes and/or commit fraud?
The attorney general in New York, where the Trump Organization is based, is investigating whether Trump undervalued his properties, such as his golf courses, so the company could pay less when paying taxes. She is also investigating whether the Trump Organization overstated the value of its properties with banks to get better loan deals.
There is a similar criminal investigation into the company by the Manhattan District Attorney, which alleges the company doctored tax records to avoid paying taxes.
What they have found so far
These two investigations have been going on for several years. The one being conducted by the New York Attorney General is a civilian investigation, which means it could result in the Trump Organization paying fines or being sued.
New York Attorney General Letitia James (D) has not alleged direct wrongdoing by the former president, but she is trying to get him and his children to speak under oath as she is trying to determine whether “widespread fraud” has permeated the Trump organization. She said her investigation obtained nearly 900,000 documents from the Trump Organization.
As for the criminal investigation led by the Manhattan District Attorney, the Trump Organization and its chief financial officer were indicted this summer on suspicion of keeping two sets of books to dodge taxes. Prosecutors allege the company had a set of internal books to track cars, tuition and gifts for company executives, and another set of books for tax authorities that omitted all of this. taxable remuneration.
How Trump’s accounting firm accounts for this
Mazars is an essential link for investigators. The accounting firm has worked with the Trump Organization for decades and helped the company prepare financial statements that Trump would provide to banks and potential business partners.
A number of these claims were simply untrue, The Post reported in 2019. For example, one said Trump Tower was 68 stories tall; he has 58. Another said a vineyard he owned in Virginia had 2,000 acres; he had 1,200.
These were so far from reality that an accountant told the Post it was “humorous”.
In 2019, when Trump’s exaggerated financials came to light, Mazars had no comment.
But as James’s investigation continued, Mazars suddenly decided he had no choice but to stop working with the former chairman’s firm and disavow a decade of financial statements that he said. she had prepared for the Trump Organization.
“Although we have not concluded that the various financial statements, taken together, contain material differences, based on the totality of the circumstances, we believe that our advice to no longer rely on these financial statements is appropriate. “said Mazars executive William J.” Kelly said in a recent letter revealed by James’s investigation. He cited the findings of James and Mazars’ own internal investigation as reasons for severing ties with the Trump Organization.
House Democrats say that reflects what they found in their investigations. They spent years trying to get financial records from Mazars – Trump sued, and that case went all the way to the Supreme Court. Congress eventually got the records and in October said it found that Trump’s financial statements for applying for a lease for the Trump International Hotel in DC were misleading.
“Mazars’ letter is further confirmation of what has long been suspected: Former President Trump’s claims about his shady financial dealings are simply not to be trusted,” Rep. Carolyn B. Maloney said. (DN.Y.), chair of the House Committee on Oversight. and Reform, which is still investigating Trump’s financial conflicts as president.
What this could legally mean for Trump
This is bad news for his business. Legal experts say that likely means the very firm preparing its documents came to its own conclusions that are consistent with at least some of the allegations made against the Trump Organization by investigators. It is quite damning that Mazars is now saying that it is one cannot trust one’s own work.
“Accounting firms don’t make the decision to leave their clients lightly,” said Barbara McQuade, a former federal prosecutor at the University of Michigan Law School. “…They are distancing themselves from the Trump Organization because they fear wrongdoing will be exposed.”
Could Mazars also be in trouble? McQuade said it was possible. “This effort to distance herself could be a self-preservation effort,” she said. It depends on whether Mazars knew the information he was getting from the Trump Organization was false or whether they were also misled.