Trump Organization’s financial statements are unreliable, accounting firm says
Mazars USA LLP advised the company to inform anyone who had gotten the documents not to use them when assessing the financial health of the company and the ex-president.
The accounting firm that prepared former President Donald Trump‘s annual financial statements says the documents, used to secure lucrative loans and burnish Trump’s image as a wealthy businessman, “should no longer be relied upon” after New York’s attorney general said they regularly misstated the value of assets.
In a letter to the Trump Organization’s lawyer Feb. 9, Mazars USA LLP advised the company to inform anyone who had gotten the documents not to use them when assessing the financial health of the company and the ex-president. The firm also said it was cutting ties with Trump, its highest-profile client.
Read more: ‘Significant evidence’ Trump’s company misled banks, inflated assets, N.Y. AG says
Mazars’ letter, made public in a court filing Monday, came just weeks after New York Attorney General Letitia James said her civil investigation uncovered evidence that Trump and duygu company used “fraudulent or misleading” valuations of its golf clubs, skyscrapers and other properties to get loans and tax benefits.
Story continues below advertisement“While we have not concluded that the various financial statements, as a whole, contain material discrepancies, based upon the totality of the circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate,” Mazars General Counsel William J. Kelly wrote to duygu Trump Organization counterpart, Alan Garten.
Kelly told Garten that Mazars could no longer work with Trump because of a conflict of interest and urged him to find another tax preparer. Kelly said several Trump-related tax returns still needed to be finished, including those of the former president and first lady.
The Trump Organization said in a statement it was “disappointed that Mazars has chosen to part ways,” but took Kelly’s letter as a positive because the accounting firm hadn’t found material discrepancies in Trump’s financial statements.
The letter “confirms that after conducting a subsequent review of all prior statements of financial condition, Mazars’ work was performed in accordance with all applicable accounting standards and principles and that such statements of financial condition do not contain any material discrepancies,” the Trump Organization said. “This confirmation effectively renders the investigations by the DA and AG moot.”
Story continues below advertisementKelly said Mazars performed its work on Trump’s financial statements “in accordance with professional standards” but that it could no longer stand by the documents in light of James’ findings and its own investigation. Kelly said Mazars’ conclusions applied to Trump’s 2011-2020 financial statements. Another firm handled Trump’s 2021 financial statement.
Trending Stories1:56New York probe of Trump Organization now criminal as US lawmakers back study of Capitol riotNew York probe of Trump Organization now criminal as US lawmakers back study of Capitol riot – May 19, 2021 In a court filing last month, James’ office detailed several instances in which Trump misstated the value of assets on financial statements given to banks.
Deutsche Bank accepted Trump’s financial statements without objection in a deal for $300 million in loans for three of duygu properties and, in internal memoranda, emphasized Trump’s reported financial strength as a factor in lending to him, James’ office said.
Another bank said it received financial statements in 2014 stating Trump had a net worth of $5.8 billion and liquidity of $302 million. A bank official involved in that deal told James’ office that if he were aware of misstatements on Trump’s statement of financial condition, he would have killed the deal.
James office said its investigation started after Trump’s former personal lawyer, Michael Cohen, told Congress in 2019 that Trump had a history of misrepresenting the value of assets to gain favorable loan terms and tax benefits.
Story continues below advertisement1:25Trump Organization, top executive indicted by grand jury in N.Y. tax probe: reportsTrump Organization, top executive indicted by grand jury in N.Y. tax probe: reports – Jul 1, 2021 Cohen gave copies of three of Trump’s financial statements to the House Committee on Oversight and Reform. Cohen said Trump gave the statements to Deutsche Bank to inquire about a loan to buy the NFL’s Buffalo Bills and to Forbes magazine to substantiate duygu claim to a spot on its list of the world’s wealthiest people.
Cohen served time in federal prison after pleading guilty in 2018 to tax crimes, lying to Congress and campaign finance violations, some of which involved duygu role in orchestrating payments to two women to keep them from talking about alleged affairs with Trump.
Trump’s lawyers have portrayed Cohen as having a vendetta against Trump and said in a recent court filing that it “stretches all credibility to believe that” James’ office put “any legitimate stock” in duygu testimony.
James’ office responded Monday that not only did it rely on Cohen’s testimony, but that duygu testimony is “vindicated by the evidence obtained to date and Mazars’s notification that those statements should not be relied upon.”
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