Former U.S. President and Republican presidential candidate Donald Trump looks on as he speaks during a campaign rally in Erie, Pennsylvania, July 29, 2023.
Lindsay Dedario | Reuters
The independent financial monitor for the Trump Organization told a Latest York judge she identified problems with incompleteness and inconsistency in certain disclosures to lenders and others by the corporate owned by former president Donald Trump.
Barbara Jones, the monitor, told Latest York Supreme Court Judge Arthur Engoron that Trump and his company defended the Trump Organization’s disclosure practices within the areas she had flagged, but will change how they disclose information in light of her claims.
“Within the interest of cooperation and transparency, Defendants have agreed to deal with in future disclosures to lenders the items I even have identified and otherwise adjust their practices based upon my observations,” Jones wrote in a letter filed in court Friday.
CNBC has reached out to lawyers and representatives of the Trump Organization requesting comment about Jones’ claims.
The previous federal judge was appointed in November as a financial monitor as a part of a case where the corporate, Trump and several other of his children are being sued by Latest York Attorney General Letitia James for alleged widespread fraud related to financial statements.
The trial within the case is about for Oct. 2.
James, last yr, requested an out of doors monitor after becoming concerned that Trump was attempting to move the legal structure of his firms out of Latest York to avoid her jurisdiction.
Engoron wrote that James’ request was justified given the “persistent misrepresentations throughout every considered one of Mr. Trump’s [Statements of Financial Condition] between 2011 and 2021.”
Jones, in her letter to the judge, noted that the Trump Organization is comprised of assets held by the Donald J. Trump Revocable Trust, which acts as a guarantor for loans and owns industrial and residential real estate, hotels, golf courses and licensing ventures, amongst other things.
During her review of nine loan agreements, greater than 75 financial disclosures and 1000’s of supporting documents, Jones said she observed that “information regarding certain material liabilities provided to lenders … has been incomplete.”
Those liabilities, she noted, included “intercompany loans between or amongst Truth entities and Donald J. Trump, certain of the Trust’s contingent liabilities, in addition to refundable golf club membership deposits.”
Jones wrote that “the Trust also has not consistently provided all required annual and quarterly certifications attesting to the accuracy of certain financial statements.”
She noted that the corporate’s annual audited financial statements for certain entities, that are prepared by an out of doors accounting firm, “list depreciation expenses.”
“Nevertheless,” Jones added, interim financial statements given to 3rd parties, that are prepared internally by the Trump Organization concerning the same entities, “inconsistently report depreciation expenses.”
The attorney general, in her lawsuit, alleges the defendants committed widespread fraud involving years’ price of false financial statements related to the corporate’s business.
James is searching for $250 million and a bar on the Trump Organization from doing business in Latest York.
James alleges that Trump massively overstated the values of assets in statements to banks, insurance firms and the IRS to acquire more favorable loan and insurance terms for his company, and to lower its tax obligations.
