Accounting firm cuts ties with Trump, says financial statements unreliable
The accounting firm that prepared former President Donald Trump’s annual financial statements said the documents, used to secure lucrative loans and boost Trump’s image as a wealthy businessman, “should no longer be relied upon” after the New York Attorney General said they routinely misrepresent the value of trumps.
In a letter to the Trump Organization’s lawyer on February 9, Mazars USA LLP advised the company to advise anyone who obtained the documents not to use them when assessing the company’s financial health. and the former president. The company also said it was cutting ties with Trump.
Mazars’ letter, made public Monday in a court filing, came just weeks after New York Attorney General Letitia James said her investigators uncovered evidence that Trump and his company used “fraudulent” appraisals. or misleading” of its golf clubs, skyscrapers and other properties to obtain loans and tax benefits.
“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. Mazars General Counsel William J. Kelly wrote to his Trump Organization counterpart, Alan Garten.
Kelly said Mazars had done his work on Trump’s financial statements “in accordance with professional standards,” but he could no longer stand by the documents in light of James’ findings and his own investigation.
Mazars’ findings applied to Trump’s financial statements for 2011 through 2020, Kelly said. Another accounting firm handled Trump’s financials for 2021, court documents show.
Kelly also informed Garten that Mazars could no longer work with Trump due to a conflict of interest and urged him to find another tax preparer, alienating the firm from its most high-profile client and work that is at the heart of civil and criminal investigations.
The Trump Organization said in a statement it was “disappointed that Mazars chose to part ways” but viewed Kelly’s letter as positive – noting that the company did not find any material misstatements in the Trump’s financial statements.
The letter “confirms that after having carried out a subsequent review of all previous statements of financial position, the work of Mazars has been carried out in accordance with all applicable accounting standards and principles and that these statements of financial position do not contain any material misstatement,” the Trump Organization said. noted. “This confirmation effectively renders the DA and AG investigations moot.”
James’ office included a copy of the letter in a court filing as she seeks to enforce a subpoena for Trump and his two eldest children to testify under oath in his civil investigation into his business practices. The Manhattan District Attorney’s Office is conducting a parallel criminal investigation.
A state court judge, Arthur Engoron, is scheduled to hear arguments Thursday in the subpoena dispute.
The attorney general, a Democrat, has not taken legal action against Trump, a Republican, but she argues her nearly three-year investigation has uncovered enough evidence of wrongdoing to demand that Trump and his eldest children, Donald Jr. and Ivanka, answer questions under oath.
Fighting the subpoenas, Trump’s attorneys argued that any testimony they give in his civil investigation could be used against them in a parallel criminal investigation overseen by the Manhattan District Attorney’s Office.
Trump gave his financial disclosure statement – an annual snapshot of his holdings – to banks to secure hundreds of millions of dollars in loans on properties such as a Wall Street office building and a golf course in Florida, and to financial magazines to justify his place on the list of the richest people in the world.
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 as part of a $300 million loan deal for three of its properties and, in internal memoranda, pointed to Trump’s stated financial strength as a lending factor , James’s office said.
Another bank said it received financial statements in 2014 showing Trump had a net worth of $5.8 billion and cash of $302 million. A bank official involved in that deal told James’ office that if he had known of any inaccuracies in Trump’s statement of financial position, he would have canceled the deal.
James’ investigation and the Manhattan prosecutor’s investigation are at least partly related to allegations by Trump’s former personal attorney, Michael Cohen, that Trump had a habit of misrepresenting the value of assets – inflating them in some cases and minimizing them in others to obtain a favorable loan. tax conditions and advantages.
Cohen gave copies of three of Trump’s financial statements to the House Committee on Oversight and Reform during his testimony in 2019. Cohen said the statements, from 2011, 2012 and 2013, were the ones Trump gave to his main lender, Deutsche Bank, to inquire about a loan to buy the Buffalo Bills from the NFL and to Forbes magazine to justify his claim to a place on its list of the richest people in the world.
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