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Former President Donald Trump didn't disclose payments of more than $40 million to himself, undervalued the annual management costs of the Trump building by $1.6 million, and waited eight months to disclose the dissolution of some of his companies, the monitor overseeing his companies said.
Barbara Jones, a retired federal judge, submitted a report on the companies to Judge Arthur Engoron before he decides this week how much in penalties to impose on Trump for fraudulent asset evaluation that predated Jones' role as monitor. Jones wrote that the Trump Organization has implemented changes but needs to do more.
In September, Engoron issued a partial summary judgment in the case brought by New York Attorney General Letitia James, ruling that Trump and top executives at the Trump Organization committed fraud. Engoron held that Trump grossly inflated the value of his assets to obtain more favorable terms from lenders and insurers.
Engoron will rule on how much the front-runner for the 2024 Republican presidential nomination will pay in damages, as well as rule on six other accusations—including falsifying business records, insurance fraud and conspiracy claims. James is seeking the return of $370 million in profits Trump made.
"Absent steps to address the items above, my observations suggest misstatements and errors may continue to occur, which could result in incorrect or inaccurate reporting of financial information to third parties," Jones warned.
Her report will likely be weighed up by Engoron in deciding whether Trump should be banned for life from the real estate business in New York as James has requested.
Jones wrote in her report that she struggled for months to get any information on the dissolution of Trump companies.
"While I was informed of planned dissolutions in April 2023, the Trump Organization was not prepared to effectuate the dissolutions at that time," she wrote. "I requested that the Trump Organisation advise me immediately when the entities were dissolved. It was not until I inquired in December 2023 that I learned that many, but not all of the entities, had been dissolved in September and October 2023.
"I was not informed of cash transfers from the Trust and sent to Donald J Trump, each exceeding $5 million and totaling more than $40 million until my team conducted a review of Trust account bank statements."
The payments, previously disclosed, were used for legitimate purposes, such as tax payments and the $5 million that had to be paid to E. Jean Carroll for her sexual assault and defamation lawsuit against Trump in May 2023, the Trump Organization previously revealed.
She also found that management fees of $1.6 million were erroneously excluded from the 2024 budget of the Trump building at 40 Wall Street.
"After I identified this discrepancy, the Trump Organization confirmed that there was an error and indicated that it would correct and resubmit the budget to the lender," Jones noted.
Trump's lawyer, Chris Kise, strongly rejected Jones' findings.
"Wandering beyond her mandate, it appears the Monitor has been paid $2.6 million to "uncover" seven immaterial disclosure items, three irrelevant inconsistencies and five clerical errors," he wrote in a statement to Newsweek on January 29. "She even attempts to sensationalize President Trump's $40 million in tax payments by disingenuously characterizing them as a failure of disclosure. This is truly a joke.
"It is shocking that President Trump has been forced to pay millions for a Monitor to prove what he has said from the outset, namely, there is no financial reporting misconduct, no fraud and simply no basis for this abusive process to continue."
About the writer
Sean O'Driscoll is a Newsweek Senior Crime and Courts Reporter based in Ireland. His focus is reporting on U.S. law. ... Read more