As a New York decide weighs Donald J. Trump’s civil fraud case, new accusations of deficiencies in his firm’s monetary reporting may present the decide with ammunition for a forceful ruling in opposition to the previous president and his household enterprise.
The decide, Arthur F. Engoron, will quickly determine on any penalties Mr. Trump may face on account of the New York legal professional basic’s accusation that he fraudulently exaggerated his internet value to acquire favorable loans. After a monthslong trial, the legal professional basic, Letitia James, requested for a penalty of roughly $370 million, which might come on the heels of a separate jury verdict in a defamation case requiring Mr. Trump to pay $83.3 million.
The brand new accusations in opposition to Mr. Trump’s household enterprise, the Trump Group, got here late final week in a report from an out of doors monitor whom Justice Engoron assigned in late 2022 to control the corporate. The monitor, Barbara Jones, a former federal decide, has overseen how the corporate represents its funds to lenders.
Her report highlighted a number of paperwork points at a household firm attempting to shake a legacy of sloppiness: lacking disclosures, typos, math errors and questions on a $48 million mortgage between Mr. Trump and one among his corporations. Ms. Jones, now a legislation agency companion, instructed the decide that collectively, the problems “could replicate an absence of enough inner controls.”
On Monday, Mr. Trump’s legal professionals fired again, questioning Ms. Jones’s means as a monitor and accusing her of performing in unhealthy religion in order that the Trump Group must proceed to pay her. They stated she had not recognized any fraud, and that the corporate had addressed most of her issues.
“The monitor now twists immaterial accounting objects right into a narrative favoring her continued appointment, and thereby the continued receipt of tens of millions of {dollars} in extreme charges,” one of many legal professionals, Clifford S. Robert, wrote in a letter to Justice Engoron, noting that the corporate had already paid Ms. Jones greater than $2.6 million.
Ms. Jones didn’t reply to a request for remark.
Ms. Jones’s findings, and the response from Mr. Trump’s legal professionals, may embolden Justice Engoron, who usually appears skeptical of the previous president’s assertions and sympathetic to Ms. James’s case. Along with the $370 million penalty, Ms. James requested the decide, who will determine the case himself — there was no jury within the trial — to bar Mr. Trump and different defendants from working any firm within the state.
In a social media put up on Sunday, Mr. Trump took goal on the legal professional basic’s accusations, writing: “I AM WORTH MUCH MORE THAN THE NUMBERS SHOWN ON MY FINANCIAL STATEMENTS.” He has argued that his lenders weren’t victims, noting that they made cash from their dealings with him.
In her report, Ms. Jones discovered that the Trump Group had just lately offered some monetary info inconsistently. In monetary statements, for instance, the corporate stated that bills related to its downtown Manhattan constructing, 40 Wall Avenue, have been greater than $1 million. However when reporting the identical bills to a lender, the corporate claimed that they have been solely $100,000.
In his letter, Mr. Robert stated that the distinction resulted from the discrepancy between a projected annual funds — which was submitted to the lender — and the precise bills, which have been recorded within the monetary statements.
Ms. Jones additionally wrote that the Trump Group’s disclosures to lenders didn’t seem to completely honor mortgage phrases requiring Mr. Trump to submit details about his funds. She wrote, although, that she was not conscious of any issues expressed by lenders concerning the lacking info.
Maybe most intriguingly, the report raised new questions concerning the perplexing $48 million mortgage, a transaction involving Mr. Trump’s Chicago resort.
In a footnote, Ms. Jones wrote that when she inquired concerning the mortgage, the corporate instructed her {that a} mortgage settlement didn’t exist — and that actually the mortgage itself had “by no means existed.” But for years, on disclosure varieties required of presidential candidates, Mr. Trump had talked about the mortgage between himself and one among his corporations.
Mr. Trump’s legal professionals disputed Ms. Jones’s account. The Trump Group didn’t inform her that the mortgage by no means existed, his legal professionals stated on Monday: It existed, they stated, however nothing is at the moment owed.
“The monitor has included a demonstrable falsehood in her report,” Mr. Roberts stated in his letter.
Justice Engoron selected Ms. Jones to supervise the Trump Group within the fall of 2022, shortly after Ms. James filed the lawsuit that led to the civil fraud trial. She was nominated by each the legal professional basic’s legal professionals and legal professionals for Mr. Trump.
Ms. James has requested that the monitor oversee the corporate for years to return — a consequence that Mr. Trump’s legal professionals objected to vehemently of their Monday letter. They in contrast Ms. Jones to the zealous police inspector villain in “Les Misérables.”
“Additional oversight is unwarranted,” they wrote, saying it could “unjustly enrich” Ms. Jones as she “engages in some ‘Javert’-like quest” in opposition to them.
