NATIONAL NEWS

Accounting firm: Trump financial statements aren’t reliable

Feb 14, 2022, 8:41 PM | Updated: Jun 13, 2022, 3:40 pm
Former President Donald Trump speaks at a rally on Sept. 25, 2021, in Perry, Georgia. (Photo by Sea...
Former President Donald Trump speaks at a rally on Sept. 25, 2021, in Perry, Georgia. (Photo by Sean Rayford/Getty Images)
(Photo by Sean Rayford/Getty Images)

NEW YORK (AP) — 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.

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 his company used “fraudulent or misleading” valuations of its golf clubs, skyscrapers and other properties to get loans and tax benefits.

“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 his 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.”

Kelly 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.

James’ office included a copy of Kelly’s letter in a court filing as she seeks to enforce a subpoena to have Trump and his two eldest children, Donald Jr. and Ivanka, testify under oath. A state court judge, Arthur Engoron, is scheduled to hear arguments Thursday in the subpoena dispute.

James, a Democrat, said Monday that given the evidence, “there should be no doubt that this is a lawful investigation and that we have legitimate reason” to question Trump, a Republican, and his children, both of whom have been Trump Organization executives.

Trump’s lawyers have argued that any testimony they give could be used against them in a parallel criminal investigation being overseen by the Manhattan district attorney’s office — a probe that led to tax fraud charges last year against the Trump Organization and Allen Weisselberg, its longtime chief financial officer.

Trump has given his Statement of Financial Condition — a yearly snapshot of his holdings — to banks to secure hundreds of millions of dollars worth of loans on properties such as a Wall Street office building and a Florida golf course, and to financial magazines to justify his place among the world’s billionaires.

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 his 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.

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 his 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 his 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 his testimony.

James’ office responded Monday that not only did it rely on Cohen’s testimony, but that his testimony is “vindicated by the evidence obtained to date and Mazars’s notification that those statements should not be relied upon.”

KSL 5 TV Live

Top Stories

National News

A sign marking the entrance to Hildale in Utah, from Colorado City in Arizona. (FILE)...
Larry D. Curtis

FBI says polygamist leader took 20 wives, many underage, alleges illicit sexual activities

Probable cause documents lay out illicit sexual activities of a small religious group — that included underage girls — under the orders of Samuel Rappylee Bateman, living on the Utah and Arizona border. The documents also detail how girls were helped to run away by Bateman’s adult plural wives after they were removed from family […]
13 hours ago
LONDON, ENGLAND - OCTOBER 29: In this photo illustration, three screens display the splash page for...
Associated Press

Facebook parent Meta threatens to remove news from platform

Facebook parent Meta Platforms says it will be forced to consider removing news content from its platform if Congress passes legislation that could require social media companies to pay news outlets.
13 hours ago
(File) Front row, left to right: Associate Justice Sonia Sotomayor, Associate Justice Clarence Thom...
JESSICA GRESKO and MARK SHERMAN, Associated Press

Justices spar in latest clash of religion and gay rights

The Supreme Court’s conservative majority is sounding sympathetic to a Christian graphic artist who objects to designing wedding websites for gay couples.
13 hours ago
MIAMI, FLORIDA - MARCH 08: Shipping containers are stacked at PortMiami after being offloaded from ...
Chris Isidore, CNN Business

US trade deficit edged up to $78.2 billion in October

The US trade gap edged only slightly higher in October than the month before, to $78.2 billion.
13 hours ago
People visit a makeshift memorial near the Club Q nightclub on November 22, 2022 in Colorado Spring...
Colleen Slevin, Associated Press

Colorado gay club shooting suspect charged with hate crimes

The suspect accused of entering a Colorado Springs gay nightclub and killing five people and wounding 17 others was formally charged with hate crimes as well as murder.
13 hours ago
FILE: Residents wait in line to vote early outside a polling station on November 29, 2022 in Atlant...
Bill Barrow and Jeff Amy, Associated Press

Warnock or Walker? Georgia runoff to settle last Senate seat

Georgia voters on Tuesday are deciding the final Senate contest in the country, choosing between Democratic Sen. Raphael Warnock and Republican football legend Herschel Walker.
13 hours ago

Sponsored Articles

house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 reasons you may want to consider apartment life over owning a home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Take this quiz before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t let a ransomware attack get you down | Protect your workplace today with cyber insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Hand turning a thermostat knob to increase savings by decreasing energy consumption. Composite imag...
Lighting Design

5 Lighting Tips to Save Energy and Money in Your Home

Advances in lighting technology make it easier to use smart features to cut costs. Read for tips to save energy by using different lighting strategies in your home.
Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
Accounting firm: Trump financial statements aren’t reliable