Former US President and Republican presidential candidate Donald Trump looks on as he speaks at a campaign rally in Erie, Pennsylvania, US, July 29, 2023.
Lindsay Dedario | Reuters
The free The financial monitor for the Trump Organization told a New York judge that he identified issues of incompleteness and inconsistencies in some disclosures to lenders and others by the company owned by former President Donald Trump.
Barbara Jones, the monitor, told New York Supreme Court Justice Arthur Engoron that Trump and his company have defended the Trump Organization’s disclosure practices in areas he has flagged, but will change how they will disclose information in light of his claims.
“In the interest of cooperation and transparency, the defendants agree to address in future disclosures to lenders the matters I have identified and to otherwise adjust their practices based on my observations,” Jones wrote. in a letter filed in court on Friday.
CNBC has reached out to attorneys and representatives of the Trump Organization seeking comment about Jones’ claims.
The former federal judge was appointed in November as a financial monitor as part of a case in which the company, Trump, and several of his children are being sued by New York Attorney General Letitia James for alleged massive fraud with relation to financial statements.
The trial in the case is set for October 2.
James, last year, requested an outside monitor after becoming concerned that Trump was trying to move the legal structure of his companies out of New York to avoid his jurisdiction.
Engoron wrote that James’ request was justified because of “repeated misrepresentations in each of Mr. Trump’s statements. [Statements of Financial Condition] between 2011 and 2021.”
Jones, in his letter to the judge, said the Trump Organization consists of assets held by the Donald J. Trump Revocable Trust, which serves as a guarantor for loans and owns commercial and residential real estate, hotels , golf course and licensing ventures , Among other things.
During his review of nine loan agreements, more than 75 financial disclosures, and thousands of supporting documents, Jones said he observed that information about some material liabilities provided to lenders .. . is incomplete.”
Those liabilities, he said, include “intercompany loans between or to entities of Truth and Donald J. Trump, certain of the Trust’s liabilities, as well as refundable membership deposits of the golf club.”
Jones wrote that “the Trust also did not always provide all of the required annual and quarterly certifications attesting to the accuracy of certain financial statements.”
He noted that the company’s annual audited financial statements for certain entities, prepared by an outside accounting firm, “list depreciation expenses.”
“However,” Jones added, interim financial statements provided to third parties, prepared within the Trump Organization regarding both entities, “do not consistently report impairment charges .”
The attorney general, in his lawsuit, alleged that the defendants committed massive fraud involving years’ worth of false financial statements related to the company’s business.
James is seeking $250 million and a bar to the Trump Organization from doing business in New York.
James claims that Trump exaggerated the values of assets in statements to banks, insurance companies and the IRS to obtain more favorable loan and insurance terms for his company, and to lower its tax obligations.