A Loan listed on Donald Trump’s Personal Financial Disclosure Forms appears to be Hiding a Scheme in which he got Tens of Millions from Deutsche Bank and never Reported the Income to the IRS. It all adds up to a huge Violation of Federal Tax Law that Trump is Hiding behind one of the many LLCs (Limited Liability Company) that make up the Trump Organization.
Trump has Debts. How many Debts, and who is Collecting on those Debts, is not very clear. It’s especially not clear because Trump is fighting tooth and nail to Prevent the Release of his Tax Returns and to Prevent Banks from providing Congress with any information. But among Trump’s Loans there is one that may be more Mysterious than all the rest, and that’s the over $50 Million that Trump owes to Trump.
Trump’s Business is not actually a Single Business at all, but an Interwoven Network of over 500 LLCs and Holding Companies. They may have Different Names, Different Assets, and even Different Addresses, but what almost All these Companies have in common is that they are 100% Owned by Trump.
With that in mind, Mother Jones took a look a Trump’s Personal Financial Disclosure Forms and found that he Reports owing “over $50 million” to Chicago Unit Acquisition LLC. Trump owns that Company 100%. So he Owes that Debt to himself. Which isn’t necessarily Dishonest, but Trump sets the Value of Chicago Unit Acquisition at Zero. He’s borrowed at least Tens of Millions, but he doesn’t seem to be making any Payments on this “Loan” at all. That’s just the start of the Weirdness. On the Books of the Company, the Company that Trump Owns, the Loan to Trump is Classified as a High-Risk Loan.
That last thing is certainly true. But everything else about this situation Stinks to High Heaven. As the Mother Jones Analysis points out, it not only Violates every Rule of Accounting, but it also looks like Massive Tax Fraud.
Chicago Unit Acquisition seems to be tied to Trump’s Real Estate in that City, which would make sense, except for the Fact that it also doesn’t seem to have any Real Estate Assets. It seems very much as if Trump set up a Company, Passed Money through that Company, and Reported that Money as a Loan when it came to his Personal Finances. Except he owes No Interest and is making No Payments.
Asked about the Company in a New York Times Interview, Trump replied, “We don’t assess any value to it because we don’t care. I have the mortgage. That is all there is. Very simple. I am the bank.” Trump’s Attorney declared that the Company was Both “corporate trade secrets” and “nobody’s business.”
But the Secret here looks like Fraud. As the Mother Jones piece explains in Detail, Trump Borrowed most of the Money for his Chicago Project from, where else, Deutsche Bank. But when the Project turned out to be a Money Pit, he turned around and Sued Deutsche Bank. Because it was a lot Cheaper to Sue than it was to Pay what he Owed. In a Settlement that followed, Deutsche Bank may have forgiven Trump Part of what he Owed.
As far as the IRS is concerned, that Difference between what he actually Owed and what the Bank Agreed to take has another Name
Taxable Income.
And that seems to be where Chicago Unit Acquisition comes in. The real Secret Sauce here may be that Trump took the Paper Income that he gained by wrangling with Deutsche Bank and gave it to his On-Paper Company. That On-Paper Company then “Loaned” Trump that Theoretical Money. And just like that, Taxable Income was replaced by Debt.
The Scheme is known as “Parking Debt”, through which Borrowers Drop a Debt into an LLC that Exists for No Reason other than to Absorb the Loss and put Off Reporting the Income. It’s a Tactic that can range from Mildly Shady to a Serious Tax Scam. Parking a Debt without Paying it Back, which is exactly what Trump seems to have Done, Violates Federal Tax Law.
Trump Borrowed $640 Million from Deutsche Bank for his Chicago Tower. The Project Lost Money hand over fist, and Trump couldn't Pay it back. Instead, Trump Sued Deutsche Bank and got it to Agree to a Lesser Amount. The Difference between what Trump Borrowed and what he Agreed to Pay is considered Income by the IRS. Rather than Report the Income, Trump created an LLC and Parked that Money there in a Pretend Loan. If Trump had been making Payments on the Loan and Paying Taxes on that Income, all of this might have been Legal. But Trump hasn’t made any Payments and doesn’t List that LLC as having any Assets. That makes this Scheme another Violation of Federal Tax Law.
Trump also Wrote Off $915 Million from his Casino’s Bond Price Collapse, and it was Not even his Money, it was the Bond Holders Money, so both the Bond Holders and Trump wrote Off the Losses, even though None of the Money was Trumps.
NYC Wins When Everyone Can Vote! Michael H. Drucker
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