Trump Is Al Capone’s Soul Mate, He May Be Guilty Of $50M Tax Evasion

Donald Trump is too stupid to know what a Freudian slip is. I think his Al Capone references are not that. I think Trump genuinely admires Capone as one mobster to another, the way he admires dictators and strongmen. But I wonder if Trump will continue to laud the late gangster from the podium as it becomes more widely known that former federal judge Barbara Jones, the court-appointed special monitor in the Trump Organization fraud trial, found a suspicious financial transaction, disguised as a loan, which might in fact be evidence of $50,000,000 in unreported income to the IRS?

That’s a chunk of change. And you remember what put King Alphonse behind prison bars, don’t you? They couldn’t get him on murder but they nailed him on income tax evasion. I wonder if Trump knows? I seriously doubt it, but maybe he does and maybe he really is doing the opposite of virtue signaling with his Scarface references. Maybe Trump is signaling that he’s guilty as hell, he knows it, and he’s even pretty sure on what charge will actually get him a room in the House Of Many Doors. Daily Beast:

The detail came in a letter Jones filed on Friday to update New York Judge Arthur F. Engoron, first reported by The Messenger, on her efforts to get a full and clear accounting of the Trump Organization’s assets. The letter claims, yet again, that Trump and his company have filed statements containing inconsistencies and errors, but have been “cooperative” in the review process.

But Jones tucked a major revelation into footnote 6, writing that a massive chunk of debt Trump has claimed to owe one of his own companies for years apparently does not exist, and never did.

“When I inquired about this loan, I was informed that there are no loan agreements that memorialize the loan, but that it was a loan that was believed to be between Donald J. Trump, individually, and Chicago Unit Acquisition for $48 million,” Jones wrote, referencing the name of Trump’s LLC that held his debt.

“However, in recent discussions with the Trump Organization, it indicated that it has determined that this loan never existed—and thus that it would be removed from any upcoming forms submitted to the Office of Government Ethics (OGE) and would also be removed from subsequent versions of [corporate financial statements],” Jones wrote.

If true, that would essentially be an admission from the Trump Organization that all the financial disclosures Trump has filed with the federal government listed an entirely fictional debt worth tens of millions of dollars, which Trump claimed he personally owed to one of his own companies.

Asked to comment on Jones’ letter, Alan Garten, chief legal counsel for the Trump Organization, told The Daily Beast that her claim—that the company confessed to the loan never existing—was inaccurate and the loan did in fact exist.

“That’s one of many inaccuracies contained in the monitor’s letter, which we will be addressing with the court,” Garten said in a phone interview.

This should be interesting, indeed. One of “many” inaccuracies, the man says. Garten says the “LLC actually owed the money to Trump.’ Garden said, “Yes, the loan existed,” specifying that it was “an internal loan” where Trump “lent money to the entity that he owns.” Okay, so he took money out of one account and put it in another, much as you or I grab a “loan” from savings and then pay ourselves back when the financial crisis of the moment has passed. A few more details:

Yet all of Trump’s financial disclosures, including his most recent amended version approved by the OGE last October, clearly state that it was Trump who owed Chicago Unit Acquisition LLC. He’s consistently listed his debt as more than $50 million, in the form of what’s known as “springing loan”—a loan with unfavorable terms to the borrower.

In fact, Trump confirmed this arrangement himself. In a 2016 interview with The New York Times, Trump claimed that he bought back this loan from “a group of banks several years ago.” Trump said that he’d chosen to keep the debt on his books, the Times reported, claiming that he pays interest on it to himself—despite the LLC’s “practically worthless” valuation.

“We don’t assess any value to it because we don’t care,” Trump said in the interview. “I have the mortgage. That is all there is. Very simple. I am the bank.”

What’s that you say? Trump is keeping the debt for a worthless company on his books….so if it’s worthless, why would he do that? Um….because he’s lying? Because he knew that his Chicago business never gave him any loan — although he has repeatedly said that it did. Could he have created a fake loan to avoid income taxes and pocketed the money? Because that’s not only the knee jerk reaction to these facts, but that’s what financial people have theorized after reasoning through all the available facts. Uh oh, spaghettios.

“While the reasons behind claiming this fake loan are still unknown, at the very least he misled the government for years about his finances,” Libowitz said. “It appears that Trump knowingly and intentionally broke the law. The only question is how many laws.” […]

The OGE warns filers that the Justice Department may bring civil or criminal action against any individual who “knowingly and willfully” falsifies or omits any required information on their disclosures. The Trump Organization’s promise to remove the debt from upcoming OGE filings would indicate that all of Trump’s prior filings—dating to the 2015 fiscal year—contained a staggering inaccuracy.

This mysterious chunk of debt has long been a white whale for Trumpworld financial reporters. It has always seemed odd that Trump owed $50 million or more to a company that he fully owns. Odder still, Trump also reports that this company—Chicago Unit Acquisition LLC—doesn’t make money or have any value at all. It would seem logical, reports point out, that a company with a $50 million credit on its books would have a value of at least that amount. This LLC, however, is reported as having no value.

“There should be an offsetting entry somewhere,” Harvard real estate professor Richard Peiser told Forbes in 2020. “I can’t explain that.”

The Daily Beast consulted multiple tax experts to analyze the new revelation, and the general opinion was that Trump may have created a fake loan to avoid income taxes. [Emphasis mine.]

As Mother Jones and other outlets have reported, the loan supposedly stemmed from a complex emergency financial restructuring that Trump scrambled to throw together amid the 2008 real estate crash, when he was loaded down with $800 million in debt from his faltering Chicago Hotel and Tower and his empire faced a very real risk of collapse.

(While many real estate investors and developers ate crow in the 2008 crash, Trump managed to dodge the worst of it—thanks, in part, to Russian oligarch and fertilizer king Dmitry Rybolovlev, who bought a Palm Beach mansion from Trump for $95 million that July. Trump had paid $41 million for the place four years earlier, and netted $54 million in the deal.)

During his maneuvering, Trump convinced one of the entities funding that project—a financial firm called Fortress—to cut him a deal on the slightly less than $100 million they’d loaned him for the project. As prior reports show, Fortress eventually agreed to cancel half that original amount in 2012, forgiving Trump a total of $48 million.

Normally, tax experts told The Daily Beast, that would qualify as $48 million in reportable, taxable income. But instead, these experts said—as experts previously told Mother Jones—it now looks like Trump may have made it look like the debt wasn’t canceled, but that he instead bought it from Fortress. His 2016 statements to The New York Times—that he had in fact bought this specific loan back from a group of banks—further supports this theory.

So it looks like Trump lied about the disposition of the loan. If the loan was forgiven, then that would trigger a taxable event. Which he knows or his accountants know.

To pull this off, Trump would have fabricated the “loan” that he claimed to owe Chicago Unit Acquisition LLC. This would make it appear on paper as if Trump had used the LLC to buy his debt from Fortress. Now—as Mother Jones reported, and as tax experts told The Daily Beast—instead of owing Fortress $48 million, Trump was saying that the debt simply got transferred and he now owed his LLC $48 million.

In reality, however, according to the reports, Fortress had canceled that debt. It did not exist.

This is starting to sound like the complex financial machinations which underpin Truth Social and you know how incomprehensible they are, what with SPACS named DWAC and $18 million fines by the SEC on a company that could conceivably go under before it can pay that kind of a fine. Nothing is simple in Trump world and the last job you want to have, besides being Trump’s lawyer, is being Trump’s accountant. Go ask Allen Weisselberg, he had three years to think about it when he was behind bars.

And of course, things get worse.

But it appears even worse in Trump’s case: He apparently never bought the debt to begin with. If so, the experts said, Trump would have essentially pocketed the $48 million that had been canceled, and then simply invented a new loan to cover it up or misdirect financial scrutiny.

Sounds far-fetched. But that’s exactly why it’s so notable that Barbara Jones’ footnote happens to fit this bizarre, seemingly outlandish scenario.

Just one more rock on the financial malfeasance pile, but this one is as big as Gibraltar. Let’s see if it gets mentioned in Judge Arthur Engoron’s judgment, which should be rendered tomorrow.