Richard Hito
special cooperation

In 2019, the CPA was invited by news website ProPublica to examine documents prepared by the Trump Organization regarding one of its jewels: 40 Wall Street, also called the Trump Building, a 71-story tower located in Manhattan’s financial district.

She submitted some documents to the New York tax authorities, and submitted others to a lending institution.

“I said at the time that there seemed to be two sets of accounting records,” he recalled Journalism He is also Professor of Commercial Real Estate at Montclair State University in New Jersey.

“And I haven’t changed my mind about it. There is something in there,” he added, hinting at possible fraud.

Kevin Riordan voiced that belief during a dark week for Donald Trump. Last Monday, New York State Attorney General Leticia James submitted to New York Judge Arthur Ngoron a court document containing a heartbreaking letter.

In this February 9 letter, accounting firm Mazars USA LLP declared to the Trump Organization that financial statements it provided to it nearly a decade ago were not reliable. So he urges her to inform everyone who received it, including lenders and insurance companies.

Three days later, this document contributed to an important victory for Laetitia James.

Le juge Engoron a décidé d’obliger Donald Trump et deux de ses enfants à témoigner sous serment dans le cadre de l’enquête civile de la procureure générale visant l’entreprise familiale (le procureur de Manhattan êmin êcri le lemène) active).

The former president can appeal that decision, but he has to wonder when his latest string of legal failures will end.

Kevin Riordan also asks himself several questions, including this one: How will Donald Trump be able to hire a new accounting firm?

sense of fraud

“Suppose I run the accounting firm Kevin Riordan and Trump calls me, ‘Hey! Would you like to be my accountant?’ I was like, ‘Well, I just saw your other accounting firm wash their hands and you said nothing more than I can’t trust what you’re telling me. with it.” »

In 2019, Mr. Riordan suspected that the Trump Organization was keeping two sets of accounting records by analyzing data on 40 Wall Street, among other buildings. Compare the revenue, expenses, and occupancy the company is claiming from a bank to refinance the skyscraper mortgage with the figures submitted to the New York tax authorities for the same property.

The analysis indicated that the Trump Organization was submitting two images of the same building, one aimed at lowering taxes, and the other aimed at making it easier to obtain a new mortgage.

However, on January 19, the New York state attorney general specifically accused the Trump Organization of resorting to such a large-scale scheme. And in another court document submitted to Judge Engoron, she notably gave 40 Wall Street as an example to assert that the former president’s company “wrongly and fraudulently valued a number of assets.”

So in 2015, when his company was looking to refinance the mortgage for the 71-story tower, Donald Trump estimated in his financial disclosure statement that the property was worth $735 million. However, one of the lenders concluded at the same time that its value does not exceed 257 million dollars.

These sums gave weight to Kevin Riordan’s theory.

“I haven’t seen his actual rating of 40 Wall Street,” he said in his voice, a hint of regret.

confusing paragraph

However, it is easier to state a theory or make an accusation than to back it up with evidence to support a charge or conviction, especially in the complex and personal business of commercial real estate.

Mazars also provided the Trump Organization with a means to defend itself in its famous February 9 letter.

To justify his decision to disavow his client’s accounts over a period from 30 June 2011 to 30 June 2020, he in particular invokes his own investigation and “information received from internal and external sources”.

Then he adds this seemingly paradoxical sentence: “Although we have not concluded that the various balance sheets, as a whole, contain any material irregularities, under the circumstances we believe that our advice not to rely on these financial documents anymore is justified.”

Donald Trump’s lawyers quickly jumped on this reference to the lack of “significant wrongdoing” to say the attorney general’s investigation had become futile.

The clip itself confused Kevin Riordan, as well as many other experts.

“I can’t explain it,” he said. If, from an accounting point of view, there are no noticeable irregularities, this means that the numbers are completely accurate. But if you tell me I can’t trust the numbers, that means there are noticeable irregularities. I do not understand. It takes my breath away. »

Another source of surprise: Mazar’s decision to part with his client.

“I’ve never seen anything quite like it,” Kevin Riordan said. Then putting himself in the shoes of an investor, he added: “If the borrower came to tell me not to rely on the numbers he gave me, I would be speechless.”

Kevin Riordan and everyone else interested in this story may not be their last surprise.