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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsTRUMP Core Business Model: FRAUD
https://www.newyorker.com/news/swamp-chronicles/is-fraud-part-of-the-trump-organizations-business-modelRather famously, Trump overinvested in luxury housing, spent too much on his casinos, and completely blew his brief foray into a regional airline. Far worse, Trump did the very opposite of insuring a long record of fiscal prudence that would allow him to borrow money cheaply. Despite the companys mixed record, it has survived and grown. Its doing something well, so what is it?
This month, two incredible investigative stories have given us an opportunity to lift the hood of the Trump Organization, look inside, and begin to understand what the business of this unusual company actually is. It is not a happy picture. The Times published a remarkable report, on October 2nd, that showed that much of the profit the Trump Organization made came not from successful real-estate investment but from defrauding state and federal governments through tax fraud. This week, ProPublica and WNYC co-published a stunning story and a Trump, Inc. podcast that can be seen as the international companion to the Times piece. They show that many of the Trump Organizations international deals also bore the hallmarks of financial fraud, including money laundering, deceptive borrowing, outright lying to investors, and other potential crimes.
Trump Inc. / Pump & Trump: http://www.wnycstudios.org/story/trump-inc-pump-trump-panama/
The reportersHeather Vogell and Peter Elkind of ProPublica, and Andrea Bernstein and Meg Cramer of WNYCidentified a similar pattern that occurred in deals around the world. The basic scheme worked like this: some local developer in Panama, the Dominican Republic, Florida, Canada, or some other location pays Trump, up front, for the use of his name and agrees to pay him a cut of every salenot only of units but of things like hotel-room minibar items or, even, bathrobes. These projects typically require sixty per cent or more of units to be sold before construction gets under way. The same set of problems occurred in multiple projects. Many of the early units would be sold to shadow buyershidden behind shell companies. Donald Trump or, often, Ivanka Trump would deceive future investors by telling them that a much higher percentage of units had been sold than was factual. More investors pour money in, getting enough money into the project, often, to begin construction. Eventually, the project fails and goes bankrupt. Many of those investors lose all of their money. But the Trumps do not. They got paid up front and are paid continuously throughout until the day the project collapses. They are paid for their name and for overseeing the project, and, if the building is opened, the Trumps manage the property day to day, in exchange for hefty fees.
In the Panama City project, Trump licensed his name for an initial fee of a million dollars, ProPublica and WNYC reported. Trump was also paid a portion of apartment-unit sales and minibar fees. Whether the project succeeded or failed, he was paid as well. A final accounting is startling: the project went bankrupt, had a fifty-per-cent default rate, and the Trump Organization was expelled from managing the hotel, yet Donald Trump walked away with between thirty million and fifty-five million dollars.
The same pattern emerged in other projects. In Fort Lauderdale, Trump announced that a hotel-condominium project was pretty much sold out in April, 2006, according to a broker who attended the presentation. In reality, sixty-two per cent of units were sold as of July, 2006, according to bank records that emerged in a court case. The project entered foreclosure, and Trumps name was removed before construction was completed. In Toronto, Ivanka referred to the property as virtually sold out in a 2009 interview. In fact, 24.8 per cent of units had sold, according to a 2016 bankruptcy filing by the developers. The project was built but went bankrupt, and Trumps name was removed from it. In New York, Ivanka told reporters in 2008 that sixty per cent of units had sold in the Trump SoHo. A Trump partners affidavit revealed that only fifteen per cent had been sold at the time. The building was constructed, but the project went bankrupt, and Trumps name was removed from it.
Ohiogal
(32,026 posts)But his staunch supporters care not one whit, as long as he is in power to stomp on the same people they hate (people of color, the poor, feminists, and Liberals). And every Republican is okay with this.
Laura PourMeADrink
(42,770 posts)Each specific project and define who is actually constructing the building and who is answering to the bank for interim financing. If that party lies about pre-sale numbers then they have defrauded the bank. The bank would also likely require sales contracts as proof.
The Trumps, lying to potential investors, because they had a future interest in the project's success, is probably not illegal? But strikes me as just slick, snake oil salesmen tactics.
Obviously, the Trump name and backing had a tremendous amount of value for other parties to enter into agreements that appear to advantage the Trump's to such a high degree.
Sounds like there was someone in the trump organization that was deviously brilliant (at one time). To squeeze every drop of value out of the Trump name and to construct deals that protected them and produced the most possible income.
brush
(53,801 posts)Laura PourMeADrink
(42,770 posts)Investors/buyers filed suits against them. If they bought a property based on the false premise that it was going to be close to fully occupied, and it eventually was under-occupied and went under.
Perhaps that's the "more" to this story. And the Trump's out-lawyered and counter sued so much that people gave up. Their MO.
That said, seems like their ploys could only work for so long. Word should have gotten out to be super cautious when dealing with them.
brush
(53,801 posts)Occupants all over are voting to take the trump name off buildings and we may yet see suits as this fraud news filters out.
unitedwethrive
(1,997 posts)The only way the GOP gets power, is by lying, cheating, and stealing.