Donald Trump Has Never Explained a Mysterious $50 Million Loan. Is It Evidence of Tax Fraud?
Donald Trump Has Never Explained a Mysterious $50 Million Loan. Is It Evidence of Tax Fraud?
https://www.motherjones.com/politics/2019/09/donald-trump-has-never-explained-a-mysterious-50-million-chicago-unit-acquisition-loan-is-it-evidence-of-tax-fraud/
Donald Trump’s massive debts—he owes hundreds of millions of dollars—are the subject of continuous congressional and journalistic scrutiny. But for years, one Trump loan has been particularly mystifying: a debt of more than $50 million that Trump claims he owes to one of his own companies. According to tax and financial experts, the loan, which Trump has never fully explained, might be part of a controversial tax avoidance scheme known as debt parking. Yet a Mother Jones investigation has uncovered information that raises questions about the very existence of this loan, presenting the possibility that this debt was concocted as a ploy to evade income taxes—a move that could constitute tax fraud.
Here’s what is publicly known about this mystery debt: On the personal financial disclosure forms that Trump must file each year as president, he has divulged that he owes “over $50 million” to a company called Chicago Unit Acquisition LLC. The forms note that this entity is fully owned by Trump. In other words, Trump owes a large chunk of money to a company he controls.
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To recap: Trump claims he bought a debt related to his Chicago venture, but neither of the two loans associated with this property appear to have been purchased. The Deutsche Bank loan was refinanced. The Fortress debt, according to sources with knowledge of the transaction, was canceled. And this raises a question: Did Trump create a bogus loan to evade a whopping tax bill on about $48 million of income?
Several legal and real estate finance experts say it’s possible to fabricate a loan. Doing so would be as easy as creating some paperwork and declaring the debt on your tax returns, though such a scheme would also violate federal tax law.
“When you see it, if you lay all this out, it’s pretty brazen,” says Adam Levitin, a law professor specializing in commercial real estate finance at Georgetown University. “If he didn’t actually buy the loan, this is just garden-variety fraud.”
Most loans are documented in public records, but Mother Jones could locate no documentation of a loan owned by Chicago Unit Acquisition. The Cook County Recorder of Deeds has records concerning the original Deutsche Bank loan for the Chicago project; the Deutsche Bank loan that replaced it; and the Fortress loan. But the Recorder of Deeds has no filings related to Chicago Unit Acquisition.
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