Former President Donald Trump may be paying a “secret third party” through a non-existent $50 million loan, an ethics group claimed.
The issue arose after Barbara Jones, the court-appointed monitor overseeing Trump’s companies, spotted that Trump had taken out a $50 million loan that might not have existed. She then reported it to Judge Arthur Engoron, who had fined Trump $454 million for falsely inflating the value of his assets.
In February, Engoron found Trump, sons Donald Jr. and Eric, and The Trump Organization liable for a scheme in which the value of Trump’s net worth and assets were unlawfully inflated to obtain more favorable business deals. Trump has maintained his innocence.
Trump received a penalty of about $454 million, including interest, and would have had to pay a bond slightly higher than that amount to stave off the state from seizing his assets, including his many real estate holdings, to cover the penalty. An appeals court later ruled that he could pay a lower bond of $175 million.
The government watchdog organization Citizens for Responsibility and Ethics (CREW) sent a letter to the FBI and the Department of Justice asking them to investigate whether Trump falsely reported the $50 million owed to one of his own companies, Chicago Unit Acquisition LLC (“Chicago Loan”), as a liability on all nine public financial disclosure reports he filed with the Federal Election Commission (“FEC”) and the Office of Government Ethics (“OGE”). Trump filed the disclosure reports between 2015 and 2023, even though the loan “appears to have never existed,” according to the CREW letter.
“It is not clear why Mr. Trump would have reported a non-existent loan as a liability owed to one of his own companies,” the letter states. “Some reporting suggests that the deal could be part of a tax-avoidance scheme, known as debt parking, that has been used by taxpayers to purchase debt and then leave it in a separately-owned entity rather than incur tax liability on debt which has been forgiven.”
It suggests that a company forgave more than $100 million debt on a project and Trump may have taken the money from one company and placed it into the Fortress loan to avoid paying tax.
The letter states that “others theorize that the loan may be owed to a secret third party.”
The letter notes that Jones was appointed by Engoron in November 2022 to monitor Trump’s financial statements and financial disclosures after Engoron found that the former president and his co-defendants had a “propensity to engage in persistent fraud by submitting false and misleading Statements of Financial Condition.”
In a status report to Engoron, Jones disclosed that she had “several” discussions with representatives of The Trump Organization and was told there were “no loan agreements that memorialize the [Chicago] loan.”
Initially, Jones was also told that “it was a loan that was believed to be between Donald J. Trump, individually, and Chicago Unit Acquisition for $48 million.” But, in later discussions, she was told by The Trump Organization that “it has determined that this [Chicago] loan never existed” and it “would be removed from any upcoming forms submitted to the Office of Government Ethics,” according to Jones’ status report.
CREW noted that, in response to the monitor’s report, Trump’s lawyers accused Jones of “falsehoods” and “deliberate mischaracterizations,” and denied that she was told that the loan “never existed.”
Newsweek sought email comment from two of Trump’s attorneys on Friday.
“Donald Trump has a long history of lying about his finances, but there’s a big difference between lying about them in the press and lying about them on a government disclosure,” CREW President Noah Bookbinder said in a statement.
Uncommon Knowledge
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