Malacandra.me

Your money “is now laundered” by @BloggersRUs

Your money "is now laundered"

by Tom Sullivan

The massive New York Times report on Tuesday detailed how the Trump family transferred Fred Trump's real estate empire to his children without paying inheritance or gift taxes. Among the 295 revenue streams the Times found in its year-long investigation were a host of gifts disguised as loans, loans the Times believes The Donald never repaid.

A scene from Lethal Weapon 2 kept playing in my head while reading the Times account. Leo Getz (Joe Pesci) explains to officers Riggs (Mel Gibson) and Murtaugh (Danny Glover) how he helps criminals launder money:

Fred Trump repeatedly bailed out his son Donald with "a spigot of loans" he never paid back, the Times found. This particular deal jumped off the page as something Leo Getz might do:

By 1987, for example, Donald Trump’s loan debt to his father had grown to at least $11 million. Yet canceling the debt would have required Donald Trump to pay millions in taxes on the amount forgiven. Father and son found another solution, one never before disclosed, that appears to constitute both an unreported multimillion-dollar gift and a potentially illegal tax write-off.

In December 1987, records show, Fred Trump bought a 7.5 percent stake in Trump Palace, a 55-story condominium building his son was erecting on the Upper East Side of Manhattan. Most, if not all, of his investment, which totaled $15.5 million, was made by exchanging his son’s unpaid debts for Trump Palace shares, records show.

Four years later, in December 1991, Fred Trump sold his entire stake in Trump Palace for just $10,000, his tax returns and financial statements reveal. Those documents do not identify who bought his stake. But other records indicate that he sold it back to his son.

No doubt Fred took a tax deduction for the loss. Leo Getz would approve.

A less conspicuous Trump family partner is Judge Maryanne Trump Barry of the United States Court of Appeals for the Third Circuit (inactive), the sitting president's sister. (Judge Brett Kavanaugh holds a similar position on the District of Columbia Circuit.) A filing from Barry's 1999 Senate confirmation provided a vital clue in the Times expose, CNN reports:

According to the Times, one of their key findings was a financial disclosure form from Barry's Senate confirmation proceedings in 1999 to be a federal appellate judge. This financial form was not redacted, and Times reporter Susanne Craig, one of the three reporters who broke the story, noticed an oddity in the filing — a $1 million contribution from a Trump family-owned company called All County Building Supply & Maintenance.
The Times reports All County was "a middleman entity created by President Trump and his siblings" to allow transfer of Fred Trump’s cash to his children while evading a 55 percent gift tax:
... All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants.
“In all of the books, all of the profiles, all of the newspaper stories, we haven’t found one mention of Donald Trump and All County Building Supply,” reporter David Barstow said. But wandering down that "one little alleyway" in Barry's Senate filing revealed how little was known about the Trumps' financial dealings. As an executor of her father's estate, what liability Maryanne Trump Barry may have should investigators establish tax fraud is unclear:
"She signed the estate tax return. She is required to submit accurate information to be truthful. She was a lawyer at the time," professor Lee-Ford Tritt, a law professor and the director of the Center for Estate Planning at the University of Florida Law School, told CNN on Wednesday. Barry also was a sitting federal judge at the time her late father's tax returns were filed.

Though the statute of limitations for pursuing possible criminal action against the Trumps for the alleged schemes exposed in the report has long passed, there could be civil penalties if tax fraud is found to have occurred.

The New York State Tax Department is reviewing allegations in the Times report.

With Fred Trump gone and his treasury disbursed, Donald has found other benefactors to back his money-losing, Trump-branded ventures. He has yet to face a full accounting — pun intended.

* * * * * * * * *

For The Win 2018 is ready for download. Request a copy of my county-level election mechanics primer at tom.bluecentury at gmail.