Politics - News Analysis
New Subpoenas Point Directly at One Property in Which Trump Might’ve Committed Tax Fraud
Late Friday evening, The Daily Beast acquired copies of three subpoenas issued in the Donald Trump investigation that reveal new information focused on one specific deal that seems to be at least part of the prosecutor’s focus. Specifically, prosecutors want to know more about what Trump claimed as the value of land he “donated” to the small wealthy towns outside of New York City: Bedford, New Castle, and North Castle. Trump failed in his attempt to put a 212-acre golf club in the area and investigators believe Trump might have inflated the value of the project for tax purposes.
From the report itself:
“The subpoenas, which have not been publicly released until now, have been issued during the past 18 months to three towns just north of New York City.
Investigators asked for a trove of documents related to Donald Trump’s failed attempts to develop a luxury golf course on a 212-acre, forested estate that spans across those three towns and includes several mansions. The requested documents and subsequent court filings show that investigators are examining whether The Trump Organization inflated the value of the property for a charitable tax write-off.”
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One would do well to very broadly interpret that “charitable tax write off” thing as we will see below. The wealthy have a plethora of ways to write off failed investments, many of these failed projects become more valuable as a “charitable donation” than selling the project to a buyer, especially if Trump was allowed to make the appraisal himself, as he likely did.
Obviously, the bigger the value claimed as a charitable gift, the bigger the amount written off as taxes meant to go to the federal government.
It is often called “Tax Fraud,” though we cannot be certain about any charges until they are filed. Additionally, criminal charges may not be filed in this particular deal. The two offices (Manhattan D.A. and NY AG) will have investigated many such deals to establish patterns and overall tax exposure. They may be looking at this deal as part of New York’s ongoing civil suit, especially because of the date of the subpoenas:
“The Daily Beast has learned the state Attorney General’s Office issued a round of subpoenas in November 2019. Investigators demanded copies of ‘zoning, property planning, or other building and construction permissions’ sought by Trump’s firm for the property, Seven Springs LLC.
Here is where the problems come in:
When locals fought Trump’s efforts to develop the property, Trump gave away development rights for $21 million deduction. At it’s heart, the investigators are seeking to examine if the property was worth that much if it couldn’t be developed.
Trump “gave away” what he said was $21 million worth of property. If three people appraised it at $9 million, Trump has a problem, because, at the very least, he will have given himself $12 million back, $12 million to which he wasn’t entitled.
Any work that was done to improve the property along with grossly inflating the value of the property might have made it more valuable to Trump to “give away” than even to sell to a buyer, even if Trump made a profit. If done improperly, he isn’t so much “giving the development rights away” as he is “obtaining the money he already put into it for development” and possibly claiming far more. It is one way to make money off a deal that failed entirely.
The subpoenas are an impressive find and Trump’s actions in the deal may well demonstrate a Trump business pattern that can lead to criminal charges. If the Trump Organization did deals like this repeatedly, it indicates their intentions.
We just published some of the grand jury subpoenas that the New York AG & Manhattan DA are using to examine Trump's upstate chateau.
— 𝙅𝙤𝙨𝙚 𝙋𝙖𝙜𝙡𝙞𝙚𝙧𝙮 (@Jose_Pagliery) May 29, 2021
The more specifics found, the more the pattern is established. The witnesses will testify as to what Trump knew about the actual value, how much Trump knew about potential buyers, and what he wanted out of dumping the project by donating the land. If he told others, “We aren’t going to get this approved. The best thing to do is list the value at what it might have been had we developed it, and donate it to the towns as charity, so we can make a huge tax break off it,” well, then he’s in trouble.
Trump is likely sitting in a small hell in South Florida, knowing that people are leafing through each file.
[email protected] and on Twitter @JasonMiciak