During the ongoing civil fraud trial against former President Donald Trump in New York, it has come to light that Trump’s company, the Trump Organization, no longer produces the comprehensive financial statements central to the lawsuit. The trial, initiated by state Attorney General Letitia James, alleges that Trump and his company manipulated asset and net worth information to deceive lenders and insurers for an extended period.
Contrary to the state’s claims, Trump and his company vehemently deny any wrongdoing, asserting that the financial statements in question were accurate and prepared by reputable accountants.
The trial, which commenced last week, has witnessed testimonies from various current and former Trump Organization executives, along with insights from an expert witness hired by the state to scrutinize the financial statements spanning from 2014 to 2021. These statements encompass details about Trump’s properties, golf courses, licensing deals, and other assets, presenting a narrative that Trump’s net worth soared from $4.5 billion in 2014 to over $10 billion in 2021.
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However, on Monday, Mark Hawthorn, the chief operating officer of the Trump Organization’s hotel arm, dropped a bombshell during his testimony, revealing that the company no longer prepares such comprehensive financial statements. Although Hawthorn clarified that the company still conducts audits and issues reports for specific entities, he underscored the absence of a consolidated financial statement for the entire company. Curiously, he did not provide reasons for discontinuing the statements but emphasized that they are “not required by any lender, currently, or any constituency.”
Hawthorn’s testimony directly challenges the state’s assertion that these financial statements were instrumental in securing loans and insurance policies for Trump’s businesses. The state contends that the statements exaggerated the value of Trump’s assets, including his iconic Trump Tower in New York, Mar-a-Lago resort in Florida, and golf courses in Scotland and Ireland. Furthermore, the state alleges that the statements either omitted or downplayed critical liabilities such as debts, lawsuits, and taxes.
Jeffrey Johnson, the state’s forensic accountant expert, supported these claims last week, stating that he discovered “numerous instances of material misstatements and omissions” in the financial statements. Johnson criticized the statements for not adhering to generally accepted accounting principles and deemed them “not reliable for any purpose.” He also emphasized that the statements had not undergone auditing or review by any independent accountant.
In response, the defense challenged Johnson’s credibility and methodology, arguing that the financial statements were prepared by the reputable accounting firm Mazars USA. They asserted that Mazars followed Trump’s instructions and verified the information with supporting documents.
Amidst these legal skirmishes, the trial, overseen by a judge without a jury, is expected to continue for several weeks. The state seeks a court order to prohibit Trump and his company from making false or misleading statements in the future, along with pursuing unspecified damages and penalties. It’s important to note that this trial operates independently from a criminal investigation by the Manhattan district attorney’s office, which is concurrently examining Trump’s business dealings and tax returns.
