Fraud

New York is Investigating Trump Family Tax Fraud

JM Ashby
Written by JM Ashby

Citing an extensive trove of thousands of documents including tax returns, the New York Times reported yesterday that Trump derived nearly all of his personal wealth by accepting fraudulent gifts from his father that were sheltered from taxes through various criminal schemes.

As you might have expected, New York state tax authorities are very interested in this information.

From Bloomberg:

“The Tax Department is reviewing the allegations in the New York Times article and is vigorously pursuing all appropriate avenues of investigation,” said James Gazzale, spokesman for Department of Taxation and Finance.

Under New York and federal law, there’s no statute of limitations to pursuing civil tax cases if authorities suspect an intent to evade taxes. Generally, the activities described by the paper would be too old to lead to a criminal inquiry.

While it's highly unlikely anyone in the Trump family could face criminal charges, it's fairly easy to imagine various tax authorities sending them a bill after they finish their investigations. The state of New York has already pursued aggressive cases against the defunct Trump Foundation and they're currently investigating the Trump Organization. And New York probably won't be the only state interested in the Trump family fraud scheme. The Trumps have properties across the country and may have liabilities we don't even know about.

As far as criminal charges are concerned, however, I'm more interested in what the Trump family is doing today, not what they did in the 1990s, and they could be prosecuted if they're breaking the law today.

I find it entirely implausible that Trump and his own children are not using similar schemes that Trump and his father used for over 50 years. A proper investigation of Trump's finances, something we did not get before the 2016 election, would reveal everything.

  • katanahamon

    Yeah, great. Too little, too late. How’s about investigating all the current tax evasion and foreign investment in the Rump family?

  • muselet

    I don’t care all that much about criminal charges. Donald Trump and his family have enough pull to avoid prison time, and possibly enough lawyers—presumably better lawyers than are advising Trump currently (hi, Rudy Giuliani and Jay Sekulow!)—to avoid a conviction.

    Civil action, though, would sting. Imagine the Trumps (and the Kushners) having to have seven- or eight-figure checks cut to cover the penalties and fines; also, what are the odds of at least one of those checks bouncing?

    Trump’s response (a tweet, naturally) was telling:

    The Failing New York Times did something I have never seen done before. They used the concept of “time value of money” in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!

    Trump seems to misunderstand the term time value of money:

    Mr. Trump seems to be referring to The New York Times’s use of inflation-adjusted figures. For instance, the Times alleges his father loaned him at least $60.7 million, which in today’s dollars is the equivalent of $140 million after adjusting for inflation…

    Because inflation changes the value of money over time, it’s standard to adjust for its impact to ensure an apples-to-apples comparison across years. But it’s not the same as the time value of money, which refers to the investment potential of money over time.

    […]

    “‘Time value of money” doesn’t refer to inflation,” wrote Patrick Chovanec, managing director at Silvercrest Asset Management, on Twitter. “It refers to the return I would receive if I stuck my money in some ultra-safe interest-bearing asset (like US Treasuries) for a period of time. That’s the opportunity cost I pay if I do something else with my money instead.”

    Donald Trump seems to have slept through Econ 1, as well as those irritating Business Ethics courses.

    –alopecia