Monitor's Report In Fraud Case Contains "Factual Inaccuracies", Is "Disingenuous" Says Trump Attorney

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by Tyler Durden
Wednesday, Jan 31, 2024 - 03:05 AM

Authored by Catherine Yang via The Epoch Times (emphasis ours),

Attorneys for former President Donald Trump on Monday responded to a recent report issued by a court-appointed independent monitor regarding Trump Organization finances, disputing former judge Barbara Jones’s characterization of the financial statements as incomplete and inconsistent.

Former U.S. President Donald Trump and his lawyers Christopher Kise and Alina Habba attend the closing arguments in the Trump Organization civil fraud trial at New York State Supreme Court on January 11, 2024 in New York City. (Seth Wenig-Pool/Getty Images)

Ms. Jones recommended that third party monitoring of Trump Organization continue, and concluded that “misstatements and errors may continue to occur,” which defense attorneys said was an effort to continue the monitor’s “exorbitant” fees paid by Trump Organization. Ms. Jones has been paid $2.6 million in her 14-month period as an independent monitor on the case.

Ms. Jones’s team has received Trump Organization financial disclosures to third parties, including lenders and insurers; agreements and documents related to transactions; documents related to Trump Organization entities and dissolutions; bank statements; and documents provided to tax authorities.

Attorney Clifford Robert claimed that the Jan. 26 report, submitted at the request of the court, was also meant to “fill the gaping hole in the Attorney General’s case” and was issued “in bad faith.”

The January 26 Report also contains numerous factual inaccuracies (casting serious doubt on the Monitor’s competency), fails to reference governing standards of any kind, and is otherwise misleading and disingenuous,” the letter reads.

The report pointed out errors on seven disclosure items, three inconsistencies, and five clerical errors, which the defense argues are immaterial amid the thousands of pages of financial data related to the 400 entities Ms. Jones is monitoring.

The Monitor was appointed to report any financial reporting misconduct, suspicious activity or any suspected or actual fraudulent activity,“ the letter reads. ”The Monitor was not appointed to identify math errors or otherwise sensationalize minor and inconsequential accounting discrepancies scattered throughout the financial reports of the over 400 companies comprising the Defendants’ global enterprise.”

Mr. Robert pointed out that the biggest discrepancy Ms. Jones identified was a difference of $1 million in an “internal trial balance presentation,” and had no actual impact. Mentions of delays in implementing transactions had provided “no evidence of any inappropriate or untoward conduct,” he added, claiming this representation as an effort to “malign such disclosures.”

Mr. Robert noted that the words “misconduct,” “suspicious activity,” “suspected fraud,” or “actual fraud” do not appear in Ms. Jones’s report at all, and argued the errors she cites have been blown out of proportion.

“Moreover, as the Reports and the January 26 Report make clear, every item identified has been resolved to the full satisfaction of the Monitor,” he added. “She has not and cannot point to even a single instance of controversy or complaint between any of the Defendants and outside third parties.”

He pointed to five reports Ms. Jones previously submitted, in which she wrote that Trump Organization defendants were repeatedly “complying with” and “continuing to comply with” court orders and the third-party monitoring as a pattern of ongoing cooperation and good faith.

“The Monitor now twists immaterial accounting items into a narrative favoring her continued appointment, and thereby the continued receipt of millions of dollars in excessive fees,” Mr. Robert argued.

Mr. Robert argued there is no purpose in continuing the monitoring of Trump Organization going forward.

Ruling, Penalties Imminent

President Trump and other Trump Organization executives were sued by New York Attorney General Letitia James in September 2022 for fraud in the organization’s financial statements from 2011 to 2021.

New York Supreme Court Justice Arthur Engoron has already found the defendants liable for fraud, and is expected to issue an order this week that will detail the penalties President Trump will have to pay.

The attorney general is seeking $370 million in disgorgement, which is the difference in what the state claims Trump Organization would have paid in interest and fees if the financial statement totals had been lower, plus several other penalties.

The judge had already ordered the cancellation of President Trump’s business certificates and the dissolution of Trump Organization companies. The ambiguous order had been put on pause by an appeals court after defense attorneys argued it would upend the livelihoods of hundreds of employees overnight. It was not clear whether an independent receiver would then sell off Trump Organization properties under bankruptcy procedures, and the judge had said he would revisit the details.

The attorney general is also seeking to bar President Trump from doing business in New York or with New York-based financial organizations for life, as well as five-year bans for his sons Eric Trump and Donald Trump Jr., who are executive vice presidents at Trump Organization.