A US prosecutor probing former President Donald Trump’s business practices is focusing on allegedly “fraudulent” valuations of his luxury golf resort in Aberdeenshire.
The inquiry, led by New York Attorney General Letitia James, alleges the Trump Organisation used the “misleading” asset valuations to obtain economic benefits including loans, insurance coverage, and tax deductions.
Officials have been reviewing the 75-year-old’s annual financial statements, tax submissions and other documents in connection with Trump International Golf Club Scotland.
Now, in new filings to the Supreme Court of the State of New York, the Attorney General claims to have uncovered “significant” evidence.
Court documents question value
A 115-page court document states: “The Trump Organization valued Trump Aberdeen at $435.56 million for purposes of Mr Trump’s 2014 financial statement; that figure was more than double the 2013 valuation for the same property.”
The plot of land was bought by the Trump Organisation in 2006 for $12.6 million (£9.2m) and, in the subsequent five years, the firm’s filings stated it had rocketed in value.
In an email obtained by the Attorney General’s office, George Sorial – then-executive vice-president of the Trump Organisation – is quoted as saying: “Although a formal appraisal has not been prepared at this point, after speaking with specialists in the field and having closely watched this development transform itself over the last five years, we are informed that the value for the residential/hotel land parcels could achieve a value in excess of 75 million [British pounds sterling].”
The email had the subject line “Forbes Magazine” leading investigators to conclude that it was used to support valuations of the property in 2012 and 2013.
Ms James claims that the high valuation of the golf course development was based upon 2,500 homes being built at the site – something that Trump had never received planning permission for.
The report says: “The 2014 Statement of Financial Condition reports that the Trump Organization ‘received outline planning permission in December 2008 for … a residential village consisting of 950 holiday homes and 500 single family residences and 36 golf villas.’ This is a total of 1,486 homes. But the supporting data for the 2014 valuation contained a residential parcel valuation based on the development potential of 2,500 homes.”
A Trump executive testified that he could not explain this discrepancy, the report adds.
Resort has yet to make a profit
Mr Trump hailed the Menie course as the best in the world when it opened in 2012, but more than eight years later the resort has yet to make a profit.
Accounts lodged at Companies House show Trump International Golf Club Scotland, which includes the links course, a boutique hotel, bar and restaurant on the Menie Estate, near Aberdeen, suffered pre-tax losses of just over £1.1 million in 2019.
Ms James’ investigation is examining whether documents filed by the Trump Organisation to prove Mr Trump’s wealth are supported in fact.
We are taking legal action to force Donald Trump, Donald Trump, Jr., and Ivanka Trump to comply with our investigation into the Trump Organization’s financial dealings.
No one in this country can pick and choose if and how the law applies to them.
— NY AG James (@NewYorkStateAG) January 19, 2022
She is seeking legal action to force Mr Trump, Donald Trump, Jr and Ivanka Trump to give evidence to her office’s ongoing civil investigation into their financial dealings.
Earlier this month, the Trumps filed a motion to quash these interviews, and the papers filed by the Attorney General oppose that motion.
A spokeswoman for the Trump Organisation said: “The only one misleading the public is Letitia James. She defrauded New Yorkers by basing her entire candidacy on a promise to get Trump at all costs without having seen a shred of evidence and in violation of every conceivable ethical rule.
“Three years later she is now faced with the stark reality that she has no case. So, in response to Trump suing her and filing multiple ethical complaints, and on the heels of her failed governor’s race, she has no choice but to mislead the public yet again by misrepresenting the facts and ignoring her own inflammatory comments. Her allegations are baseless and will be vigorously defended.”