Like Chicago gangsters a century ago prosecuted for tax evasion, the Chicago way may catch up to Trump. As Elliot Ness is purported to have said, “no deals”. Cy Vance and Leticia James continue an untouchable investigation into only one aspect of Biglygate.
Except, as Mother Jones confirmed, the loan wasn’t sold to Trump, it was forgiven by Fortress.
To recap: Trump claims he bought a debt related to his Chicago venture, but neither of the two loans associated with this property appear to have been purchased. The Deutsche Bank loan was refinanced. The Fortress debt, according to sources with knowledge of the transaction, was canceled. And this raises a question: Did Trump create a bogus loan to evade a whopping tax bill on about $48 million of income?
A Manhattan prosecutor has expanded his criminal prosecution into Donald Trump’s business empire to include questions about a mysterious loan tied to Trump’s Chicago tower—the circumstances of which were first reported in detail by Mother Jones in 2019. https://t.co/FX7bgoxGp0
— Mother Jones (@MotherJones) March 9, 2021
On Monday night, CNN reported that the investigation is also looking at the circumstances surrounding a loan that Trump took out in 2006 to help finance the construction of his hotel and condominium tower in downtown Chicago. Trump borrowed more than $600 million from German financial giant Deutsche Bank, and then took a second, smaller loan of $130 million from private equity firm Fortress Capital. When the 2008 financial crisis hit, and it became clear that Trump would be unable to make all of his payments to Deutsche Bank, Trump and the German bank fell into a bitter legal battle. The fight eventually was resolved several years later when Trump paid off part of the loan and then refinanced the rest with a separate division of the German bank that caters specifically to wealthy clients. But the Fortress loan simply seemed to disappear from public records with few clues as to how it was settled.
In turns out that in 2012, Trump resolved his outstanding debt with Fortress by paying them less than half of what they were owed—the amount had ballooned to as much as $150 million. It’s not uncommon for a lender like Fortress to agree to take much less than what they are owed if they believe they have little chance of recovering the full amount, or if going through the legal fight wouldn’t be worth the time, trouble, or expense. Trump never directly addressed the loan in public comments, but in several instances he implied that he hadn’t paid off the loan at a discount. Instead, he suggested that he had bought the loan from Fortress at a discount. While a seemingly small difference, it would have enormous tax implications for Trump.
Few people have been as deeply involved in Donald Trump’s finances as Allen Weisselberg, a trusted figure in Trump’s family business. Legal experts and a source say the prosecutors’ goal is to convince him to cooperate with the probe into Trump’s dealings https://t.co/Y3lZV0bSV7
— Reuters (@Reuters) March 7, 2021