Documents obtained by ProPublica show stark differences in how Donald Trump’s businesses reported some expenses, profits and occupancy figures for two Manhattan buildings, giving a lender different figures than they provided to New York City tax authorities. The discrepancies made the buildings appear more profitable to the lender — and less profitable to the officials who set the buildings’ property tax.
For instance, Trump told the lender that he took in twice as much rent from one building as he reported to tax authorities during the same year, 2017. He also gave conflicting occupancy figures for one of his signature skyscrapers, located at 40 Wall Street.
Lenders like to see a rising occupancy level as a sign of what they call “leasing momentum.” Sure enough, the company told a lender that 40 Wall Street had been 58.9% leased on Dec. 31, 2012, and then rose to 95% a few years later. The company told tax officials the building was 81% rented as of Jan. 5, 2013.
A dozen real estate professionals told ProPublica they saw no clear explanation for multiple inconsistencies in the documents. The discrepancies are “versions of fraud,” said Nancy Wallace, a professor of finance and real estate at the Haas School of Business at the University of California-Berkeley. “This kind of stuff is not OK.”
New York City’s property tax forms state that the person signing them “affirms the truth of the statements made” and that “false filings are subject to all applicable civil and criminal penalties.”
The punishments for lying to tax officials, or to lenders, can be significant, ranging from fines to criminal fraud charges. Two former Trump associates, Michael Cohen and Paul Manafort, are serving prison time for offenses that include falsifying tax and bank records, some of them related to real estate.
“Certainly, if I were sitting in a prosecutor’s office, I would want to ask a lot more questions,” said Anne Milgram, a former attorney general for New Jersey who is now a professor at New York University School of Law.
Trump has previously been accused of manipulating numbers on his tax and loan documents, including by his former lawyer, Cohen. But Trump’s business is notoriously opaque, with records rarely surfacing, and up till now there’s been little documentary evidence supporting those claims.
That’s one reason that multiple governmental entities, including two congressional committees and the office of the Manhattan district attorney, have subpoenaed Donald Trump’s tax returns. Trump has resisted, taking his battles to federal courts in Washington and New York. And so the question of whether different parts of the government can see the president’s financial information is now playing out in two appeals courts and seems destined to make it to the U.S. Supreme Court. Add to that a Washington Post account of an IRS whistleblower claiming political interference in the handling of the president’s audit, and the result is what amounts to frenetic interest in one person’s tax returns.
ProPublica obtained the property tax documents using New York’s Freedom of Information Law. The documents were public because Trump appealed his property tax bill for the buildings every year for nine years in a row, the extent of the available records. We compared the tax records with loan records that became public when Trump’s lender, Ladder Capital, sold the debt on his properties as part of mortgage-backed securities.
ProPublica reviewed records for four properties: 40 Wall Street, the Trump International Hotel and Tower, 1290 Avenue of the Americas and Trump Tower. Discrepancies involving two of them — 40 Wall Street and the Trump International Hotel and Tower — stood out.
Tax fraud, Al Capone, yadda yadda.
Hey, it worked.