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Post by zima on Feb 15, 2022 14:29:52 GMT
I'm shocked!! Shocked I say! "Trump's longtime accounting firm recants a decade of his financial statements
The accounting firm that has for years prepared annual financial statements for Donald Trump and his businesses is cutting ties with his company and says a decade's worth of the reports "should no longer be relied upon."
The firm, Mazars USA, wrote to the Trump Organization's chief legal officer Alan Garten on February 9 to inform him of its decision. The letter was included as an exhibit in a filing Monday by the New York attorney general's office, which is seeking depositions from Trump and two of his children, Donald Jr. and Ivanka Trump, as part of an ongoing fraud probe.
In the letter, a Mazars executive cites revelations from the attorney general's investigation as among the reasons the accounting firm is no longer standing by its financial statements for the years ending June 30, 2011 to June 30, 2020, and dropping the Trump Organization."
Accounting Firm Cuts Ties With Trump and Retracts Financial Statements
The firm, Mazars USA, said in a letter that it could no longer stand behind the annual statements, which are central to an investigation by the New York attorney general.
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Post by zima on Feb 15, 2022 14:35:47 GMT
ps - even better I've not been able to find any info on which company (IF ANY) AUDITED those statements.
How tf did the Trump org get loans from Deutsche after SEVERAL bankruptcies w/unaudited financial statements??!?!?
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Post by hop2 on Feb 15, 2022 16:19:56 GMT
ps - even better I've not been able to find any info on which company (IF ANY) AUDITED those statements. How tf did the Trump org get loans from Deutsche after SEVERAL bankruptcies w/unaudited financial statements??!?!? They ‘loaned’ him money AFTER he defaulted on a 600 million loan from their commercial division. Follow the money - or should I say money laundering. He is in someone’s pocket. According to his son Eric it was Russian oligarchs. But no one cares. Yeah IOKIYAR
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maryannscraps
Pearl Clutcher
Posts: 4,791
Aug 28, 2017 12:51:28 GMT
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Post by maryannscraps on Feb 15, 2022 16:32:13 GMT
I'm not an accountant, but I understand that the accounting firm prepared taxes based on the Trump organization's documentation. They didn't do audits. I'm sure there's a technical term for that.
I'd be surprised if they didn't suspect the documentation was inaccurate, but they weren't signing off on the backup documentation accuracy, just that they were using it to prepare the taxes.
I'm surprised there weren't any audits done, either. Every bank that lent him money knew that perfectly well.
And Mazars came right out and said they're working with NY AG Letitia James. Ruh roh.
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Post by Darcy Collins on Feb 15, 2022 17:51:23 GMT
Banks do not require audited financial statements for loans - that is not a thing - publicly traded companies need to be audited. There are millions of companies that have never been audited and receive loans every day. The IRS has audited him several times - one lasted forever, I'm more surprised the IRS didn't catch something.
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Post by ameslou on Feb 15, 2022 17:59:22 GMT
I'm not an accountant, but I understand that the accounting firm prepared taxes based on the Trump organization's documentation. They didn't do audits. I'm sure there's a technical term for that. I'd be surprised if they didn't suspect the documentation was inaccurate, but they weren't signing off on the backup documentation accuracy, just that they were using it to prepare the taxes. I'm surprised there weren't any audits done, either. Every bank that lent him money knew that perfectly well. And Mazars came right out and said they're working with NY AG Letitia James. Ruh roh. Looks to me like it was a “compilation” rather than an audit. I don’t know why banks loan on this kind of engagement - the compilation report says that it doesn’t provide any assurance that the financials are correct. (That’s the AICPA language for a standard compilation ).
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maryannscraps
Pearl Clutcher
Posts: 4,791
Aug 28, 2017 12:51:28 GMT
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Post by maryannscraps on Feb 15, 2022 18:18:43 GMT
I'm not an accountant, but I understand that the accounting firm prepared taxes based on the Trump organization's documentation. They didn't do audits. I'm sure there's a technical term for that. I'd be surprised if they didn't suspect the documentation was inaccurate, but they weren't signing off on the backup documentation accuracy, just that they were using it to prepare the taxes. I'm surprised there weren't any audits done, either. Every bank that lent him money knew that perfectly well. And Mazars came right out and said they're working with NY AG Letitia James. Ruh roh. Looks to me like it was a “compilation” rather than an audit. I don’t know why banks loan on this kind of engagement - the compilation report says that it doesn’t provide any assurance that the financials are correct. (That’s the AICPA language for a standard compilation ). Thank you! I knew a pea had to be an accountant.
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Post by busy on Feb 15, 2022 18:20:58 GMT
I'm not an accountant, but I understand that the accounting firm prepared taxes based on the Trump organization's documentation. They didn't do audits. I'm sure there's a technical term for that. I'd be surprised if they didn't suspect the documentation was inaccurate, but they weren't signing off on the backup documentation accuracy, just that they were using it to prepare the taxes. I'm surprised there weren't any audits done, either. Every bank that lent him money knew that perfectly well. And Mazars came right out and said they're working with NY AG Letitia James. Ruh roh. Looks to me like it was a “compilation” rather than an audit. I don’t know why banks loan on this kind of engagement - the compilation report says that it doesn’t provide any assurance that the financials are correct. (That’s the AICPA language for a standard compilation ). Because banking is competitive. And the more requirements they put on the loans, the more likely they are to lose the loan and the entire banking relationship to another bank. Bankers aren’t idiots… they look at years of financial statements and tax returns. If they discover discrepancies, they probe them. If a company is lying on their tax returns - which generally aren’t internally prepared, god knows what else they’re doing.
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Post by papersilly on Feb 15, 2022 19:22:10 GMT
no doubt the Mazars firm doesn't want to get tangled in any future charges or claims filed against the Trump group. they are cutting ties and maybe even turning states witness against the Trumps. who knows. but now it's time for the Mazars to tuck tail and run from the Trumps. they have their other clients and firm reputation to consider. they are clearly in damage control now.
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Post by zima on Feb 15, 2022 19:36:29 GMT
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garcia5050
Pearl Clutcher
Posts: 2,770
Location: So. Calif.
Jun 25, 2014 23:22:29 GMT
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Post by garcia5050 on Feb 15, 2022 19:45:52 GMT
For people with money, regular rules don’t apply. You can get a loan on ‘unverifiable income/assets’ though the bank could put stipulation, like additional insurance that protects the lender, or a higher interest rate. It happens all the time. Banks take a chance when they do this.
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Post by vspindler on Feb 15, 2022 19:52:17 GMT
I have been reading about this excitedly, partly because I don’t see real info about my profession in the news much lol. It does sound like they are what are considered compiled financial statements, where the accountant does not do any sort of inquiry or provide any assurance that the statements. Basically they just take the information provided and put it in the form of financial statements in accordance with generally accepted accounting standards. A financial statement review involves some testing but it is much less in scope than an audit. A financial statement audit is different than an IRS or other tax audit. The fact that the accountant is no longer associating themselves with the financials and recommending that they “no longer be relied upon” is kind of a big deal.
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Post by sleepingbooty on Feb 15, 2022 20:16:37 GMT
Me, blissfully unaware of the US financial system and its checks, still trying to read this thread and the articles posted:
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Post by zima on Feb 15, 2022 20:27:24 GMT
I have been reading about this excitedly, partly because I don’t see real info about my profession in the news much lol. Yes, one of the articles I saw described the difference between preparation, compilation, review and audit. The Mazars work sounds like it was preparation and/or compilation over the years.
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Post by bc2ca on Feb 15, 2022 20:32:45 GMT
The IRS has audited him several times - one lasted forever, I'm more surprised the IRS didn't catch something.
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Post by hop2 on Feb 15, 2022 22:28:08 GMT
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Post by vspindler on Feb 15, 2022 23:18:09 GMT
The IRS has audited him several times - one lasted forever, I'm more surprised the IRS didn't catch something. The IRS would not necessarily be looking at the same information as is included in the financial statements. For one thing, financial records are reported differently under accounting standards than IRS regulations (often referred to as “book” vs “tax”). An IRS audit may look at a specific item within the return that they want proof of, such as particular income items or expenses. Rarely are they a comprehensive look at an entire return. Financial audits are looking to determine if the financial statements are fairly presented and involve sampling and tracing individual transactions, confirming balances outside the company with vendors, banks or customers, along with analytical procedures attempt to allow the accountant the provide assurance to users of the financial statements (banks, oversight boards, government agencies, etc) that the financials are presented “fairly”, that is in accordance with accounting standards.
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Post by Merge on Feb 15, 2022 23:21:34 GMT
Me, blissfully unaware of the US financial system and its checks, still trying to read this thread and the articles posted: Girl, I live in the US and remain blissfully unaware of almost anything to do with finance here. Please pass the snacks.
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Post by aj2hall on Feb 15, 2022 23:49:55 GMT
I read that and looked at the date -2019 and wondered what was taking so long. Not surprisingly, Trump delayed and fought the investigation in court fortune.com/2021/05/17/donald-trump-house-democrats-deutsche-bank-2019-subpoenas-financial-records/Also this www.nytimes.com/2021/02/03/business/rosemary-vrablic-trump-kushner-deutsche.html Former President Donald J. Trump’s longtime banker at Deutsche Bank was pushed out of her job in December following an internal investigation that concluded that she did business with a client without properly disclosing it, according to regulatory records that were made public on Wednesday.
Deutsche Bank’s review found that Rosemary Vrablic, a senior private banker and managing director in its wealth management business in New York, “engaged in undisclosed activities related to a real estate investment,” including buying a property “from a client-managed entity,” the bank said in records filed with the Financial Industry Regulatory Authority.
The records said Ms. Vrablic, who left the bank in December, was “permitted to resign.”
Deutsche Bank’s internal review concerned a 2013 real estate transaction between Ms. Vrablic and a company, Bergel 715 Associates. Jared Kushner, Mr. Trump’s son-in-law and senior White House adviser, held at least a small ownership stake in Bergel 715, according to a financial disclosure report he filed with the government last summer.
The bank’s investigation began last year after The New York Times reported that Ms. Vrablic and two of her colleagues had bought an apartment in a Park Avenue building for about $1.5 million.
At the time of the apartment purchase, Mr. Trump and Mr. Kushner had already borrowed nearly $200 million from Ms. Vrablic’s division at Deutsche Bank, and they would soon come back looking for hundreds of millions of dollars more.
Daily business updates The latest coverage of business, markets and the economy, sent by email each weekday. Get it sent to your inbox. It isn’t clear from the regulatory filing whether Deutsche Bank was concerned with Mr. Kushner’s connection to the transaction. The reference to “a client-managed entity” suggests that one of the managers of Bergel 715 Associates — in other words, not Mr. Kushner — was also a client of Ms. Vrablic’s.
Banks typically restrict their employees from doing side business with their clients because of the potential for it to create conflicts between the employees’ personal interests and those of the bank.
BlockFi, a crypto firm, reaches a $100 million settlement for failing to register loan products. Microsoft tells workers to prepare to return to the office. Texas sues Facebook’s parent, saying it collected facial recognition data without consent. The records filed with the Financial Industry Regulatory Authority also faulted Ms. Vrablic for “the formation of an unapproved outside entity to hold the investment.”
Ms. Vrablic’s partners on the 2013 transaction were Dominic Scalzi, a banker who reported to Ms. Vrablic, as well as Mr. Scalzi’s nephew, who at the time also worked at Deutsche Bank, according to public records. Mr. Scalzi resigned from Deutsche Bank along with Ms. Vrablic in December; his nephew had previously left.
In a separate regulatory filing, Deutsche Bank included an identical disclosure about the circumstances of Mr. Scalzi’s departure.
Ms. Vrablic’s lawyer declined to comment. Mr. Scalzi’s lawyer didn’t respond to a request for comment.
In the years before Mr. Trump ran for president, Ms. Vrablic was one of his most important financial partners.
At a time when he was largely frozen out of the mainstream banking system because of his history of defaults — including on a large loan from Deutsche Bank — Ms. Vrablic persuaded the bank’s executives to give Mr. Trump another chance. From 2012 through 2015, the bank lent him about $340 million for his Florida golf club, his Chicago skyscraper and his luxury hotel in Washington.
By the time Mr. Trump was sworn in as president, with Ms. Vrablic a V.I.P. guest at his inauguration, Deutsche Bank was by far his biggest creditor.
Mr. Trump owes about $330 million to Deutsche Bank, which is his largest lender. Those debts are scheduled to come due in 2023 and 2024. Mr. Trump has personally guaranteed those loans, which meant that if he were to default, the bank would have recourse to pursue his personal assets.
Deutsche Bank executives late last year concluded that they would not do business with Mr. Trump or his company in the future, a person familiar with the matter previously said.
I imagine the bank regrets ever doing business with Trump.
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Post by Darcy Collins on Feb 15, 2022 23:59:23 GMT
The IRS would not necessarily be looking at the same information as is included in the financial statements. For one thing, financial records are reported differently under accounting standards than IRS regulations (often referred to as “book” vs “tax”). An IRS audit may look at a specific item within the return that they want proof of, such as particular income items or expenses. Rarely are they a comprehensive look at an entire return. Financial audits are looking to determine if the financial statements are fairly presented and involve sampling and tracing individual transactions, confirming balances outside the company with vendors, banks or customers, along with analytical procedures attempt to allow the accountant the provide assurance to users of the financial statements (banks, oversight boards, government agencies, etc) that the financials are presented “fairly”, that is in accordance with accounting standards. They certainly aren't looking for financial statements and agree that it's a very different process, but in this case it was a 10 YEAR audit regarding a $70 million refund. In THIS case I would imagine the IRS should have found something even though in general their audits are not comprehensive.
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Post by librarylady on Feb 16, 2022 2:28:28 GMT
Sometimes bankers get caught up in the prestige of rubbing elbows with the rich and famous. It is possible anything that looked funny was ignored because it was DT.
Years ago some couple with courage and balls took banks in Texas to the cleaners because they just bluffed their way into getting huge loans. The couple had nothing but claimed that the wife was related to the family that had the first gusher oil well in Texas and "as soon as the paper work is finished I will inherit millions of dollars. In the meantime, please loan me the money to purchase this huge ranch." Bank #1 declined, but they went to bank #2 and said, "Bank #1 wants to charge us x% interest, can you do better?" So bank #2 loaned it at a low rate. Then, with lots of nerve, the couple hosted huge parties and invited all the rich and famous and earned a reputation among the people with money. They were able to run up tabs with food and beverage companies, as well as the companies would would supply tents, chair, music etc. After about 10 years of this, it all crashed. I think they are spending some time in prison, but don't remember. --I tell the story to illustrate how often things are done because of reputation, not what is on the ledger page.
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Post by zima on Feb 16, 2022 2:33:20 GMT
Sometimes bankers get caught up in the prestige of rubbing elbows with the rich and famous. See also: Elizabeth Holmes.
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Post by lisae on Feb 16, 2022 2:35:06 GMT
Regarding banks loaning Trump money... Any bank that is stupid enough to loan money to a man who has declared bankruptcy 4 times deserves to lose money on any deal.
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Dalai Mama
Drama Llama
La Pea Boheme
Posts: 6,985
Jun 26, 2014 0:31:31 GMT
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Post by Dalai Mama on Feb 16, 2022 5:36:38 GMT
I have been reading about this excitedly, partly because I don’t see real info about my profession in the news much lol. It does sound like they are what are considered compiled financial statements, where the accountant does not do any sort of inquiry or provide any assurance that the statements. Basically they just take the information provided and put it in the form of financial statements in accordance with generally accepted accounting standards. A financial statement review involves some testing but it is much less in scope than an audit. A financial statement audit is different than an IRS or other tax audit. The fact that the accountant is no longer associating themselves with the financials and recommending that they “no longer be relied upon” is kind of a big deal. I love a good accounting discussion! In Canada, we don’t even rely on GAAP as a standard for compilations - as long as the numbers aren’t misleading, we’re good to go. Does your compilation report not already say that the numbers ‘may not be appropriate for the intended use’ (ie, they shouldn’t be relied on)?
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Post by zima on Feb 16, 2022 14:12:45 GMT
"According to government disclosure forms Trump signed during his last week in office a year ago, Trump is on the hook for more than $130 million to Deutsche Bank that’s due starting in 2023. His lifeline there is seemingly gone now that his long-time banker, Rosemary Vrablic, abruptly resigned amid allegations of shady deals with Trump’s son-in-law, Jared Kushner. Meanwhile, those disclosure forms show that Trump owes another $110 million to the real estate investment trust Ladder Capital Finance that’s due starting this year—although Trump continues to have a family friend at the firm widely believed to be his loyal ally in the form of director Jack Weisselberg, son of the Trump Organization’s indicted chief financial officer. But even if these big lenders don’t want to call back their loans, government-regulated banks will still be under pressure to independently investigate Trump’s real financial health, out of fear that they’ll run afoul of responsible banking laws. “This is going to be incredibly troubling and at the same time. You’re going to have bank regulators looking… at these loans and determining that there are these questions being raised about the solvency of the borrower,” Solomon said."... “This explodes the national security risk by a factor of 10, because now he's going to be desperate for new loans. Legitimate banks are not going to touch him. So it expands the universe of shady characters who could offer him loans in return for favors that might include disclosing U.S. national security secrets,” said Joseph Cirincione, a fellow at a think-tank, the Quincy Institute for Responsible Statecraft." www.thedailybeast.com/donald-trumps-inner-circle-freaks-that-his-tax-firm-screwed-him
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lizacreates
Pearl Clutcher
Posts: 3,856
Aug 29, 2015 2:39:19 GMT
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Post by lizacreates on Feb 16, 2022 17:38:53 GMT
It’s customary to have a material adverse change clause in loan agreements with companies. Additionally, all representations and warranties made by the borrower at the time of the agreement must be true in all material respects. This or some variation of this wording is common.
If there’s an event (in this case, Mazars disclaiming validity of ten years of financial statements) that materially and negatively affects the ability of the borrower to repay or refinance, or adversely affects the company’s value, a bank can do any number of things—declare a default, cease funding immediately, call the loan. (A misrepresentation of financial condition at the time of the loan is commonly considered a default in an agreement.)
If some of these loans are maturing soon then he’s having to find refinancing. Maybe there’d still be a lender somewhere willing to take the risk but it’s likely at extortionate interest rates. If he cannot refinance, then he’ll lose some properties because those have been used as collateral.
In any event, this is a big deal for someone who owes over half a billion.
ETA: Kudos to Letitia James who’s not letting the grass grow under her feet.
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Post by busy on Feb 16, 2022 17:46:07 GMT
Sometimes bankers get caught up in the prestige of rubbing elbows with the rich and famous. See also: Elizabeth Holmes. That was venture capital/private equity, private investments, and the like. I do not believe any traditional financial institutions made loans to Theranos.
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Post by mollycoddle on Feb 16, 2022 17:50:21 GMT
I’m just gonna leave this here. I’ll see myself out.
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amom23
Drama Llama
Posts: 5,409
Jun 27, 2014 12:39:18 GMT
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Post by amom23 on Feb 16, 2022 18:51:05 GMT
Where are all of Trump's 2Peas supporters? Cowards!
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Post by Darcy Collins on Feb 16, 2022 18:52:33 GMT
See also: Elizabeth Holmes. That was venture capital/private equity, private investments, and the like. I do not believe any traditional financial institutions made loans to Theranos. I think it was actually a potential loan that finally brought everything out - Softbank wanted an audit for a $100 million loan - prior to that it was private investments
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