The New York Times reports that more than 200 tax returns from the president’s father Fred Trump, his companies, various Trump partnerships and trusts show that the Trump family — including Donald Trump — engaged in “dubious tax schemes during the 1990s, including instances of outright fraud.”
The scheme reportedly began in 1990 when Donald tried to get Fred to sign over complete control of his estate in an updated will, but was thwarted by Fred:
Fred Trump had given careful thought to what would become of his empire after he died, and had hired one of the nation’s top estate lawyers to draft his will.
But in December 1990, Donald Trump sent his father a document, drafted by one of his own lawyers, that sought to make significant changes to that will.
Fred Trump, then 85, had never before set eyes on the document, 12 pages of dense legalese. Nor had he authorized its preparation. Nor had he met the lawyer who drafted it.
Fred went to his daughter, a federal judge, Maryanne Trump Barry and told her: “This doesn’t pass the smell test.”
Maryanne believed her dad was worried the Trump fortune would go to pay off Donald’s creditors whom he owed millions:
Donald was in precarious financial straits by his own admission. and Dad was very concerned as a man who worked hard for his money and never wanted any of it to leave the family.
Fred reportedly told Maryann to find new estate lawyers, who stripped Donald of control over his father’s estate.
The Trumps then set up a scheme to transfer millions of dollars from Fred to the children — without paying estate taxes — notes The New York Times:
Simply put, without immediate action, Fred Trump’s heirs faced the prospect of losing hundreds of millions of dollars to estate taxes. Whatever their differences, the Trumps formulated a plan to avoid this fate. How they did it is a story never before told…
The Trumps’ plan, executed over the next decade, blended traditional techniques — such as rewriting Fred Trump’s will to maximize tax avoidance — with unorthodox strategies that tax experts told The Times were legally dubious and, in some cases, appeared to be fraudulent.
As a result, the Trump children would gain ownership of virtually all of their father’s buildings without having to pay a penny of their own. They would turn the mountain of cash into a molehill of cash.
And hundreds of millions of dollars that otherwise would have gone to the United States Treasury would instead go to Fred Trump’s children.
Fred reportedly created a shell company, All County Building Supply & Maintenance, whose “main purpose” was to allow Fred to “
The New York Times notes that in August 1992, All County to over-billed Fred’s companies for appliances “marked up by 20 percent, or 50 percent,” and the excess money went to All County, which was owned by Fred’s children — including the president — free from inheritance taxes:
The more Fred Trump paid, the more All County made, which was precisely the plan…
All told, The Times documented 295 streams of revenue that Fred Trump created over five decades to enrich his son. In most cases his four other children benefited equally.
But over time, as Donald Trump careened from one financial disaster to the next, his father found ways to give him substantially more money, records show…
While Fred Trump helped finance the accouterments of wealth, Donald Trump, master self-promoter, spun them into a seductive narrative.
Fred Trump’s money, for example, helped build Trump Tower, the talisman of privilege that established his son as a major player in New York.
While the president will not likely be charged with criminal actions, he could still be hit with civil fines, reports The New York Times:
According to tax experts, it is unlikely that Mr. Trump would be vulnerable to criminal prosecution for helping his parents evade taxes because the acts happened too long ago and are past the statute of limitations. There is no time limit, however, on civil fines for tax fraud.
Trump’s attorney denied the extensive report, but failed to provide any proof that the report is inaccurate:
There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate.
The New York State Department of Taxation and Finance told CNBC that it is investigating the allegations in the report:
The Tax Department is reviewing the allegations in the NYT article and is vigorously pursuing all appropriate avenues of investigation.