NEW YORK (AP) 鈥� The accounting firm that prepared former President Donald Trump鈥檚 annual financial statements says the documents, used to secure lucrative loans and burnish Trump's image as a wealthy businessman, 鈥渟hould no longer be relied upon鈥� after New York's attorney general said they regularly misstated the value of assets.
In a letter to the Trump Organization's lawyer Feb. 9, Mazars USA LLP advised the company to inform anyone who had gotten the documents not to use them when assessing the financial health of the company and the ex-president. The firm also said it was cutting ties with Trump, its highest-profile client.
Mazars' letter, made public in a court filing Monday, came just weeks after New York Attorney General Letitia James said her civil investigation uncovered evidence that Trump and his company of its golf clubs, skyscrapers and other properties to get loans and tax benefits.
鈥淲hile we have not concluded that the various financial statements, as a whole, contain material discrepancies, based upon the totality of the circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate,鈥� Mazars General Counsel William J. Kelly wrote to his Trump Organization counterpart, Alan Garten.
Kelly told Garten that Mazars could no longer work with Trump because of a conflict of interest and urged him to find another tax preparer. Kelly said several Trump-related tax returns still needed to be finished, including those of the former president and first lady.
The Trump Organization said in a statement it was 鈥渄isappointed that Mazars has chosen to part ways,鈥� but took Kelly's letter as a positive because the accounting firm hadn鈥檛 found material discrepancies in Trump鈥檚 financial statements.
The letter 鈥渃onfirms that after conducting a subsequent review of all prior statements of financial condition, Mazars鈥� work was performed in accordance with all applicable accounting standards and principles and that such statements of financial condition do not contain any material discrepancies," the Trump Organization said. "This confirmation effectively renders the investigations by the DA and AG moot.鈥�
Kelly said Mazars performed its work on Trump鈥檚 financial statements 鈥渋n accordance with professional standards鈥� but that it could no longer stand by the documents in light of James鈥� findings and its own investigation. Kelly said Mazars鈥� conclusions applied to Trump鈥檚 2011-2020 financial statements. Another firm handled Trump鈥檚 2021 financial statement.
James' office included a copy of Kelly's letter in a court filing as she seeks to enforce a subpoena to have Trump and his two eldest children, Donald Jr. and Ivanka, testify under oath. A state court judge, Arthur Engoron, is scheduled to hear arguments Thursday in the subpoena dispute.
James, a Democrat, said Monday that given the evidence, 鈥渢here should be no doubt that this is a lawful investigation and that we have legitimate reason鈥� to question Trump, a Republican, and his children, both of whom have been Trump Organization executives.
Trump鈥檚 lawyers have argued that any testimony they give could be used against them in a parallel criminal investigation being overseen by the Manhattan district attorney鈥檚 office 鈥� a probe that led to , its longtime chief financial officer.
Trump has given his Statement of Financial Condition 鈥� a yearly snapshot of his holdings 鈥� to banks to secure hundreds of millions of dollars worth of loans on properties such as a Wall Street office building and a Florida golf course, and to financial magazines to justify his place among the world's billionaires.
In a court filing last month, James鈥� office detailed several instances in which Trump misstated the value of assets on financial statements given to banks.
Deutsche Bank accepted Trump鈥檚 financial statements without objection in a deal for $300 million in loans for three of his properties and, in internal memoranda, emphasized Trump鈥檚 reported financial strength as a factor in lending to him, James鈥� office said.
Another bank said it received financial statements in 2014 stating Trump had a net worth of $5.8 billion and liquidity of $302 million. A bank official involved in that deal told James鈥� office that if he were aware of misstatements on Trump鈥檚 statement of financial condition, he would have killed the deal.
James office said its investigation started after Trump's former personal lawyer, Michael Cohen, told Congress in 2019 that Trump had a history of misrepresenting the value of assets to gain favorable loan terms and tax benefits.
Cohen gave copies of three of Trump鈥檚 financial statements to the House Committee on Oversight and Reform. Cohen said Trump gave the statements to Deutsche Bank to inquire about a loan to buy the NFL鈥檚 Buffalo Bills and to Forbes magazine to substantiate his claim to a spot on its list of the world鈥檚 wealthiest people.
Cohen served time in federal prison after pleading guilty in 2018 to tax crimes, lying to Congress and campaign finance violations, some of which involved his role in orchestrating payments to two women to keep them from talking about alleged affairs with Trump.
Trump's lawyers have portrayed Cohen as having a vendetta against Trump and said in a recent court filing that it 鈥渟tretches all credibility to believe that鈥� James' office put 鈥渁ny legitimate stock" in his testimony.
James' office responded Monday that not only did it rely on Cohen's testimony, but that his testimony is 鈥渧indicated by the evidence obtained to date and Mazars鈥檚 notification that those statements should not be relied upon.鈥�
___
Follow Michael Sisak on Twitter at
Michael R. Sisak, The Associated Press
