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Trump’s “Billionaire” Lie Unravels

I had posited in a previous piece that Donald Trump is not actually a billionaire, as he loves to claim – and based on the type of business he is in (Real Estate) that any realistic evaluation of his actual net worth (assets minus liabilities) would probably place him in the under $250 million range. Real Estate deals tend to be heavily leveraged. Meaning the “Bank” owns 90% or more. Indeed in Trump’s normal deal he winds up actually owning not much more than his name on the side of the building.For someone willing to take the risk of punitive litigation by Trump – it isn’t very hard to puncture that veil, and get a true picture.

And I should mention that $250 million may be an optimistic figure – based on the rate he now appears to be borrowing money. That indicates a sinking ship…Of his own device.

Now, the press is beginning to go after this issue…And it isn’t going to be pretty.

Shady accounting underpins Trump’s wealth

The GOP nominee is rich. But how rich depends on odd accounting and subjective criteria.

Donald Trump claims a net worth of more than $10 billion and an income of $557 million. But he appears to get there only by overvaluing properties and ignoring his expenses.

POLITICO spoke with more than a dozen financial experts and Trump’s fellow multimillionaires about the presumptive Republican nominee’s financial statement. Their conclusion: The real estate magnate’s bottom line — what he actually puts in his own pocket — could be much lower than he suggests. Some financial analysts said this, and a very low tax rate, is why Trump won’t release his tax returns.

“I know Donald, I’ve known him a long time, and it gets under his skin if you start writing about the reasons he won’t disclose his returns,” said one prominent hedge fund manager who declined to be identified by name so as not to draw Trump’s ire. “You would see that he doesn’t have the money that he claims to have and he’s not paying much of anything in taxes.”

Trump is certainly wealthy. But in a campaign where the New Yorker has portrayed himself as the biggest, the richest, the classiest and the best at everything, disclosing that he is less rich than he lets on could be damaging. And it is a line of attack Democrats are already using and hope to pound away on until November.

The case against Trump’s accounting of his wealth: His businesses apparently generate a lot of revenue but may not put much cash in his pocket; he assigns himself a net worth that is impossible to verify and may be based in part on fantasy; and he is selling assets and increasing debt in ways that suggest a man scrambling for ready cash.

In response to a list of questions for this story, Trump campaign spokeswoman Hope Hicks emailed: “The report speaks for itself.” If it does, the report does not speak clearly.

The financial disclosure form showed Trump adding fresh debt of at least $50 million, though a campaign news release said Trump is using increased revenue to reduce his debt, which is now at least $315 million and possibly more than $500 million. The disclosure also suggests that Trump sold fund assets to raise as much as $7 million in cash and individual securities to raise up to $9 million more…More Here

 

 

 
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Posted by on May 31, 2016 in The Clown Bus

 

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Enron – Lehman Brothers… Arthur Anderson – Ernst and Young?

One of the criminal characteristics of th last several gigantic corporate frauds has been the acquiescence and in some cases outright criminal participation in the fraud by the accounting firms charged with auditing the books. Arthur Anderson’s collaboration with Enron allowed the company to defraud the investment community out of billions.

While no Accounting Company was ever blamed in the WorldCom scam – One needs to ask, WTF were the auditors?

Now we have Lehman Brothers… And Ernst and Young.

WTF aren’t the guys who perpetuate these frauds in jail like the other criminals spending long sentences?

Ernst & Young faces US lawsuit over Lehman

Ernst & Young has been sued by New York’s attorney general over its role in the collapse of Lehman Brothers in 2008.

The accountancy firm has been accused of being complicit in a “massive accounting fraud” which Lehman ran.

Ernst & Young has said it will “vigorously defend” itself, claiming that there is no factual or legal evidence to be brought against the auditor in this context.

Ernst & Young says: “Lehman’s audited financial statement clearly portrayed Lehman as a highly leveraged entity operating in a risky and volatile industry.”

New York attorney general Andrew Cuomo says: “At a time when it was critical for investors to make informed decisions as to whether to keep or to buy Lehman, Ernst & Young assisted Lehman in defrauding the public.”

The lawsuit did not name as defendants any former top executives at the investment bank whose September 2008 collapse helped spark the global financial crisis.

According to Reuters, the lawsuit seeks more than $150 million in fees that Ernst & Young received from 2001 to 2008 as Lehman’s outside auditor as well as other unspecified damages.

The case focuses on a practice known as Repo 105, which involves removing money temporarily from the balance sheet.

 

 

 
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Posted by on December 22, 2010 in Great American Rip-Off

 

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