Trump accused of fraudulently inflating value of Scottish golf courses


NEW YORK’s Attorney General has accused Donald Trump of fraudulently inflating the valuations of his Scottish properties by millions of pounds.

She claims the former President told his accountants that undeveloped land in Aberdeenshire was worth more than $300m dollars – despite telling the Scottish Government that he was not going to build anything on it because of plans to build a windfarm off the coast.

The allegations are part of a lawsuit filed on Wednesday by Letitia James, New York’s most senior lawyer. 

READ MORE: Donald Trump fraud investigation: what does it mean for the former President?

She claims Mr Trump, his family business and three of his children lied to lenders and insurers by inflating the worth of nearly every one of their major properties, including Mar-a-Lago in Florida, and Trump Tower. 

By providing fraudulent statements to lenders and insurers they were able “to obtain beneficial financial terms,” including lower interest rates and premiums. 

Ms James said this allowed the firm to make a quarter of a billion dollars.

Mr Trump has dismissed the action as “another witch hunt”. He said Ms James, who is black, was “racist.”

According to the lawsuit, the Trump organisation “improperly and materially inflated the value of the golf course” in Aberdeenshire and gave “materially false and misleading valuations” for the Turnberry resort.

In both cases, the courses were valued based on their “fixed asset” price – the money spent to acquire and maintain them.

The Menie course was valued as high as $76m in 2013. While Turnberry was estimated at between $123m and $126.8m after “additions.”

However, the Attorney General says the market value of a golf course, according to industry custom and practice, should be based on the revenues that it can produce.

Both courses have made losses for every year that Mr Trump has owned them. Ms James says this means they should have been valued much lower.

Much of the lawsuit’s Scottish focus centres on the valuation of undeveloped land in Aberdeenshire which, Ms James claims “was grossly inflated for several reasons.”

In 2011, the Trump Organisation told its accountants that the value for the land was £75m or $119m based on the then-current exchange rate.

According to the lawsuit, this initial valuation was based on nothing more than a comment given to Forbes Magazine by an executive from the organisation. 

That unsubstantiated quote was then used in reports to accountants in 2011, 2012, and 2013. 

The value more than doubled in 2014 – jumping from $114m to $361m -after the organisation said they could sell 2,500 homes at £83,000 per house. 

At the time, they also valued the golf course itself at $74m, giving the whole property a value of $365m.

According to the lawsuit, the price per home was taken from an email with an appraiser at the firm Ryden LLP, who provided a list of land sales that he stated “may not be particularly comparable for your site.”  

It also did not take into account any allowance for affordable housing or affordable housing payments as required by the Scottish Government. 

There was also no formal planning permission, and, according to the Attorney General, “no factual basis for assuming that 2,500 homes could be built and sold.”

In fact, in their 2014 statement for accountants, the Trump organisation said they had “received outline planning permission in December 2008 for . . . a residential village consisting of 950 holiday homes and 500 single family residences and 36 golf villas.”

Ms James points out that this just 1,486 homes, only 500 of which could be sold.

The others would be rental properties that could only be hired out for no more than six weeks at a time.

And according to material the Trump organisation submitted to the Scottish Government, the holiday homes and golf villas would not be profitable and therefore would not add value to the project. 

The lawsuit states that the firm “falsely valued the 986 rental properties (holiday homes and golf villas) as if they were private residences to be sold.”

Ms James described this as the “Inflated Home Sale Scheme” which, she says, was then used by the Trump Organisation in statements from 2015 through 2018.

In September 2019, Aberdeenshire Council approved 550 dwellings, consisting of 500 private residences and 50 cottages.

Nevertheless, the 2019 Statement, finalised a month later in October 2019, said the value of land would be $221m based on 2,035 private homes.

While 2020 and 2021 statements had much lower values of $101 million and $114 million, this was still based on the development of 1,200 homes. 

What makes this all the more remarkable is that Mr Trump publicly said he was postponing the development in a row with the government over a windfarm development off the coast of Aberdeen. 

At the time, the tycoon declared: “We will put our future plans in Aberdeen on hold, as will many others until this ridiculous proposal is defeated.”

However, his legal challenge was defeated and the wind farm was completed and began producing electricity by mid-2018.

Even though he lost the court battle in 2015, Mr Trump “continued to attribute an inflated value ranging between $267 million and $221 million to the undeveloped land for the years 2015 through 2017.”

Ms James is seeking to bar Mr Trump, his children Donald Jr., Eric and Ivanka, from ever running a business in New York again. She also wants the family business to pay back $250m. 

In a statement on Wednesday night, she said that 11 of Mr Trump’s annual financial statements included more than 200 false and misleading asset valuations.

Other allegations made by the Attorney General include the claim that his Westchester County golf club was valued as if it had charged hefty initiation fees, but that these were never actually collected.

She also alleges that apartments in Trump Park, the company’s building on Park Avenue were valued at almost $50m despite an independent expert saying there were worth just $750,000.

Mr Trump, in a post on his social media site, Truth Social, said: “Another Witch Hunt by a racist Attorney General, Letitia James.”

He said the Democrat, who is seeking re-election, was a “fraud who campaigned on a ‘get Trump”’ platform.”

Green MSP, Ross Greer said he hoped the New York case lead to further investigations in Scotland. 

He told The Herald: “Donald Trump was one of the most reactionary, racist and dodgy Presidents in recent US history. His professed love for Scotland was always a source of embarrassment for many of us.

“There are no shortage of questions to be asked about his dealings and his businesses’ finances, and I am glad that he is finally getting the scrutiny that he deserves.

“We hope that the New York case will set a vital precedent and may lead to further investigations into the Trump Organisation’s assets, deals and conduct here in Scotland and beyond.”





Source link

Denial of responsibility! Planetcirculate is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.