Trump Organization’s accounting firm says 10 years of financial statements are unreliable

By Kara Scannell, CNN

Former President Donald Trump‘s long-time accounting firm informed the Trump Organization last week that it should no longer rely on nearly 10 years’ worth of financial statements and that they would no longer be their accountants, citing a conflict of interest.

“We have come to this conclusion based, in part, upon the filings made by the New York Attorney General on January 18, 2022, our own investigation, and information received from internal and external sources,” Mazars wrote in a letter to the Trump Organization chief legal officer, advising them to no longer rely on financial statements ending June 2011 through June 2020.

“While 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.”

The company also advised the Trump Organization to inform any recipients of the statements, such as lenders or insurers, to not rely on the statements.

Monday, Mazars said it would no longer act as Trump’s accountant, citing a “non-waivable conflict of interest.” The accounting firm said the only work not completed was the filing of Trump and Melania Trump’s tax returns. It says they are still seeking information about an apartment for Matthew Calamari Jr., the company’s head of security, which they have sought for months but have not received. Trump’s main accountant, Donald Bender, testified before the grand jury investigating the Trump Organization last year, sources told CNN.

The letter was included in a court filing by the New York attorney general’s office, which has been trying to enforce a subpoena for documents from Trump and seek his testimony as well as that of Donald Trump Jr., and Ivanka Trump. A court hearing is set for Thursday.

“While we are disappointed that Mazars has chosen to part ways, their February 9, 2022 letter confirms that after conducting a subsequent review of all prior statements of financial condition, Mazars’ 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,” a Trump Organization spokesperson said Monday. “This confirmation effectively renders the investigations by the DA and AG moot.”

Mazars didn’t respond to CNN’s requests for comment.

Some lawyers say it’s likely Mazars issued the warning since they had previously signed off on the financial statements, and with recent allegations that they are inaccurate, they would want to protect themselves and sound an alarm that they shouldn’t be relied on anymore.

The New York attorney general and Manhattan district attorney’s office have been investigating the accuracy of Trump’s financial statements to determine whether any insurers, lenders or others were misled. Trump has previously said in depositions in civil investigations that he would give his opinion about the values of certain properties and it was “predominantly” Trump Organization’s chief financial officer Allen Weisselberg who decided the final number.

Mazars compiled the statements and included a two-page introduction that stated Trump was responsible for valuations, but they noted that in many ways they did not comply with US accounting rules.

In a lengthy court filing last month, the New York attorney general’s office alleged it has found “significant” evidence “indicating that the Trump Organization used fraudulent or misleading asset valuations to obtain a host of economic benefits, including loans, insurance coverage, and tax deductions.” On the financial statements, they alleged, there were numerous “misleading statements and omissions.”

Citing the Mazars letter, lawyers for the New York attorney general’s office wrote on Monday, “This development further reinforces what OAG’s previous submissions already showed: The Court should order Respondents’ compliance with OAG’s document and testimonial subpoenas.”

Lawyers working for New York Attorney General Letitia James also pushed back on Trump’s argument that she is trying to “end run” the grand jury process by seeking their testimony as part of the city investigation while there is an ongoing criminal investigation. Trump’s team has argued that James, whose office announced it was teaming up with the Manhattan district attorney’s office on the criminal case, was politically motivated.

In Monday’s filing, James’ office said two attorneys were designated to work with the district attorney, but said they “report to, and operate at, the direction” of the district attorney, Alvin Bragg.

This story has been updated with additional details.

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