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State of New York vs Trump, et al - the civil fraud case against the Trump Organization

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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#26

Post by Gregg »

Slim Cognito wrote: Wed Sep 21, 2022 1:30 pm
jemcanada2 wrote: Wed Sep 21, 2022 12:08 pm Is it wrong that I wish I were ketchup on the wall at Mar-a-Lago right now?

:violin: :violin:
Jem wins the internet.
A moment of silence, please. For the fine gilt edged china plate that died against the wall of the Mar A Lago dining room this morning.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#27

Post by raison de arizona »

Volkonski wrote: Wed Sep 21, 2022 12:59 pm Trump's attorneys now desperately struggling to get him to keep quiet. ;)
tfg has "Truthed" about it several times this morning, but they are basically just personal attacks against James and not worth repeating.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#29

Post by Foggy »

This is all just a financial storage dispute that spiraled out of control. :batting:
Out from under. :thumbsup:
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#30

Post by Slim Cognito »

Foggy wrote: Wed Sep 21, 2022 3:11 pm This is all just a financial storage dispute that spiraled out of control. :batting:
Gem may have won the internet but this post gets honorable mention.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#31

Post by raison de arizona »

Bradley P. Moss @BradMossEsq wrote: White collar laws, what are they?
Ron Filipkowski 🇺🇦 @RonFilipkowski wrote: Newsmax Legal Analyst Alan Dershowitz: “Who were the people defrauded here? The biggest banks in the world. Why can’t they sue and take care of it themselves? Why does Letitia James have to be out there protecting and defending the biggest banks in the country?”
And let me add a quick reminder from James' statement I posted above:
Trump's crimes are not victimless.

When the well-connected and powerful break the law to get more money than they are entitled to, it reduces resources available to working people, small businesses, and taxpayers.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#32

Post by tek »

Newsmax Legal Analyst Alan Dershowitz
Let that sink in.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#33

Post by Gregg »

How about the schools who got less in tax dollars because he defrauded the county by undervaluing the same property?

These same people want to put a black kid who robs a liquor store for $100 in prison for 10 years but if a "billionaire" (shuddup, he says he is) steals what is it, $250 million, well, we should just let him go because if you have a quarter billion sitting around for someone to steal, you probably didn't miss it?
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#34

Post by raison de arizona »

Gregg wrote: Wed Sep 21, 2022 4:56 pm How about the schools who got less in tax dollars because he defrauded the county by undervaluing the same property?

These same people want to put a black kid who robs a liquor store for $100 in prison for 10 years but if a "billionaire" (shuddup, he says he is) steals what is it, $250 million, well, we should just let him go because if you have a quarter billion sitting around for someone to steal, you probably didn't miss it?
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#35

Post by jemcanada2 »

Slim Cognito wrote: Wed Sep 21, 2022 3:23 pm
Foggy wrote: Wed Sep 21, 2022 3:11 pm This is all just a financial storage dispute that spiraled out of control. :batting:
Gem may have won the internet but this post gets honorable mention.
I’ll share the Internet with Foggy! ;)
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#36

Post by sugar magnolia »

Greatgrey wrote: Wed Sep 21, 2022 12:17 pm Went by kinda fast, but in response to a question “how did he get away with this with the banks & insurance companies for so long”, James answers with a statement from Mazars (the accountants) that they never audited anything.

They just accepted what ShitGibbon gave them.
We're in the middle of one of those situations right now. An annual "review" just makes sure all the numbers provided to the CPA by the client add up. An audit takes forever and costs a bajillion bucks apparently.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#37

Post by Gregg »

To be honest, anyone doing business with anyone who uses Mazars should by all rights be questioning everything they have ever seen from Mazars. Trump has demonstrated that for enough money they'll sell their good name to someone who isn't interested in what they are paid to do, just in their name.

Which brings up a point from a long ago universe where I once studied for and took the Uniform CPA Exam (passed all four first time too, Sparky! :thumbsup: )

I seem to remember something about the "Public" part of Certified Public Accountant was the implication that you might be getting paid by the client but you were working for the public. Your job was make companies play by a strict set of rules and any company that said a CPA or a CPA Firm or even more a Big 6 (5,4 ...) Accounting Firm was doing their books had a certain amount of credibility earned not by their reputation but by the Auditor's.

Yeah, sure, wonks and quants would go and actually read that stuff, and lawyers would give it a once over, but the vast majority of people who relied on the reporting of companies using a firm like Mazars saw that name and in their mind they thought "well, they can't be too hinky, Mazars signed their books".

Mazars, not a Big 4 Accounting Firm but still one people know by reputation, has joined firms like Arthur Andersson who no longer deserve it, and if I was say, a bank looking to lend someone a billion with a B of anything except Iraqi Dinar, I'd be telling them they needed to get a real book keeper first.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#38

Post by humblescribe »

Gregg wrote: Wed Sep 21, 2022 6:21 pm To be honest, anyone doing business with anyone who uses Mazars should by all rights be questioning everything they have ever seen from Mazars. Trump has demonstrated that for enough money they'll sell their good name to someone who isn't interested in what they are paid to do, just in their name.

Which brings up a point from a long ago universe where I once studied for and took the Uniform CPA Exam (passed all four first time too, Sparky! :thumbsup: )

Me too, back in the day (1976).

I seem to remember something about the "Public" part of Certified Public Accountant was the implication that you might be getting paid by the client but you were working for the public. Your job was make companies play by a strict set of rules and any company that said a CPA or a CPA Firm or even more a Big 6 (5,4 ...) Accounting Firm was doing their books had a certain amount of credibility earned not by their reputation but by the Auditor's.

Bingo! We may be paid by the client, but our obligation is to the public, or more specifically, those who will read and rely upon the financial statements. We are unlike the legal profession whose only duty is to their client and screw the world. We cannot do that.

Yeah, sure, wonks and quants would go and actually read that stuff, and lawyers would give it a once over, but the vast majority of people who relied on the reporting of companies using a firm like Mazars saw that name and in their mind they thought "well, they can't be too hinky, Mazars signed their books".

Mazars, not a Big 4 Accounting Firm but still one people know by reputation, has joined firms like Arthur Andersson who no longer deserve it, and if I was say, a bank looking to lend someone a billion with a B of anything except Iraqi Dinar, I'd be telling them they needed to get a real book keeper first.
In days of yore (I was around then), we could only attest to audits. As indicated above, these are time consuming and expensive. Testing, testing, and more testing to be able to rely upon the business' system of internal controls. If their controls were shabby or non-existent, then we had to do a shitpile of more work to validate the balance sheet accounts, and do extensive cutoff work to make sure sales and expenses were recorded in the proper accounting periods.

Compilations (ain't worth a plug nickel) and reviews (worth a plug nickel) came to be around 1980. A compilation is merely the financial statements from Foggy, Inc. put onto the accountants' letterhead with minimal work performed other that to make sure the columns foot and the usual caveats are disclosed. Reviews are supposed to be this extensive analysis of the various balance sheet accounts and selected income statement accounts. We are supposed to use our skills as accountants to drill down and ask pertinent questions if things look wonky. We are supposed to factor in client bias to our approach. We are supposed to obtain management's budgets, projections, or other internal reporting throughout the year and then compare to the year-end results. And ask more questions.

Compilations can use any form of accounting the client desires. GAAP? Sure. Income Tax Basis? Sure. Modified GAAP with a departure for fixed asset costs? Yep. Just gotta disclose the basis. But only GAAP statements can use the headings Balance Sheet and Income Statement. Other bases of accounting must use Statement of Assets and Liabilities and Owners' Equity or Statement of Income and Expenses.

Personal financial statements are a whole 'nother ball game. They use fair market value of all assets and liabilities instead of cost basis. These values are provided by the individual and are not questioned by the accountant. Of course the report is supposed to state something like, "Valuation of assets and liabilities have been provided by Foggy. We have not audited or examined these valuations, and we provide no assurance that they are accurate."

As I pull up my sleeve garters, it is not clear what type of statements Mazars prepared. One would think that with nine-figure loans from various lenders, that they would require a full-blown audit, and not some essentially worthless compilation or review. And if a personal financial statement from the Orange Jesus were part of the lending covenants, that there would be something in the files to support whatever valuations were ascribed to all his assets and liabilities. And if I were Mazars, you can be damn sure that I would get a copy of the NYC tax bill and compare it with the $$$ that we were told to use for the personal financial statements. And then ask questions. More questions.

Maybe my belt and suspenders are showing.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#39

Post by Gregg »

:snippity:
As I pull up my sleeve garters, it is not clear what type of statements Mazars prepared. One would think that with nine-figure loans from various lenders, that they would require a full-blown audit, and not some essentially worthless compilation or review. And if a personal financial statement from the Orange Jesus were part of the lending covenants, that there would be something in the files to support whatever valuations were ascribed to all his assets and liabilities. And if I were Mazars, you can be damn sure that I would get a copy of the NYC tax bill and compare it with the $$$ that we were told to use for the personal financial statements. And then ask questions. More questions.

Maybe my belt and suspenders are showing.
Well, the kinds of banks that asked those kinds of questions quit loaning him money after he quit paying it back. Nah, he needed "VIP Banking Services".

There exists, at places where the rules are kind of flexible usually, a different kind of banking than "we loan you the bank's money and we want it back with interest". So called "Private Banking" is where the bank has a guy who has bunch of money and he wants better rates than the the passbook account. He's willing to take some risks that the bank itself won't or can't, oftentimes because banks with FDIC insured money have to at least look like they want to be paid. So the bank takes that customer's money, as a separate pile from their insured deposits and make a loan to another guy who say, wants to build a casino and doesn't want to fill out all those pesky disclosures the government wants to borrow insured deposits. The bank puts the two together, sometimes they know who the other is, sometimes not, most of the time they do with plausible deniability. It's a little shady a lot of the time. It is also, if your bank is operating outside the strict confines of US Jurisdiction or rules, a damn convenient way to launder money or pay off someone under the table.

You have $7 billion in US Currency, mostly 20s and 50s? Bank of America doesn't believe you when you say you got it by operating the world's most expensive pinball machines? Stop in to Geneva and see Fritz (Swiss banks invented this shit), they'll take your billiard hall proceeds and write you a nice clean check you can deposit into a Savings and Loan in St Louis, minus a fee, of course. That kind of dried up 40 years ago but there is still another thing or two they can do.

Say you want to buy a golf course in Scotland and don't have a billion collecting dust. You'd go to Citibank but they're still butt hurt that you didn't pay back the last billion they gave you. Like, don't they understand shit happens? Now, we won't give you our money, because we can't take the loss, and let's be real, you ain't gonna pay this back. But we do have some Russians who want to buy a condo or 500 in Boca and NYC. So they might loan you the money for your golf course if you put up some real estate for collateral. There will be an interesting fee structure, sure, but you'll get your golf course, and they'll not only get a nice place to crash when its too cold to stay in Moscow, but you'll owe them a favor later. Happy to do it.

Allegedly...
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#40

Post by sugar magnolia »

humblescribe wrote: Wed Sep 21, 2022 8:12 pm
Compilations can use any form of accounting the client desires. GAAP? Sure. Income Tax Basis? Sure. Modified GAAP with a departure for fixed asset costs? Yep. Just gotta disclose the basis. But only GAAP statements can use the headings Balance Sheet and Income Statement. Other bases of accounting must use Statement of Assets and Liabilities and Owners' Equity or Statement of Income and Expenses.

What are the differences between GAAP and the others?
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#41

Post by Foggy »

Yeah well here's my question for the CPAs and other knowledgeable people here:

What Trump did, in any of these transactions, required more than one otherwise respectable company to look the other way when dealing with him. Mazars, Deutsche Bank, Cushman & Wakefield, whoever. Nobody really thought Trump’s apartment was 30,000 sq. ft. and the most valuable apartment in New York.

But Trump was a known crook long before he was elected in 2016. He didn't have any political power. He had bankrupted casinos, which isn't easy. But he was nobody special, which means my question is,

HOW MANY OTHER PEOPLE who were clients of these big financial institutions were actually obvious crooks? How many other fake financial statements are underlying their businesses? If we take Cushman & Wakefield apart into little tiny pieces, how deep does the rot really go?

That may be more than one question. :oopsy:
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#42

Post by Gregg »

I have no doubt that the casual corruption that people like Trump get away with because of companies like Mazars would destroy a pretty good chunk of the celebrity business people who spend as much time on page six of The New York Post and People Magazine as their businesses do in The Wall Street Journal and Forbes.

Look how many "genius" business guys turned out to be not so much. Jack Welch of GE, Al Dunlap, Harvey McKay, Roger Smith, John DeLorean and Bob Lutz just from GM. All of them had books ghost written for them that basically said "Look how smart I am". Don't even get me started on Enron, a company whose business turned out not to be "A fraud" but simply fraud, that was the business. Top to bottom, there are enough criminals in that one company to fill a prison and some of them never saw a courtroom (looking at you Rebecca Mark and Lou Pai) Half of them inspired by Trump himself. Every one of them the darling of the business press, spent more time on CNBC getting drooled on that Donald Trump at a cross burning in Mississippi and every one of them turned out to have been better and passing off and covering up problems than fixing them.

When the UAW started to look like a corrupt union about 10 years ago and then suddenly turned out to be really corrupt I told everyone that the union might be rotten to the core but I promise you you will not find any of it that involves Ford. For one reason, for Ford to have been involved, Bill Ford would have had to known. And the low level corruption that GM and especially the newly Italian subsidiary that used to be Chrysler is something that Bill Ford didn't need. Unlike the other companies, Ford doesn't have the constant pressure for the next quarter to be the best ever, and screw the future, my bonus is based on this year. Ford still has the Ford family and for the last 20 years Bill Ford, a genuinely good guy who first, is a billionaire anyway, second, has more of his wealth outside Ford than it it (true! He was an early investor in Ebay and made bank on that, still sits on their board) and finally, his name, the name on the building, means more to him than the amount of money involved in paying off a union negotiator to make the next contract a little sweeter.

But how many companies, run by people who are basically mercenaries, make who knows what kinds of deals with crooked unions, bent banks, bought bookkeepers and lawyers who aren't afraid to see what they can get away with. Most of them we will never know about because unlike Trump they don't phuck up the grift by running for President and putting a target on your back.

You can go decades with the tabloids hinting that you have mob ties or might have slipped a few dollars out the side door. You can get away stealing $250 million dollars pretty easy and being pretty famous doing it, until you finally pick a fight with someone who will stand up to you on your terms.

Trump based half his life on threatening to sue or suing or going to court with people and even governments that didn't have the resources to beat him. "Contractors? Offer them 30% or tell them to sue us" 'County Tax office? Let the overworked civil servants making $40k a year spend 6 months fighting $1,000 an hour law firms who bury them in paper, they'll go away" Trump's folly was getting attention of people who would grind him down and even if he made them go the SCOTUS several times were still there, and what have we here?" Turns out being investigated by the DOJ, 2 states and half the people interested in politics is a different thing than having John Baron call the WSJ and telling them the dirt on the down low.

So yeah, there are hundreds of people and firms who are doing it, some quite famous more we've never even heard of, and as long as they don't punch above their weight they'll get away with it most of the time.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#43

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I was afraid you'd say that. :(
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#44

Post by humblescribe »

sugar magnolia wrote: Wed Sep 21, 2022 8:58 pm
humblescribe wrote: Wed Sep 21, 2022 8:12 pm
Compilations can use any form of accounting the client desires. GAAP? Sure. Income Tax Basis? Sure. Modified GAAP with a departure for fixed asset costs? Yep. Just gotta disclose the basis. But only GAAP statements can use the headings Balance Sheet and Income Statement. Other bases of accounting must use Statement of Assets and Liabilities and Owners' Equity or Statement of Income and Expenses.

What are the differences between GAAP and the others?
Without going too deep into the weeds, Sugar:

Generally Accepted Accounting Principles is a bunch of principles promulgated by the Financial Accounting Standards Board and its predecessors. They specify how to record certain transactions and how to disclose them if deemed necessary in footnotes. They exist so that people can compare business A to business B because they both are preparing their financial statements using the same rules and principles.

On the other hand, OCBOA (Other Comprehensive Bases of Accounting) do not necessarily implement GAAP, or only use certain parts of GAAP and not all.

The most common OCBOA would be the cash receipts and disbursements method of accounting. Income is recorded when received, and expenses are recorded when paid. GAAP says that income is recorded when earned, and expenses are recorded when incurred. We call this the accrual method.

Think of your W-2. You work the last week of Year 1. You get paid January 7 Year 2. Your employer (if using GAAP) will deduct your wages in Year 1 because that period was when they were incurred. Yet your W-2 for Year 1 will not reflect those wages. They will be on your W-2 for Year 2 because you are on the cash method and did not receive those wages until Year 2.

Hope this helps, and that your eyes are not rolling around in their sockets!
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#45

Post by humblescribe »

Gregg wrote: Thu Sep 22, 2022 5:12 pm I have no doubt that the casual corruption that people like Trump get away with because of companies like Mazars would destroy a pretty good chunk of the celebrity business people who spend as much time on page six of The New York Post and People Magazine as their businesses do in The Wall Street Journal and Forbes.


:snippity:

Too also: Accountants are basically insecure. We see our clients once per year; maybe twice. We don't know from one year to the next if our client will be returning to us for accounting and auditing services, tax preparation, consulting, or whatever. Most clients do not offer up the courtesy of a phone call saying that they've decided to go elsewhere because of (fill in the blank.) It isn't until we look at the calendar and we think, "Why hasn't Gregg sent me his stuff? I better give him a call or email." Then Gregg tells me that my fees are too high. Or maybe he got a letter from the IRS. Or maybe his cousin just got licensed and wants to help his cousin.

Meanwhile these firms (probably a lot like many law firms) have begun to rely upon these fees from high rolling clients. You don't want to piss off the Orange Goose because he is probably paying large six or seven figures to your firm each year. You've adopted a more lavish life style with all this income, and you'd hate to give much of it up if you lose a $1 million client. And it is likely that you've received a number of lucrative referrals from this client too.

Then if you resign, it is quite possible that you'll be speaking to the successor accountant. Just what do you say to the new accountant without your lawyer present?

So, I think a lot of Mazars situation is quite the :pickle: of their own making.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#46

Post by Tiredretiredlawyer »

Extremely helpful!!!!! Now I can talk a little bit with my CPA son and daughter-in-law!
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#47

Post by Gregg »

humblescribe wrote: Thu Sep 22, 2022 6:50 pm
sugar magnolia wrote: Wed Sep 21, 2022 8:58 pm
humblescribe wrote: Wed Sep 21, 2022 8:12 pm
Compilations can use any form of accounting the client desires. GAAP? Sure. Income Tax Basis? Sure. Modified GAAP with a departure for fixed asset costs? Yep. Just gotta disclose the basis. But only GAAP statements can use the headings Balance Sheet and Income Statement. Other bases of accounting must use Statement of Assets and Liabilities and Owners' Equity or Statement of Income and Expenses.

What are the differences between GAAP and the others?
Without going too deep into the weeds, Sugar:

Generally Accepted Accounting Principles is a bunch of principles promulgated by the Financial Accounting Standards Board and its predecessors. They specify how to record certain transactions and how to disclose them if deemed necessary in footnotes. They exist so that people can compare business A to business B because they both are preparing their financial statements using the same rules and principles.

On the other hand, OCBOA (Other Comprehensive Bases of Accounting) do not necessarily implement GAAP, or only use certain parts of GAAP and not all.

The most common OCBOA would be the cash receipts and disbursements method of accounting. Income is recorded when received, and expenses are recorded when paid. GAAP says that income is recorded when earned, and expenses are recorded when incurred. We call this the accrual method.

Think of your W-2. You work the last week of Year 1. You get paid January 7 Year 2. Your employer (if using GAAP) will deduct your wages in Year 1 because that period was when they were incurred. Yet your W-2 for Year 1 will not reflect those wages. They will be on your W-2 for Year 2 because you are on the cash method and did not receive those wages until Year 2.

Hope this helps, and that your eyes are not rolling around in their sockets!

I'd add that a good way to understand Accrual is you pay your annual insurance bill in January, for accounting purposes you divide that payment by 12 to accrue the liability for it over 12 months, record the cash when paid and deplete the cash against the accruals.
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#49

Post by AndyinPA »

:rotflmao:
"Choose your leaders with wisdom and forethought. To be led by a coward is to be controlled by all that the coward fears… To be led by a liar is to ask to be told lies." -Octavia E. Butler
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Re: State of New York vs Trump, et al - the civil fraud case against the Trump Organization

#50

Post by Foggy »

So WHY have all the banks that have outstanding loans to Trump or the Trump Organization not called in those loans, after it has been credibly alleged that the loans are based on phony valuation of the collateral? :think:

Those loans aren't improving. Who's going to be last to pull any money out of the crumbling edifice?
Out from under. :thumbsup:
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