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Defending against accusations

Member: Nifa

Current newspaper accounts state that the US tax authorities are investigating allegations that Donald Trump participated in “dubious tax schemes”, including “instances of outright fraud” that boosted his wealth by hundreds of millions of dollars. According to the reports, the President is said to have received the equivalent of at least $413m (£318m) from his father Fred C Trump’s property empire, with much of the money allegedly accumulated through tax evasion.

The New York Times mounted an investigation that uncovered a “vast trove of confidential tax returns and financial records” which the newspaper said showed Mr Trump and his siblings set up a fake corporation to disguise millions of dollars in gifts from their parents.

Mr Trump has long described himself as a self-made billionaire, who started with a small loan from his father that he multiplied into a multi-billion empire, but the documentation unearthed by the investigation appears to paint a different picture and suggests that by the time he was three, Mr Trump was earning $200,000 (£153,000) a year (in today’s money) from his father’s business dealings.

The White House has called the Times’ report “misleading” but has not denied or addressed the details of the story. In the case of allegations of fraud, those accused will almost certainly engage their own forensic investigators to amass evidence to counter the prosecution’s allegations.

This is more than likely in this case, as New York State’s Department of Taxation and Finance has said it is reviewing the allegations in the Times’ article and is “vigorously pursuing all appropriate avenues of investigation”. Although there is little likelihood that Mr Trump could face criminal prosecution because the alleged actions are past the statute of limitations, there is no time limit on civil fines for tax fraud.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “When faced with or making accusations of fraud, the best resource is a forensic accountant, who can closely scrutinise the finer details in order to support the prosecution or defence.”

Author: Roger Isaacs 5 October 2018

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