Former US President Donald Trump’s accountants announced last week that they are cutting ties with the Trump Organization.
This was revealed in a letter that the firm’s US general counsel, William Kelly, wrote to the Trump Organization’s lawyer, informing him that it no longer vouched for statements of financial conditions for Mr Trump from 30 June 2011 to 30 June 2020.
This will come as a blow to the former President, who is facing a total of 19 legal challenges, six of which involve alleged financial irregularities.
By retracting its financial statements, the accounting firm Mazars is leaving Mr Trump potentially exposed to substantial legal and financial problems.
Mr Kelly’s letter was included in a court filing by New York Attorney General Letitia James, who is investigating whether Mr Trump’s real estate company improperly inflated or deflated the values of its holdings to secure loans or lower its tax bills.
The statements of financial conditions were used by Mr Trump and his family business to attract and secure hundreds of millions of dollars in loans.
According to Ms James, there have been several instances involving golf courses, real estate and other assets where the family had allegedly “falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for economic benefit”.
Ms James’s investigation is being pursued on both civil and criminal lines, so losing the backing of their long-term accountants to help refute these allegations could not have come at a worse time.
Commenting on the situation, Roger Isaacs, Forensic Partner at Milsted Langdon, said: “The loss of his accountants’ support is a significant development in this case for Mr Trump and his companies.
“Based on past experience, Donald Trump has been known to apply the adage that the best form of defence is attack. For that reason, one has to wonder whether he might be considering instructing his own forensic accountants and lawyers to issue claims against his former accountancy advisers.
His accountants might therefore join the long list of individuals who have paid a high price for having benefitted in the past from a close association with the former President.”