A Panama luxury hotel that once partnered with the Trump Organization alleged today that the company evaded taxes and misrepresented its finances, according to the New York Times. The allegations were made by a former hotel partner in a Manhattan federal court filing, and they sure don’t look good for the president’s company.
According to the filing, the Trump Organization “made fraudulent and false claims to the Panamanian tax authorities” to “cover up its unlawful activities.” It asserts that this illegal activity was found by Panamanian tax authorities last year.
From the Times:
It was not possible to immediately verify the accusations in the filing, which include claims that the Trump Organization failed to pay required taxes on the fees it collected for managing the hotel’s day-to-day affairs. Panamanian law imposes a tax on commissions paid to foreign businesses, and it is not known whether the Trump Organization qualified for an exemption.
The filing does not make clear how much money may be owed — or for how long the Trump Organization may have failed to make the payments — but suggests that the company’s actions on this and other matters exposed the hotel’s owners to millions of dollars in liability.
The Trump Organization didn’t respond to the Times’ request for comment.
The filings also allege that the organization lied about their employee salaries to Panamanian tax authorities, probably in a bid to lower social security payments. These and other actions made “the financial and operational performance of the hotel appear in a false light,” the filing says.
It goes on to say that the Trump Organization “used its control over the hotel bank accounts to make payments to itself and affiliates without withholding the [required] 12.5 percent tax on its management fees, thus intentionally evading taxes.”
The Panama City property, formerly known as the The Trump International Hotel and Tower, was Trump’s only holding in Latin America. Orestes Fintiklis, the man that owns a majority of the hotel, took it away from Trump Organization managers last year and rebranded it as a JW Marriot. Trump’s name was literally peeled off the hotel’s exterior.
Fintiklis, who is from Cyprus, bought most of the hotel in 2017 and subsequently filed legal action against the Trump Organization, which he alleges mismanaged the property. Things got pretty tense after that.
From the Times:
In early 2018, the fight spilled over to the property itself, where shouting and shoving matches broke out and police officers arrived in Kevlar helmets. The Trump Organization accused Mr. Fintiklis of using “thug-like, mob-style tactics.” But in March of last year, a local court ruled in Mr. Fintiklis’s favor and a workman pried off the silver T-R-U-M-P name from the 70-story property, Panama’s tallest building.
The Trump Organization is suing Fintiklis for fraud, saying he owes the company $3 million. Fintiklis, meanwhile, is asking for $35 million in damages.
The Times story notes that though we know through financial disclosures that the Trump Organization received at least a few hundred thousand dollars from the Panama property per year, we don’t know how the organization may have handed taxes, because we still don’t have Trump or his companies’ tax returns. We’re sure that’s just a coincidence!
Read the rest of the story over at the Times.