Former Arizona State Representative Richard David Miranda was sentenced today to 27 months in prison for defrauding a charity of more than $140,000 and evading income tax related to those unlawfully obtained funds.

U.S. District Judge Reggie B. Walton for the District of Columbia sentenced Mine S. Pase to 14 months in prison, to be followed by three years of supervised release.

U.S. District Judge Marcia G. Cooke in the Southern District of Florida sentenced Ariel Rodriguez to 73 months in prison and three years of supervised release and Reynaldo Navarro to 74 months in prison and three years of supervised release.

Alejandro aka “Alex” Curbelo, 32, of Miami was sentenced before U.S. District Judge Joan Lenard.

The Department of Justice has forfeited $401,931 in assets traceable to Diepreye Solomon Peter Alamieyeseigha, a former Governor of Bayelsa State, Nigeria.

The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a Clean Air Act settlement with Dairyland Power Cooperative (DPC) that will cover the utility’s three power plants in Alma and Genoa, Wis. DPC has agreed to invest approximately $150 million in pollution control technology that will protect public health and resolve violations of the Clean Air Act.

The Department of Justice today filed the second largest fair lending settlement in the department’s history to resolve allegations that Wells Fargo Bank, the largest residential home mortgage originator in the United States, engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers in its mortgage lending from 2004 through 2009.

Aleksandr Suvorov, of Estonia, was sentenced today to seven years in prison for his role in two separate hacking schemes involving a total of more than 240,000 stolen credit card numbers.

Through an application to register and enforce two orders from United Kingdom courts, the Department of Justice has secured a restraining order against more than $3 million in corruption proceeds located in the United States related to James Onanefe Ibori, the former governor of Nigeria’s oil-rich Delta State.

Peter Borgia Jr., 22, was sentenced by U.S. District Judge Leonie M. Brinkema.

James W. Carell, CareAll Management LLC (formerly known as Diversified Health Management Inc.), CareAll Inc., the James W. Carell Family Trust, VIP Home Nursing and Rehabilitation Services LLC, Professional Home Health Care LLC, University Home Health, LLC and Elizabeth Vining (as representative of the Estate of Robert Vining) have agreed to pay $9.375 million to the federal government. This payment is to resolve the lawsuit that the United States filed in 2009 alleging that they violated the False Claims Act, caused Medicare to pay out money through mistake of fact, and were unjustly enriched by falsely concealing the home health agencies’ relationship with their management company, the Justice Department announced today.

Gino Carlucci was sentenced to 188 months in prison for his role in conspiracies to commit money laundering and to defraud the Internal Revenue Service (IRS), and for filing a false income tax return, the Justice Department and the IRS announced today. On July 25, 2011, a federal jury in Phoenix convicted Carlucci of both conspiracies and the tax crime after an eight-day trial.

Attorney General Eric Holder, Deputy Attorney General James Cole, U.S. Attorney for the District of Maryland Rod Rosenstein, and Bureau of Justice Assistance Deputy Director, Kristen Mahoney, today announced more than $2.4 million in grants to 13 jurisdictions to combat the purchase and sale of counterfeit and pirated products. Intellectual Property theft refers to the violation of criminal laws that protect copyrights, patents, trademarks, other forms of intellectual property and trade secrets, both in the United States and abroad.

Bruce Alan Edward, 48, of Atlanta, Mich., was charged in an indictment returned on Oct. 24, 2012, and unsealed on Nov. 1, 2012, by the federal grand jury in Bay City, Mich.

Baylor University Medical Center, Baylor Health Care System and HealthTexas Provider Network have agreed to pay the United States $907,355 to settle allegations that Baylor submitted false claims to Medicare, the Civilian Health and Medical Program of the Uniformed Services and the Federal Employees Health Benefit Program for various radiation oncology services, including intensity modulated radiation therapy.

April J. Rampton, 41, formerly of Heber City, Utah, was convicted yesterday in U.S. District Court in Salt Lake City of nine counts of filing false claims for income tax refunds, the Justice Department and Internal Revenue Service (IRS) announced. Rampton, who was indicted on Sept. 14, 2011, was released following the verdict. She is scheduled to be sentenced before U.S. District Judge Dee Benson on Feb. 27, 2013. The jury was unable to reach a verdict on six similar counts.

The Department of Justice’s Office on Violence Against Women (OVW) today announced $12.6 million dollars in grants awarded to 20 communities as part of a new, consolidated program designed to more effectively reduce dating violence.

Charges were unsealed today against four former executives of BizJet International Sales and Support Inc., the U.S.-based subsidiary of Lufthansa Technik AG, which provides aircraft maintenance, repair and overhaul (MRO) services, for their alleged participation in a scheme to pay bribes to government officials in Latin America.

The Department of Justice, the U.S. Environmental Protection Agency (EPA), and the United States Attorney’s Office for the Western District of Wisconsin announced a Clean Air Act (CAA) settlement with Wisconsin Power and Light Company (WPL) that will significantly reduce air pollution from three coal-fired power plants located near Portage, Sheboygan, and Cassville, Wis.

Wal-Mart Stores Inc. pleaded guilty today in cases filed by federal prosecutors in Los Angeles and San Francisco to six counts of violating the Clean Water Act by illegally handling and disposing of hazardous materials at its retail stores across the United States.

Two executives at a Virginia-based security contracting firm were sentenced in the Eastern District of Virginia for their roles in using a front company to obtain more than $31 million intended for disadvantaged small businesses as part of the Small Business Administration’s (SBA) Section 8(a) program. This program allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.

Fifty-five hospitals located throughout twenty-one states have agreed to pay the United States a total of more than $34 million to settle allegations that the health care facilities submitted false claims to Medicare for kyphoplasty procedures.

The U.S. District Court for the District of Columbia has entered judgment for more than $17 million against Dr. Ishtiaq Malik and his two companies, Ishtiaq Malik M.D., P.C. and Advanced Nuclear Diagnostics, for submitting false nuclear cardiology claims to federal and state health care programs.

Global health care giant Johnson &s largest long-term care pharmacy provider.

The Justice Department has awarded more than $62 million in grants to strengthen efforts to help people returning from prison rejoin their communities and become productive, law-abiding citizens.

Vantage Oncology LLC (Vantage) has agreed to pay the government more than $2.08 million to settle allegations that it submitted false claims to Medicare for radiation oncology services performed at its Illinois centers from 2007 through June 2012.

Attorney General Eric Holder today announced that the Justice Department collected at least $8 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013.

CareFusion Corp. has agreed to pay the government $40.1 million to settle allegations that it violated the False Claims Act by paying kickbacks and promoting its products for uses that were not approved by the Food and Drug Administration.

Michael R. Barr, former chief executive officer of Louisville, Kentucky-based HealthEssentials Solutions Inc., has agreed to pay $1 million to resolve allegations that he knowingly caused HealthEssentials to submit false claims to Medicare between 1999 and 2004.

U.S. District Court Judge Susan C. Bucklew sentenced Andrew Blane Fields, 62, of Lutz, Fla., to serve 33 years and nine months in prison followed by five years of supervised release, the Justice Department announced today.

A civilian employee of the U.S. Navy posted at the Capodichino Navy Base near Naples, Italy, was arraigned yesterday in Norfolk, Va., for allegedly obtaining more than $360,000 in housing benefits that he was not entitled to receive.

The Department of Justice has frozen more than $458 million in corruption proceeds hidden in bank accounts around the world by former Nigerian dictator Sani Abacha and conspirators.

The leader of an identity theft ring that stole more than 600 identities from U.S. government employees and others was sentenced today to serve 12 years in prison, followed by three years of supervised release.

Dick Reid Jenkins, of Heber City, Utah, was convicted today, in U.S. District Court for the District of Utah, of eighteen counts of filing false claims for income tax refunds and one count of presenting a fictitious financial instrument, the Justice Department and Internal Revenue Service (IRS) announced.

JC Stamps, a former union official, pleaded guilty today to embezzling more than $190,000 from two labor organizations he founded and an employee benefit plan

RE/MAX Allegiance Relocation Services, a Virginia-based move management company, has agreed to pay the government $509,807 to resolve allegations that it violated the False Claims Act by overbilling for transportation services, the Department of Justice announced today

The former president and chief executive officer of BizJet International Sales and Support Inc., a U.S.-based subsidiary of Lufthansa Technik AG with headquarters in Tulsa, Oklahoma, that provides aircraft maintenance, repair and overhaul services, pleaded guilty today for his participation in a scheme to pay bribes to foreign government officials

An associate of the Armenian Power gang, who was convicted at trial for his role in a racketeering conspiracy that included stealing personal and financial information of elderly bank customers for accounts valued at more than $25 million, was sentenced to serve 160 months in prison today in federal court in Los Angeles

A Louisiana psychiatrist was sentenced in federal court in Baton Rouge, Louisiana, today to serve 86 months in prison for his role in a $258.5 million Medicare fraud scheme involving partial hospitalization psychiatric services. He was further ordered to pay $43.5 million in restitution and to forfeit all proceeds from the fraudulent scheme

DSM today published the first part of a new report in its Global Insight Series, focused on breakfast habits and behavior in Europe and the US.

Impossible to write a love song about FDA warehousing regulations, you say?
Challenge accepted.

(Sung to the tune of Billy Joel's "She's Always A Woman.")

by Peter Elkind, ProPublica, and Meg Cramer, WNYC, with Doris Burke, ProPublica

On May 12, after a six-week delay caused by the pandemic, the U.S. Supreme Court will hear arguments in the epic battle by congressional committees and New York prosecutors to pry loose eight years of President Donald Trump’s tax returns.

Much about the case is without precedent. Oral arguments will be publicly broadcast on live audio. The nine justices and opposing lawyers will debate the issues remotely, from their offices and homes. And the central question is extraordinary: Is the president of the United States immune from congressional — and even criminal — investigation?

Next week’s arguments concern whether Trump’s accounting firm, Mazars USA, must hand over his tax returns and other records to a House committee and the Manhattan district attorney, which have separately subpoenaed them. (There will also be arguments on congressional subpoenas to two of Trump’s banks.) Trump, who promised while running for president to make his tax returns public, has sued to block the documents’ release. The questions apply beyond this case. Trump has repeatedly resisted congressional scrutiny, most recently by vowing to ignore oversight requirements included in the trillion-dollar pandemic-bailout legislation. “I’ll be the oversight,” he declared.

The president’s accounting firm has found itself at the center of this high-stakes fight. The American arm of a global firm, Mazars has portrayed itself as an innocent bystander in the war between Trump and his pursuers, dragged into the conflict merely for possessing the trove of subpoenaed records. It’s the firm’s first burst into the media glare apart from an unfortunate moment of tabloid coverage in 2016 after one of its New York partners stabbed his wife to death in the shower of their suburban home. (He pleaded guilty to manslaughter.) Mazars has said it will abide by whatever decision the court makes in the Trump matter.

But Trump’s accountants are far from bystanders in the matters under scrutiny — or in the rise of Trump. Over a span of decades, they have played two critical, but discordant, roles for Trump. One is common for an accounting firm: to help him pay the smallest amount of taxes possible. The second is not common at all: to help him appear to the world to be rich beyond imagining. That sometimes requires creating precisely the opposite impression of what’s in his tax filings.

Time and again, from press interviews in the 1980s to the launch of his 2016 campaign, Trump has trotted out evermore outsized claims of his wealth, frequently brandishing papers prepared by members of his accounting team, who have sometimes been called on to appear in person when they were presented, offering a sort of mute testimony in support of the findings. The accountants’ written disclaimers — that the calculations rely on Trump’s own numbers, rendering them essentially meaningless — are rarely mentioned.

Trump’s accountants have been crucial enablers in his remarkable rise. And like their marquee client, they have a surprisingly colorful and tangled story of their own. It’s dramatically at odds with the image Trump has presented of his accountants as “one of the most highly respected” big firms, solemnly confirming his numbers after months of careful scrutiny. For starters, it’s only technically true to say Trump’s accounting work is handled by a large firm.

In fact, Trump entrusts his taxes and planning to a tiny, secretive team of CPAs who have operated at various times from humble quarters in Queens and two Long Island office parks. That team, which has had two leaders with back-to-back multidecade terms, has been working for the Trumps since Fred Trump began using the firm back in the 1950s. It was eventually subsumed into Mazars USA, the American arm of a large international firm, through a series of mergers over decades.

Listen to the Episode

One theme has been consistent: partners and sometimes the firm itself have faced accusations of fraud, misconduct and malpractice on multiple occasions, an investigation by ProPublica and WNYC has found.

That pattern dates to the 30 years during which the Trump accounting team was led by Jack Mitnick, whose pugnaciousness was exceeded only by his aversion to his clients paying the IRS. He was the architect of the notorious schemes, revealed by The New York Times, to dodge more than $500 million in gift and inheritance taxes and funnel hundreds of millions from Fred Trump to his children, helping keep Donald Trump afloat through four of his business bankruptcies. Mitnick was known as an accounting star — at least until 1996, when his partners threw him out of the firm amid accusations of fraud and malpractice.

Years of turmoil followed. The firm operated without malpractice insurance for a period and was dogged by feuds — with current and former partners suing each other — and financial problems.

And it ran afoul of regulators. In January of 2004 — one week after “The Apprentice” premiered on NBC — the Securities and Exchange Commission formally censured the firm for willfully aiding and abetting misconduct. The SEC suspended one partner from practicing before it for four years for what the agency called “highly unreasonable” and “improper professional conduct.”

Since Trump’s accountants merged their practice into Mazars in 2010, they have been present for Trump’s scandals, too. Mazars accountants prepared the tax returns for the Donald J. Trump Foundation, forced to shut down and ordered to pay more than $2 million in damages after a New York attorney general’s investigation exposed a history of illegal self-dealing. And the Manhattan DA’s office, which is investigating whether the Trump Organization falsified its business records to cover up hush-money payments to adult film actress Stormy Daniels, subpoenaed not only Trump’s tax returns but also various internal records and assessments prepared by Mazars.

Today, the CEO of Mazars USA is the same partner who was suspended by the SEC for four years for improper conduct. (Mazars defends its CEO, saying he meets all ethical and professional standards, and asserts that the firm has encountered no more sanctions or litigation than other comparable firms.)

The choice of a formerly suspended accountant as CEO surprised former SEC Chief Accountant Lynn Turner, now a senior adviser at the Hemming Morse financial consulting firm. “In my opinion,” said Turner, “that speaks loudly with the respect to the confidence one would have in that firm — better yet, the total lack of confidence one would have in that firm. And it would certainly make me wonder about the culture of that firm and whether or not that firm acts with integrity.”

---

Whether by design, or perhaps just coincidence, Trump’s accountants have occasionally displayed the sort of audacity often associated with their client. Consider this example involving New York City taxes back in the 1980s. Mitnick claimed that Trump was exempt from paying tax on profit he made by flipping a Trump Tower condo. He had acquired the unit at cost, $634,648, ostensibly for providing “consulting services” to his development partnership, then sold it 19 days later for $3 million.

At an administrative court hearing, Mitnick defended deductions that he’d claimed offset any profits from Trump’s consulting business, even as he failed to provide any documentation or explanation for those expenses, according to the 15-page court opinion in the case. He went so far as to deny that he’d prepared the federal tax return for Trump that also claimed the deductions, even though his signature was on the document.

The accountant evidently protested vociferously in the New York case, leading the administrative law judge to scoff, “The problem at issue is not one of double taxation, but of no taxation.” The total amount at stake was relatively modest — $87,693.57, including penalties and interest — but Mitnick, on Trump’s behalf, contested it for more than a decade before a city appeals panel finally put an end to the case, ordering Trump to pay up.

Decades after he left the Trump account, Mitnick briefly surfaced in the press in 2016, after the Times reported that Trump’s 1995 tax return reported a $916 million loss. Mitnick, then 80, dismissed Trump’s boast that he was a tax genius for using the loss to avoid paying taxes for as much as a decade. “I did all the tax preparation,” the dour accountant told TV interviewers. “He never saw the product until it was presented to him for signature.” Mitnick added, with apparent pride: “Those returns were entirely created by us.”

When ProPublica first sought to speak with Mitnick late last year, he asked, “What’s in it for me?” and said he’d discuss Trump only if he were paid for his time. (In a longer second call, where he also asked to be paid, he eventually offered brief responses to some questions.)

An accountant and attorney, Mitnick first arrived at Spahr Lacher & Berk, the tiny firm later merged into Mazars, in 1963, at age 27. Mitnick soon took charge of the Trumps’ accounts. He would oversee them for the next 30 years.

In its early years, Spahr was located in Jamaica, Queens, and employed just a handful of CPAs. The firm had been working with the Trump family, whose five-bedroom Tudor home was in tonier Jamaica Estates, at least since 1951, when Fred Trump cemented the relationship by hiring a Spahr partner as controller for his growing real estate business.

Fred Trump was far and away Spahr’s biggest client. His cash-spewing rental apartment empire in Brooklyn and Queens required lots of accounting work, and Fred paid his bills in full and on time. By 1979, Spahr Lacher had moved into a nondescript suburban office park in Lake Success, Long Island, just beyond the Queens border and the reach of New York City taxes.

By then Donald Trump had begun pursuing his big, risky and expensive ambitions: glitzy towers and hotels in Manhattan; three over-the-top Atlantic City casinos; his own airline; a massive yacht and a professional football team. In 1987, as his father had done, Donald hired his company’s controller from the ranks of his accounting firm.

Trump’s accountants played a critical role in Donald’s survival through the 1980s and early ʼ90s, a period when many of his projects crashed and burned, requiring massive infusions of cash from his father. With Mitnick in charge, Spahr hatched the strategies that minimized both gift and estate taxes on the transfer of Fred’s wealth to Donald and his siblings.

A 2018 Times investigation found that Fred Trump had funneled at least $413 million in current dollars to his son and that the Trumps’ tax-avoidance tactics, all told, had slashed their tax bill by about $500 million. The article described some of the tax moves as “outright fraud.” (Trump’s lawyer called that conclusion “100% false” and said the relevant authorities “fully approved all of the tax filings.”)

A lynchpin of the strategy was the 1992 creation of a corporation, All County Building Supply & Maintenance, through which Fred Trump’s children charged their father’s business grossly inflated prices, then split the markup, allowing them to avoid gift taxes even as they reeled in millions from their father.

The strategy was viewed as a major success inside the accounting firm. “I wish I could take credit for it,” Mitchell Zachary, a former Spahr partner who worked on the Trumps’ accounts for more than a decade, told ProPublica and WNYC. “It was brilliant, but it wasn’t mine,” Zachary said. “It was a team of accountants, partners at Spahr.” Zachary defended the firm’s practices for the Trumps as “aggressive” but “within the letter of the law.”

Mitnick was viewed as “a tax god” inside the firm, said Zachary, who worked at Spahr Lacher from 1986 to 2002 and teamed with Mitnick on the Trumps’ accounts. The family “wouldn’t make a move” without checking with Mitnick, he said. Mitnick even made a cameo appearance (albeit with his name misspelled) in the first chapter of Trump’s 1987 book, “The Art of the Deal.”

Mitnick pressed for every advantage on Trump’s behalf, ever urging Zachary to be bolder. A fundamental Mitnick principle: “If you can’t find me where the law says you can’t do it, you can do it.” Said Zachary: “He always took these very aggressive positions and would never back down. Never. He always felt, ‘I’ll just keep appealing.’”

Mitnick’s team developed virtually all the Trumps’ tax-avoidance maneuvers, Zachary said. “I mean, it was all for their benefit in so many ways,” he said. “It’s not like they were going to question it.”

Donald Trump’s accounting work was much more complex than that of his father. His business operated scores of separate entities, each requiring its own tax filings. Just preparing his annual personal return took three to four months.

Diving into Trump’s personal finances, as Zachary did in the late 1980s, proved bewildering. Warned that his work for Trump was sure to face an audit, Zachary said he took special care to trace every asset, expense and receipt. When he finally finished, he was mystified. Zachary couldn’t find evidence that Trump, in fact, possessed any cash beyond a recent payment in a casino deal.

“I went to Jack Mitnick, and I said, ‘Look, I must be missing something: There’s nothing here!’… I thought for sure I screwed up. I thought for sure I missed something big.”

Zachary recalled Mitnick’s reply. “He just laughed and went: ‘Well, you just figured it out!’”

---

Spahr took unusual steps to safeguard the confidentiality of Donald Trump’s returns. No work papers or documents could be left on a CPA’s desk overnight; everything had to be carefully locked up.

The secrecy was imposed to hide the chasm between Trump’s public claims and reality, according to Zachary: “He bragged a lot. … More than any other individual that I’ve ever seen, he was very big at promoting that he’s this super-rich billionaire.”

Trump was a difficult client. He demanded discounts on fees and took forever to pay his bills. “Collecting from Trump was awful,” Zachary said. Eventually Spahr agreed to give Trump a 50% discount and allow him 12 months to pay. Zachary said: “Donald always made it clear: ‘You get the privilege of saying you’re Donald Trump’s accountants, so you have to pay the price.’”

Trump’s nearly $1 billion write-off for 1995 represented an aggregation of the enormous losses his business blunders had run up — and Spahr skillfully exploited them on Trump’s behalf. Trump paid no federal income tax in nine of the 11 years from 1984 through 1994, according to tax materials obtained by the Times and publicly released documents.

It is true that the Trumps’ aggressive tactics drew virtually nonstop scrutiny from tax authorities. Indeed, they spent so much time examining the Trumps’ books, Zachary said, that Spahr Lacher had a special room permanently set aside for the IRS’s Trump auditors. (Zachary also cites this scrutiny, and the relatively modest resulting adjustments, as evidence that Spahr’s tactics didn’t cross the line.)

Spahr’s focus on wealth-transfer strategies intensified in the early 1990s, after Fred Trump, a detail-minded workaholic, began suffering from poor health and dementia. One tactic was to divide legal ownership of Fred’s properties into separate family partnerships, so Fred lacked complete control. That helped justify lowball appraisals for tax purposes. “There was an appraiser out there that the IRS hated … because he was so aggressive. And that’s the guy we used,” Zachary said. That appraiser, he said, reduced the claimed values of Fred Trump’s properties by 35% to 40% — and occasionally dramatically more.

By the time Fred Trump died in 1999, Mitnick was gone from the firm. His departure followed a series of troubling lawsuits and other setbacks relating to work for non-Trump clients. In one case brought over Mitnick’s administration of a tax-shelter investment involving coal mine leases, a federal appeals court wrote in 1985: “The record amply demonstrates that he committed fraud.”

In a second case, longtime Spahr clients charged Mitnick and the firm with “a long-term coverup of Mitnick’s malpractice” on their family’s estate and audit work, accusing them of missing filing deadlines and making false statements to the IRS, which they claimed cost the family millions in taxes and penalties. They asserted that Mitnick and his team neglected them and “devoted most of their professional time to other clients, including Donald Trump and his enterprises.” After the trial judge found that Mitnick was “the primary wrongdoer,” the matter was eventually settled for about $500,000, according to Mitnick’s deposition testimony in yet another malpractice suit against both him and the firm.

Mitnick, meanwhile, had his own problems with the IRS. He had filed three federal tax court cases between 1987 and 1990 challenging IRS levies against him and his wife on their personal taxes.

He became an enigma to his Spahr partners. Mitnick often seemed oblivious to important deadlines. One partner recalls finding Mitnick, just hours before a critical tax filing was due, in the firm’s staff room with a hammer and screwdriver, fixing a broken chair.

By the mid-1990s, the litigation had left Spahr Lacher unable to obtain insurance, threatening the firm’s continued existence. Partners, including Zachary, shifted their assets into their spouses’ names. Records show the Mitnicks’ home, located 2 miles from the firm’s office, was held in his wife’s name.

In September 1996, the partners expelled Mitnick. They told clients that Mitnick, then 60, was retiring. Less than a year later, he became a tax counsel with a Long Island law firm, where he remained until 2014.

Asked about these events, Mitnick, now 84, repeatedly declined to comment, saying he couldn’t discuss “confidential communications between myself and the client.” He added, “You’re going back to the dark ages.”

Mitnick eventually fell on hard times. In 2007, after Citibank filed a foreclosure action on an unpaid $500,000 mortgage loan, Mitnick and his wife sold their $1.4 million Long Island home. Three years later the IRS slapped him with a lien for more than $155,000 in unpaid federal tax debts dating back to 2003. Mitnick and his wife relocated to a modest house in Palm Beach County, Florida.

In May 2017 Mitnick and his wife were evicted after failing to pay $11,331 in assessments and penalties to their homeowners association. Their possessions were placed out on the street. Less than two years later, in March 2019, they were ejected again, this time evicted from an apartment for unpaid rent and, according to a court filing, “physically removed from the premises.”

---

At the time Mitnick left the firm, partners feared his departure might cost them the Trump business, which Zachary estimates represented about a third of the firm’s total billings. But Trump agreed to stick with Spahr.

Still, the firm’s existence was precarious. Unable to obtain malpractice coverage, Spahr’s eight partners, after being hit by another lawsuit settlement, learned they would have to dig into their own pockets to pay it.

So they happily welcomed an acquirer: M.R. Weiser & Co., a midsize Manhattan accounting firm eager to establish a big presence on Long Island. Spahr’s leaders signed off on the deal only after again seeking Trump’s personal blessing. He gave it, Zachary said, after being assured his fees wouldn’t increase.

As it turned out, Weiser had problems of its own. The firm had engaged in a disastrous buying binge aimed at transforming the firm into a regional powerhouse. The deals instead triggered what partners later described as a “crisis of finances and morale.” Just a year after swallowing Spahr, Weiser’s partners ousted the firm’s chairman, Stanley Nasberg, who then sued, demanding $5 million in damages and sending the dispute to an arbitration panel. (In an interview, Nasberg maintained he was “instrumental” in the rapid growth of the firm and recruitment of major clients. He blamed his ouster on the “greed” of his then-partners.)

The 24-page report from the arbitration panel detailed a litany of “recriminations and factual and legal disputes.” The firm had suffered such “acute cash shortages” that some senior partners had delayed depositing their year-end paychecks in 1999; partner draws had been withheld altogether in early 2000.

For years Weiser was roiled by factional conflicts, cash-flow problems and bitter litigation. “It became just a disjointed mess,” said Jeff Coopersmith, a partner who arrived in 1999 as the result of one merger and was frog-marched out six years later after the firm discovered his plans to start his own firm with two other partners (and take clients with him).

Amid all this turmoil, the Trump group remained a constant. With Mitnick’s departure, the firm handed its leadership to a CPA who seemed even more single-mindedly dedicated to the mogul: Donald Bender.

Bespectacled, bald and bookish, Bender had arrived at Spahr in 1981, shortly after earning his accounting degree at Queens College. He’s been there ever since. (Through a firm spokesman, Bender declined requests for an interview.)

Bender had a monkish devotion to his work, and to Trump, who became his sole client. Bender remained single well into middle age, when he married a woman who’d worked at Weiser. Now 62, he still runs the Trump account and lives with his family in a drab townhouse, six minutes’ drive from his office.

Bender’s dedication won Trump’s respect, said Zachary, who worked closely with Bender until leaving the firm in 2002. “He really devoted his life to Donald Trump,” Zachary said, enough to earn him an invitation to Trump’s wedding to Melania Knauss at Mar-a-Lago in 2005.

Operating from offices at one end of the accounting firm’s floor, Bender and his small Trump team kept to themselves. It had long been standard practice to maintain extraordinary security provisions for all of Trump’s electronic files, including barring anyone from viewing them without a special password.

Bender’s group had a mystique within the firm. In a 2017 essay published on a literary website, a former junior accountant at Weiser, Henry Kogan, recounted meeting Bender — whom he referred to as “the other Donald” — in the firm’s cafeteria. “After I introduced myself and the small talk subsided he said, ‘Everything you say will be repeated.’… In my two years at Weiser LLP, I learned the other Donald didn’t talk much but when he did it was worth listening to.”

Kogan described the knowledge of Trump’s financial world as “passed down from one generation to the next through a single, chosen accountant, orally.” As he put it, “You could sense the weight of this knowledge in the way [Bender] walked, the way he carried himself, carefully and with precision. Sometimes it seemed as if he were moving across a tightrope, invisible across the thickly carpeted office floor.” Bender’s “entire professional existence,” he wrote, “revolved around one client, that client’s organization, and the hundreds of entities represented inside an IRS form.”

---

As Trump banked evermore on his image for breathtaking wealth, he enlisted his accountants to back his dubious claims. For example, struggling to avoid personal bankruptcy in 1994, Trump cooperated with a cover story in Vanity Fair promoting his “comeback.”

“Piece by piece, deal by deal, a beautiful story is starting to emerge about me,” Trump declared, after picking up writer Edward Klein in his stretch limo. As they were driven to a black-tie dinner at the Waldorf-Astoria hotel honoring Trump as “Humanitarian of the Year,” Klein wrote, “he handed me a folder containing his personal financial statement, which had been prepared by the accounting firm of Spahr, Lacher & Sperber.” It showed $139,326,000 in cash and equivalents.” That figure seemed unlikely given that four of Trump’s companies had gone bankrupt during the early 1990s.

Similar documents surfaced in 2006, after Trump was stung by a book written by Tim O’Brien that ridiculed his boasts of being worth as much as $6 billion. The book, “TrumpNation: The Art of Being the Donald,” cited three confidential sources “with direct knowledge of Donald’s finances” who said the number was actually between $150 million and $250 million.

Looking to rehabilitate the image of his net worth — on Forbes’ annual list of billionaires — Trump enlisted his accountants. He summoned two Forbes reporters, according to one of them, Stephane Fitch. They arrived at his Trump Tower conference room to find a table piled with leather-bound volumes and stacks of manila folders, supposedly documenting how much Trump was worth. Also present, to help make the case: Bender and his Weiser partner Gerald Rosenblum. The two accountants sat silently as Trump and his deputies touted his wealth. Forbes ultimately pegged it at $2.9 billion — about half of what Trump claimed — but far higher than O’Brien’s assessment.

Trump sued O’Brien for defamation, and in the litigation, too, the accountants and their work played a supporting role. A 25-page document, on Weiser letterhead, titled “Accountants Compilation Report” was produced during discovery. (“I do keep one actually on my desk, hidden,” Trump testified during the case.) A two-page disclaimer explained that the report (which claimed a net worth of $3.5 billion) was based entirely on “the representation of the individual whose financial statements are presented.” In other words, all the numbers came from Trump.

Trump made clear just how unreliable that was, at one point testifying during his deposition: “My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feelings.” Asked if he’d ever exaggerated in statements about his properties, Trump replied: “I think everyone does.”

The disclaimer on the “compilation” noted that Weiser had done nothing to confirm the unaudited numbers, which included wholesale departures from generally accepted accounting principles (GAAP). In particular, the statement acknowledged counting future income streams that were in doubt; excluding much of Trump’s debt; failing to reflect whether Trump actually owned only a portion of the assets he listed; and ignoring both repayment obligations and whatever taxes he owed.

Weiser did sometimes prepare GAAP-compliant audited financial statements for Trump, when required by some lenders and regulators. These statements revealed a lower net worth. So Trump shared the “compilation” documents with reporters instead.

O’Brien’s lawyers deposed the two Weiser partners who worked on the Trump document. Asked to explain a memo he’d written calling Trump’s valuations on properties “subjective,” Bender demurred: “I don’t have the professional expertise to discuss valuations.” Rosenblum, who said he had been preparing such statements for Trump since the early 1980s, was more direct. “In the compilation process, it is not the role of the accountant to assess the values,” he testified. “The role is to accept those values and move them forward.” He acknowledged he made no attempt to corroborate any of the figures. (A judge granted O’Brien a summary judgment, later upheld by an appeals court, in Trump’s libel suit.)

Trump continued to offer selective financial statements. If anything, the list of recipients seemed to grow, to include banks and insurance companies, according to congressional testimony last year by former Trump lawyer Michael Cohen, shortly before he went to prison. Cohen released copies of Trump’s financial statements for 2011, 2012 and 2013 and testified: “It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes.”

By this point, Mazars had become his accountants of record (the Weiser merger occurred in 2010) and the disclaimers in the financial statements had grown to exclude anything involving the finances of Trump’s large hotels in Las Vegas and Chicago. The 2011 and 2012 statements placed Trump’s net worth at $4,261,590,000 and $4,558,680,000, respectively.

They included multiple false claims. As The Washington Post reported last year, the 2011 statement claimed Trump Tower was 68 stories tall (it’s 58); exaggerated the size of Trump’s Virginia vineyard (it’s 1,200 acres, not 2,000); inflated the number of lots approved for sale at his golf course in southern California (it was 31, not 55); and claimed a 212-acre Westchester County estate he’d bought in 1996 for $7.5 million was already “zoned for 9 luxurious homes” and thus worth $291 million. Local officials said the property was really worth about $20 million, and the project, which faced years of opposition from area residents, was never built. Trump took a tax write-off on the property instead. These false statements alone appear to have inflated Trump’s claimed wealth by hundreds of millions.

Once again, when Trump announced his campaign for the presidency in gala fashion in 2015, he waved a financial statement that he said his accountants had prepared. This time the tally was $8,737,540,000.

“To pay an auditor to say ‘we have not checked the numbers, and the numbers don’t follow any rules’ — you just don’t see that,” said George Washington University assistant accountancy professor Kyle Welch. “This is not a real financial statement. This is a promotional document.” Welch said the sweeping disclaimer protects the accountants from legal liability or industry sanctions.

He doubts a larger firm would have been willing to affix its name to such statements. “I don’t think any of the Big Four would put their name on those financial statements,” Welch said. “I don’t think they could have been paid enough to get it done.”

---

Not long after it acquired Trump’s accounting firm, Weiser came under investigation by the SEC. The matter was resolved in 2004, with an agreed settlement order: Two Weiser CPAs were suspended from practicing before the commission for “highly unreasonable” and “improper professional conduct.” The SEC also censured Weiser, ordering it to disgorge $39,679 and hire an outside consultant to review its policies and compliance procedures.

According to the SEC, Weiser had failed to properly monitor its client, a financial advisory firm called Sagam Capital Management, that was already operating under a cease-and-desist order for securities fraud and thus, as Weiser knew, warranted “heightened scrutiny.” These failures, the SEC found, had “willfully aided and abetted” more misconduct. (Sagam’s CEO later went to prison for stealing millions from his customers.)

Victor Wahba, the Weiser partner in charge of the assignment, was barred from SEC practice for a minimum of four years. (He didn’t admit or deny wrongdoing.) But Wahba remained at the firm, and was promoted, just one year later, to run its New York office. In 2012, 15 months after being reinstated by the SEC, Wahba was named co-CEO of Mazars. He became chairman and CEO of Mazars USA in 2015.

Wahba declined requests for an interview, but Mazars provided a statement that read, in part: “Under Victor Wahba’s leadership, Mazars USA has become a national leader in tax, accounting and consulting. He is well recognized as a thoughtful and charitable CEO.” It noted that Wahba now “remains in good standing” with various industry and government regulators, including the SEC.

Trump’s accounting firm faced other issues. In 2009, a partner received a three-year SEC suspension for secretly negotiating for a high-level job with a client he was then auditing. The SEC called the partner’s conduct “at a minimum, reckless.” He eventually left the firm.

In separate, more recent cases, the U.S. attorney’s office in Manhattan prosecuted two other CPAs who worked at the firm for their involvement in illegal tax shelters.

Ronald Katz, a partner at Weiser for five years starting in 2004, received a nine-month prison sentence in 2017 after pleading guilty to conspiring with a New York tax attorney in what federal prosecutors described as a “corrupt multi-year tax evasion scheme.” Katz had been indicted, among other offenses, on charges of failing to pay taxes on $1.2 million in fee income while at the firm. Internal firm financial documents show that for 2004, Katz billed $6.6 million in fees, far more than any other partner in the firm. Katz declined to comment.

In August 2019, New York federal prosecutors settled a civil complaint against former Mazars senior manager Michael Schwartz. In legal filings, prosecutors said he had arranged for more than 100 taxpayers to claim “large phony tax losses,” cheating the government out of hundreds of millions of dollars in taxes. (The shelters dated back to 2002, but were already under court challenge by the government when Mazars hired Schwartz in 2008.) In 2010, a federal appeals court found that one of Schwartz’s transactions, which allowed a tech executive to shelter $60 million in stock gains with an investment of less than $1 million, was “specifically designed to create a massive tax loss devoid of economic reality.”

Despite this, Schwartz remained at the accounting firm until 2015, just weeks before the IRS assessed him for $35.4 million for promoting unregistered fraudulent tax shelters. After filing for bankruptcy, Schwartz settled the IRS claim by agreeing to pay $650,000. (“This had nothing to do with WeiserMazar,” Schwartz said. “This was all activities done way before I joined the firm. They knew about it. But they hired me for my international tax expertise.”)

In its statement, Mazars dismissed the notion that it had a troubling record. “Any suggestion that Mazars USA is an industry outlier with regard to its business practices or litigation history is false and misleading. Even a cursory review of the history of any large accounting firm or business will reveal the inevitability of litigation. Our history is no different than any other similarly situated firm.”

Mazars declined to respond to a long list of questions regarding its work for the Trumps, citing the need to protect client confidentiality. Its statement noted, “Mazars USA prides itself on providing professional accounting, audit and consulting services in accordance with all professional and ethical standards, rules, and regulations.”

---

Because it handles virtually all the tax and accounting needs for Donald Trump, Mazars has inevitably found itself immersed in more recent controversies surrounding its famous client.

This extends to the Donald J. Trump Foundation, whose annual tax returns Bender has regularly prepared and signed. For 2016 and 2017, before the foundation’s dissolution, Mazars also audited its financial statements, filed with the New York attorney general’s office. Among these documents, there is no indication the firm did anything to spotlight or curtail the financial abuses that eventually forced the charity’s shutdown.

The Mazars accountants were complicit in the foundation’s illegal practices, according to Marcus Owens, an attorney and expert in nonprofit law who ran the IRS’ exempt-organizations division for a decade. “I cannot fathom how they would not know,” he said. Owens called the firm’s role in the foundation’s misconduct “extraordinary. ... I’ve been practicing charity law for 45 years, including 25 at the IRS, and I’ve never seen anything like it.” Added Owens: “This is aiding and abetting someone doing something that is in clear violation of federal tax law. It really calls into question what’s going on with every other tax return that firm prepared.”

Mazars’ role, if any, in the Stormy Daniels hush money scandal remains unclear. As ProPublica has reported, the Manhattan DA’s office is investigating whether the Trump Organization’s payments, falsely reimbursed to Michael Cohen as a “legal retainer,” represented an illegal falsification of the company’s books and records. It is not evident what Mazars, in preparing its tax filings and auditing its books, knew — or should have known — about this.

But it is clear that the investigation by Manhattan DA Cyrus Vance extends far beyond the scope of that 2016 episode. Vance’s grand jury subpoena seeks tax returns, work papers, financial statements and communications dating back to 2011. If the Supreme Court affirms two federal lower court rulings that he should get them, Vance’s investigators will be free to look for evidence of other potential crimes.

For all the anticipation about the documents being sought by both the criminal prosecutors and Congress, it is possible that the public may never see them even if the Supreme Court orders Mazars to turn over the records.

In Vance’s investigation, requirements for grand jury secrecy will prevail unless the documents lead to criminal prosecutions. It’s also not clear whether the congressional committees would make public any Trump records.

The greatest revelations also may not be contained in the tax returns themselves, which will lack detail about Trump and his businesses, but in the thousands of pages of other materials that Congress and the DA have also subpoenaed. These include the hundreds of corporate returns, also prepared by Mazars, detailing Trump’s investments, his debts, his sources of income and his partners. Equally important, the accountants’ work papers and communications with the Trump Organization could reveal unguarded internal assessments and exchanges about his finances.

The Supreme Court fight may end with a whimper. On April 27, the court hinted that it may be looking for a way to punt at least part of the three cases involving Trump’s tax records: It asked the parties to submit supplemental briefs to answer effectively whether the court should even be trying to resolve the two cases in which Congress has subpoenaed the records. (This would not affect the third case, involving the Manhattan DA). The question, as Scotusblog characterized it, is “whether courts should stay out of the fight over the subpoenas because it is fundamentally a political dispute between the branches of government. If the justices were to conclude that the doctrine applies, they could dismiss the cases without ruling on the merits of the dispute — which might be a particularly appealing outcome for some justices in the lead-up to the presidential election.”

Such a decision would clear the way for Mazars and Trump’s banks to comply with the congressional subpoenas if they chose to do so — but would provide no judicial means of enforcement, according to University of Texas law professor Stephen Vladeck, a Supreme Court expert. (Asked about such a Supreme Court outcome, a Mazars spokesman said the firm stands by its previous statement that it will “respect the legal process and fully comply with its legal obligations.”) That would provide for a much less stirring conclusion than, say, a unanimous high-court opinion declaring that the president is not above the law.

But the court could still affirm the third case, in which federal courts ordered Mazars to turn over the returns to the Manhattan DA. If Mazars then complies with that subpoena, that will leave the firm in good graces with the court — but likely facing the wrath of its client of many decades, the president of the United States.

Adults with non-valvular atrial fibrillation prescribed apixaban have a lower rate of ischaemic stroke and systemic blood clots compared with those prescribed rivaroxaban, according to a retrospective cohort study in Annals of Internal Medicine.

To read the whole article click on the headline

Biotech venture funding metrics continue at historic highs, highlighting that the robust financing environment in the public markets continues to fuel the private markets as well.  – Bruce Booth, partner Atlas Venture in Data Snapshot: Venture-Backed Biotech Financing Riding High, April 2015 Here in Madison, Wisconsin, you might not know that was true if you

On Friday 3 April 2020 it finally happened: the Commission proposal for amendment of the MDR to defer the date of application with a year that everyone was waiting for and was in the works for some time was finally published. As I have heard from many directions immediately after the announcement of the proposal being […]

If you factor in a potential undercount of furloughed workers, nearly 1 in 5 working Americans may be in line for unemployment benefits.

Rajasthan signed a MoU with HPCL over the reworking of Barmer refinery in the state. The deal was finalised in the presence of Rajasthan’s CM Vasundhara Raje.

The financing will help Varthana reach more schools by meeting its need for longer-term capital.

The post Indian financier Varthana secures $15m debt financing from DFC appeared first on DealStreetAsia.