“If they passed on phony costs to tenants, they should lower our rents,” he said.
The Times’s investigation of the Trump family’s finances, based on a vast trove of tax returns and confidential financial records, found that Donald Trump, contrary to his lifelong claim of being a self-made billionaire, received the equivalent today of at least $413 million from his father.
That fortune was greatly increased by dubious schemes — including instances of outright fraud — designed to dodge gift and estate taxes, the investigation found. Mr. Trump was a central player in the formulation of those strategies, which included grossly undervaluing his father’s apartment complexes in tax filings, interviews and records showed. He also received tens of millions of dollars in gifts from his father that were disguised as loans or business investments.
Mr. Trump and his brother Robert did not respond to requests for comment for this article. But in a written statement for The Times’s original piece, one of the president’s lawyers, Charles J. Harder, said that “there was no fraud or tax evasion by anyone,” and that Mr. Trump had delegated tax matters to relatives and tax professionals.
The most overt fraud uncovered by The Times involved the sham corporation, All County Building Supply & Maintenance, created by the Trumps in 1992. It appeared, on paper at least, to be a purchasing agent for Fred Trump’s buildings.
In reality, the creation of All County did not change how Fred Trump’s business functioned. He and his executives continued to negotiate prices for everything from roofs to window cleaner, but vendors began receiving checks from an All County bank account. Fred Trump’s apartment buildings then reimbursed All County, with an extra 20 to 50 percent tacked on.
All County was owned by Donald Trump, his three siblings and a cousin. In some years, the amounts distributed to each Trump sibling ballooned to nearly $1 million, records obtained by The Times show.
Because All County performed no real work, the transfer of money through the corporation was essentially a gift that evaded the 55 percent tax in place at the time, tax experts told The Times.
His buildings share a uniform austerity. Most are six-story brick rectangles with incongruously aristocratic sounding names — Saxony Hall, Westminster Apartments, Green Park Essex. His largest projects were sprawling complexes with acres of lawn in and around Coney Island — Beach Haven, Shore Haven and Trump Village.
The folk singer Woody Guthrie took an apartment at Beach Haven in 1950. He wrote a song called “Old Man Trump,” contemplating the morality of paying rent to someone who would not allow blacks to live in the building. The chorus began:
Beach Haven ain’t my home!
I just can’t pay this rent!
My money’s down the drain!
And my soul is badly bent!
Mr. Leitner, 69, remembers that when he signed his first lease at Beach Haven in 1996, the rent was significantly higher than the one quoted during his apartment hunt.
He recently obtained the official rental history of his apartment from the state at the request of The Times. It shows that his initial rent was $728, an increase of $154 from the prior tenant’s rate. Most of that jump, in fact, was because of the improvement costs.
The effect of those costs was compounded through the years, as every approved rent increase built upon the starting point. And while some portion was certainly legitimate, even a $10-a-month increase because of a padded All County invoice would mean that Mr. Leitner had given his landlords at least $3,800 more than they were legally entitled to over the past 22 years.
Housing advocates have long argued that there is widespread abuse of the two programs that owners of rent-regulated apartments use to raise rents based on improvements or repairs. Two Albany lawmakers introduced legislation last August that would end one, known as Major Capital Improvements.
“The M.C.I. program has been subject to abuse by landlords for years — the fact the Trump family did it just highlights that,” said one of the lawmakers, state Senator Michael N. Gianaris, a Queens Democrat. “It’s time to scrap the program.”
Because the increases carry forward, even tenants who moved in years after the Trumps sold the last of their father’s empire in 2004 were affected by the family’s invoice-padding scheme.
This content was originally published here.