An accounting expert for his defense says Donald Trump warned lenders certain financial documents strayed from common accounting rules, according to a report on the former president's $250 million civil court trial.
Jason Flemmons testified Wednesday that Trump disclosed that about 95 percent of assets listed in a 2014 financial condition statement did not adhere to generally accepted accounting principles, or GAAP, ABC News reports.
“In the statement of financial condition, how many GAAP departures are disclosed in the compilation report?” Trump’s attorney asked, according to Messenger senior legal correspondent Adam Klasfeld.
Replied Flemmons, “There are quite a few.”
This testimony aligns with the Trump team’s defense that lenders knew he departed from GAAP and it was their responsibility to assess the value of his assets, ABC notes.
But Klasfeld notes Judge Arthur Engoron rejected this defense before the trial began.
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“A defendant may not rely on a disclaimer for misrepresentation of facts peculiarly within the defendant’s knowledge,” Engoron wrote in the ruling, shared by Klasfeld.
“Here as valuations of the subject properties are, obviously, peculiarly within the defendants’ knowledge, their reliance on them is to no avail.”
Flemmons, an accounting expert formerly with a "Big Four" accounting firm, argued that experts should and do consider how worth was estimated, according to Law360’s white-collar crime reporter Stewart Bishop.
“The accounting firm is obligated to understand the methods being used and consider the appropriateness of the methods being used for asset valuation,” Flemmons reportedly said.
“To the extent they’re not, the [accounting] standards require them to follow up....and [report it] on the statements of financial condition if they are inconsistent with GAAP.”
