Donald Trump should never have been allowed to view the White House lawn from any vantage point except a television set hooked up for the inmates in the common room of a state penitentiary. According to the New York Times, before he engaged in defrauding investors through his Trump University scam, before his habitual, pre-Declaration of Bankruptcy stiffing of his employees and contractors , even before his off-camera antics harassing or sleeping with various women and paying them for their silence, the current Occupant of the Oval Office was engaged in ripping off the tenants of properties owned by his father, and pocketing the profits.
They were collateral damage as Donald J. Trump and his siblings dodged inheritance taxes and gained control of their father’s fortune: thousands of renters in an empire of unassuming red-brick buildings scattered across Brooklyn, Queens and Staten Island.
The Times investigation of the latest in Trump’s seemingly bottomless history of perpetrating frauds and scams to bilk people out of their money details Trump’s jacking up the rents of thousands of middle-class residents who had the misfortune to live in one of the Trump-family owned apartment residences during the 1990s. Many of these properties had been financed by Fred Trump through low-cost government loans and were therefore subject to rent regulation.
But the residents of these thousands of apartments, many of whom were retirees living on a fixed income, suddenly began to see inexplicable rises in their regulated rents.
As it turned out, a hidden scam lurked behind the mysterious increases. In October, a New York Times investigation into the origins of Mr. Trump’s wealth revealed, among its findings, that the future president and his siblings set up a phony business to pad the cost of nearly everything their father, the legendary builder Fred C. Trump, purchased for his buildings. The Trump children split that extra money.
The “padded costs” translated into higher rents imposed on these tenants, as the younger Donald and his partners could point to the increased costs of maintaining them. Except the costs were phony—Trump and his family continued to negotiate for “everything from roofs to window cleaner,” according to the Times report. The costs were inflated through a sham organization ostensibly created (on paper alone) as a “purchasing agent” for Fred Trump’s properties, and it was owned by Donald Trump, his siblings, and a cousin. The “purchasing agent,” called “All County Building Supply and Maintenance,” (or “All County BS,” for short?), would issue checks to vendors servicing Trump’s buildings but would receive reimbursement from Fred Trump’s apartments with a 20-50% markup. The “markup,” which actually represented a tax-free “gift” to Trump and his cohorts, was then used to justify gouging apartment dwellers in Trump’s buildings with higher rents.
These fraudulently jacked up rents amounted to an increase of 30-60$ per month on a yearly basis, which many renters could doubtless afford. But as the Times points out, the “padded invoices still affect the rent, as the increase has compounded over the years:”
The padded invoices have been baked into the base rent used to calculate the annual percentage increase approved by the city. The sum total of the rent overcharges cannot be calculated from available records. As a way to appreciate the scope of the impact, a onetime $10 increase in 1995 on all the 8,000 apartments involved would put the total overpaid by tenants at more than $33 million to date, an analysis of approved rent increases shows.
All of these profits inured to Donald Trump and his family. The renters who were overcharged, like all victims of Trump’s schemes, were left holding the bag. Some are suing, but their rights are limited by both the statute of limitations and limitations on damages, as well as the fact that many of the properties have since been sold, with the Trump family moving on to bigger and better scams.
Michael Grinthal, supervising lawyer with the Community Development Project at the Urban Justice Center, a nonprofit legal services and advocacy group, said that the current owners would be held responsible for any damages, but that those owners could have a claim against the president and his siblings.
“If I was talking to those tenants right now, I’d say: ‘Do it. Go,’” Mr. Grinthal said. “This case should be fought.”
Meanwhile Donald Trump is heading out on his 16 day vacation to Mar-a-Lago, where he can spend some quiet time figuring out other ways to rip people off.