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Days before an expected final judgment in a fraud case that could imperil Donald Trump’s sprawling business empire, a court-appointed monitor overseeing his businesses reported financial disclosures that are “either incomplete, present results inconsistently,” or “contain errors.”

One of those findings, according to her report, appears to suggest that the former president evaded taxes on millions of dollars in income by hiding money in fake loan transactions.

Mr Trump and his associates have been cooperative throughout the months-long monitoring process, former federal judge Barbara Jones wrote in her 12-page report on Friday. But one detail in a footnote halfway through the letter to New York Judge Arthur Engoron appears to allege that the former president not only repeatedly lied about his net worth and assets, as alleged by the state’s attorney general, but that a major $48m loan for one of his brand-building properties may have never actually existed.

“When I inquired about this loan, I was informed that there are no loan agreements that memorialize the loan,” Ms Jones wrote, “but that it was a loan that was believed to be between Donald J Trump, individually, and Chicago Unit Acquisition,” the name of Mr Trump’s LLC that took on the debt for his Trump International Hotel and Tower in the Windy City.

“However, in recent discussions with the Trump Organization, it indicated that it has determined that this loan never existed – and thus that it would be removed from any upcoming forms” submitted to government agencies and in corporate financial statements, she wrote.

The report strikes at a mystery that has bounced around for several years: Mr Trump has reported in financial statements that he owes “over $50m” to Chicago Unit Acquisition LLC, an entity that Mr Trump owns, and thus has owed a substantial sum of money to a company he controls.

“Yes, the loan existed,” according to Alan Garten, chief legal counsel for the Trump Organization, speaking to The Daily Beast, which first reported the $48m detail. “That’s one of many inaccuracies contained in the monitor’s letter, which we will be addressing with the court,” he said.

He called the loan arrangement an “internal loan” wherein Mr Trump loaned money “to the entity that he owns.”

But Mr Trump claimed in a financial statement as recently as October that the arrangement was the opposite, listing debts to Chicago Unit Acquisition as more than $50m.

In 2016, Mr Trump confirmed that arrangement in an interview with The New York Times, claiming that he bought back the loan from “a group of banks several years ago,” and that he pays interest on it to himself, despite the LLC’s “practically worthless” valuation.

“We don’t assess any value to it because we don’t care,” he said at the time. “I have the mortgage. That is all there is. Very simple. I am the bank.”

In 2018, Mother Jones reported Mr Trump may have fabricated the loan to make it appear that his LLC owed debt that had already been forgiven, allowing him to evade taxes on $48m of cancelled debt. The letter from the court-appointed monitor in the fraud case, six years later, could bolster that central claim that the loan never existed.

Such a deal appears to have been arranged in the aftermath of the 2008 financial crisis, while Mr Trump was loaded down with tens of millions of dollars in debt from his Chicago project. Mr Trump appeared to have one of the principal entities funding that project – a firm called Fortress – agree to cancel half his original $100m loan.

That deal would qualify as $48m in reportable, taxable income; Mr Trump made it appear that he bought the loans back instead. Through this arrangement, Mr Trump appears to have instead pocketed the $48m in cancelled debts and constructed a “loan” as cover, according to tax experts who spoke with The Daily Beast.

“All applicable taxes were fully paid years ago,” a spokesperson for the Trump Organization told The Independent.

“The allegations contained in the Daily Beast story have no basis in fact and are a complete fabrication made out of whole cloth.”

Forbes reported in 2020 that Mr Trump doesn’t appear to pay any interest on the loan and lists the Chicago LLC as having no value – despite reportedly issuing a $50m loan. “There should be an offsetting entry somewhere,” Harvard real estate professor Richard Peiser told Forbes at the time. “I can’t explain that.”

A letter from the Trumps’ family attorney to Judge Engoron on Monday blasted Ms Jones’s report and called her claim about the Chicago loan a “demonstrable falsehood” and a “deliberate mischaracterization”. He said that the Trump Organization never told Ms Jones that the loan didn’t exist, but that “no liabilities or obligations are outstanding” under the loan,” according to his letter.

He characterised her latest report as an “unabashedly self-serving statement” aimed at trying to preserve her position to continue charging “exorbitant fees.”

The report “issued mere days before an expected decision ... has only two obvious purposes,” attorney Clifford Robert wrote. “[E]nsure the monitor continues to receive exorbitant fees … and fill the gaping hole in the attorney general’s case, namely, that there is no basis to support continued oversight.”

He characterised the monitor’s letter as part of what he called her “disingenuous and self-interested efforts to frame” Mr Trump and his co-defendants “in a false light to sustain her continued appointment.”

“The monitor’s reports merely posit a host of minor discrepancies framed out of context simply to identify something, anything, to justify her exorbitant fees,” he added. “But where, as here, more than one year of detailed and expensive oversight reveals not a single instance of the alleged misconduct the monitor was expressly appointed to uncover, the monitor serves no demonstrable purpose going forward.”

The Independent has requested additional comment from attorneys for Mr Trump and the Trump Organization.

A forthcoming decision from Judge Engoron in the civil fraud case follows a 2022 lawsuit from New York Attorney General Letitia James alleging more than a decade of fraudulent financial statements used to gain and maintain favourable financing terms for his star-making properties.

The judge’s damning pretrial judgment determined that the former president, his two adult sons and their chief associates had grossly overvalued assets and exaggerated his net worth to secure those deals from banks and lenders. He ordered his licenses to be rescinded and effectively blocked him from doing business in the state while a court-appointed monitor oversaw his companies’ operations and liabilities.

An appeal has put the judge’s sanctions on hold, but a judgment finding Mr Trump and his co-defendants liable for fraud as outlined in the blockbuster lawsuit left a trial to determine how much they owe, if anything.

Ms James’s office is seeking $370m in so-called “ill-gotten gains” from the result of fraudulently obtained financing terms that banks would have received if they used rates that reflected Mr Trump’s actual net worth and assets, according to the attorney general’s office.

She also wants to ban Mr Trump from New York real estate for the rest of his life, and to block Donald Trump Jr and Eric Trump from the industry for at least five years.

Following 11 weeks of witness testimony that first began in October, followed by closing arguments earlier this month, Judge Engoron is expected to deliver a final judgment by the end of January.

A decision is expected to arrive just days after a federal jury verdict found Mr Trump on the hook for $83m for his ongoing defamation of E Jean Carroll. A separate jury had previously found Mr Trump liable for sexually abusing Ms Carroll and then smearing her allegations as a lie, which fuelled abusive messages and death threats against her.

The latest decision adds to Mr Trump’s growing list of legal liabilities, including 91 criminal charges stemming from four separate federal and state-level charges for alleged crimes committed while in office.

He has pleaded not guilty in all cases.

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