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Tucked into a footnote in a letter written by former federal judge Barbara Jones, the court-appointed special monitor overseeing Donald Trump’s New York business fraud case is a bombshell that appears to indicate the former president may have engaged in massive tax evasion, according to a new report released by The Daily Beast.

The letter, first reported by The Messenger, was delivered Friday to update Manhattan Supreme Court Justice Arthur Engoron on Jones’ findings while reviewing the former president’s business dealings through his company, the Trump Organization.

In it, Jones writes that the financial information filed to her by Trump’s team has contained “incomplete” or “inconsistent” disclosures containing multiple “errors.” However, she describes Trump and his businesses as “cooperative” with her investigation.

But buried in the sixth footnote of the 12-page letter is what the Daily Beast indicated is a clue that Trump may have evaded taxes on $48 million in income, with Jones writing that the massive sum — which Trump has claimed for years that he owes as a debt to one of his companies — never existed.

“When I inquired about this loan, I was informed that there are no loan agreements that memorialize the loan, but that it was a loan that was believed to be between Donald J. Trump, individually, and Chicago Unit Acquisition for $48 million,” Jones wrote.

She added: “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 the Office of Government Ethics (OGE) and would also be removed from subsequent versions of MAML,” Jones wrote, referring to corporate financial statements filed by the company.

Jones and Trump Organization attorney Alan Garten did not immediately respond to requests for comment from Business Insider. A ‘pretty brazen’ plot

Garten told The Daily Beast an “internal loan” wherein Trump “leant money to the entity that he owns” does exist.

“That’s one of many inaccuracies contained in the monitor’s letter, which we will be addressing with the court,” Garten told the outlet.

However, per the Daily Beast, as recently as October, Trump has claimed in financial disclosures that he owes the sum to his company, Chicago Unit Acquisition LLC, listing his debt as more than $50 million.

The discrepancies, if true, would indicate that the disclosures Trump has filed with the federal government were intentionally submitted with inaccuracies related to the debt equating to tens of millions of dollars. “It would appear, assuming Judge Jones’ letter is accurate, that this amounts to tax evasion,” Martin Lobel, a tax lawyer, told The Daily Beast.

He added: “This explains why the Republicans have been so intent on cutting the IRS’s budget, because they don’t want it to be able to audit transactions like this.”

The $48 million central to this issue has been scrutinized before. In 2016, the then-candidate for president told The New York Times that he purchased an outstanding loan from several banks he owed money to and, instead of retiring it, chose to keep the debt outstanding and pay interest on it to himself.

However, in 2019, Mother Jones reported a significant portion of Trump’s debt was forgiven by the hedge fund he owed money to after he paid about half of it.

So, instead of paying income taxes of up to 39% on the forgiven debt, the outlet reported, Trump “invented a loan — and then parked it.” Debt parking is the process of purchasing debt using a corporation to avoid paying income taxes on it. The maneuver is legal as long as the borrower intends to repay the loan but is illegal to engage in indefinitely.

Adam Levitin, a Georgetown University law professor specializing in commercial real estate finance, told Mother Jones at the time that the plot was “pretty brazen,” adding: “if he didn’t actually buy the loan, this is just garden-variety fraud.”

“While the reasons behind claiming this fake loan are still unknown, at the very least he misled the government for years about his finances,” Jordan Libowitz, communications director at Citizens for Responsibility and Ethics in Washington, told The Daily Beast. “It appears that Trump knowingly and intentionally broke the law. The only question is how many laws.”