The majority owners of the former Trump Panama hotel — who last year removed President Trump’s name and cut ties with his company — say they have discovered old financial records showing that the Trump Organization was evading Panamanian taxes, according to a legal filing.
That filing was made Monday in federal court in New York by Orestes Fintiklis, a Cypriot investor whose company is the majority owner of the building that once housed the Trump Ocean Club in Panama City. A spokeswoman for the Trump Organization denied the allegations.
In March 2018, Fintiklis sought to fire the Trump Organization as the hotel’s manager — setting off an odd 10-day standoff that included visits from the police, shoving matches between Fintiklis’s staffers and Trump loyalists, and occasional piano concerts by Fintiklis in the lobby. Eventually, a Panamanian judge gave him control.
Now, the hotel is a Marriott. But Trump’s company and Fintiklis are still suing each other for millions in damages, with each accusing the other of breaching their prior agreements.
In Monday’s filing, Fintiklis said he was able to examine the hotel’s books after ejecting Trump employees, and those books showed that the Trump Organization was not paying Panama the required 12.5 percent tax on the management fees it collected to run the hotel. Fintiklis said Trump’s company also avoided taxes by underreporting the salaries it paid to hotel employees.
In the filing, Fintiklis does not give a dollar figure for the amount of taxes Trump allegedly evaded. But he says his company could now face “millions of dollars in liability” if Panama demands that it pay the taxes Trump did not. Fintiklis also asserts that the Panamanian authorities have audited the hotel’s books and “identified the failure to withhold and pay income taxes relating to Trump’s management fees.”
The filing offers no proof of a Panamanian government audit. Officials with the Panamanian president’s office and finance ministry did not respond to requests for comment.
“Had Trump been honest . . . about its failure to pay taxes on the management fees it earned and its failure to properly report employee salaries to Panama’s social security agency,” Fintiklis says, his company would not have purchased his share of the hotel in 2017.
Trump’s company on Monday denied any wrongdoing.
“The Trump Organization did not evade any taxes. To the extent any taxes were to be withheld, it was the responsibility” of the building’s owners, company spokeswoman Kim Benza wrote in an email. “The Trump Organization’s only role was to manage the property. We look forward to taking the depositions of Mr. Fintiklis and his partners and unmasking their fraud.”
Fintiklis’s suit also accuses Trump’s company of misleading him in the months before he bought into the building, assuring him that the building was outperforming the rest of the Panama City luxury hotel market. Instead, Fintiklis says, the hotel was falling to the bottom of the market. He also accuses Trump’s company of understating the management fees it took for running the hotel.
Trump still owns the Trump Organization, though he has handed over day-to-day control to his sons, Donald Jr. and Eric.
Last year, after Trump lost control of the hotel, an attorney for Trump’s company wrote directly to Panamanian President Juan Carlos Varela, appealing for his help and suggesting that the Panamanian government could be blamed for the loss. Varela said he did not take any action as a result, and Trump’s lawyers later said they had done it without asking the Trump Organization first.
Joshua Partlow contributed to this report.