An eight-figure loan involving former President Donald Trump, a financial firm, and his Chicago skyscraper may lead to his next legal challenge after a court-appointed monitor pointed out that the loan may be fake, and legal experts believe it could be a form of tax evasion.

Last week, during Trump’s civil fraud trial, retired judge Barbara Jones submitted a report to the court noting that she found deficiencies in the Trump Organization materials she reviewed. Jones was appointed to oversee the organization’s financial activities and statements after New York Attorney General Letitia James sued the former president and his company for fraud in November 2022.

Among the deficiencies Jones found included a $48 million loan that Trump recorded between himself and Chicago Unit Acquisition, a company he owns. The eight-figure loan, which he listed as being worth more than $50 million and categorized as a “springing loan,” a loan with unfavorable terms to the borrower, was disclosed annually while Trump was president to the federal Office of Government Ethics — most recently in his amended version approved in October 2023.

As reported in a 2019 analysis by Mother Jones, the loan stemmed from emergency financial restructuring on Trump’s part during the 2008 real estate crash. One of the financial firms funding his efforts, Fortress, loaned him nearly $100 million. Eventually, the firm agreed to cancel half of the loan in 2012, forgiving Trump of $48 million.

Tax experts told the Daily Beast that this would typically qualify as $48 million in taxable income. However, Jones said in her letter that the Trump Organization told her such a loan never existed, leading experts to believe that Trump may have evaded taxes on nearly $50 million in income by making it look like the debt was not canceled but instead bought from Fortress.

Trump appeared to confirm this arrangement to the New York Times in 2016, claiming that he bought back the loan from “a group of banks several years ago.” The former president chose to keep the debt on his books, claiming that he paid interest on it to himself, the outlet reported. Trump has insisted that Chicago Unit Acquisition does not make any money or have any value at all.

“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 in her report. “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 the MAML,” which are corporate financial statements.

For the allegations to be accurate, to avoid paying taxes on the considerably large amount of income, Trump would have fabricated the loan that he claimed to owe to Chicago Unit Acquisition, making it appear as if he used the company to buy his debt from Fortress. So, instead of owing Fortress $48 million, Trump reported that the debt was transferred, and he now owes his company, the Daily Beast reported, possibly pocketing the $48 million and covering it up with a fabricated loan.

Jordan Libowitz, communications director at Citizens for Responsibility and Ethics in Washington, told the outlet that, assuming Jones’s court filing is accurate, Trump would appear to have broken the law intentionally and repeatedly.

“When you fill out your personal financial disclosures, you attest under penalty of the law that the information is true,” Libowitz said. “Trump had to know that his Chicago business never gave him a loan of more than $50 million, as he claimed, repeatedly.”

Libowitz said Trump had many chances to correct this claim, but as shown in his amended October disclosure, he never did.

“While the reasons behind claiming this fake loan are still unknown, at the very least, he misled the government for years about his finances,” he added. “It appears that Trump knowingly and intentionally broke the law. The only question is how many laws.”

Alan Garten, chief legal counsel for the Trump Organization, said Jones’s claim was inaccurate and that the loan did exist.

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

Garten also repeatedly insisted that Chicago Unit Acquisition actually owed the money to Trump, stating it was an “internal loan,” meaning the former president “lent money to the entity that he owns.”

Trump attorney Clifford S. Robert also responded to Jones’s claims in a letter to the New York court on Monday, accusing her of overstating minor problems and working to “twist immaterial accounting items into a narrative favoring her continued appointment, and thereby the continued receipt of millions of dollars in excessive fees.”

Robert called Jones’s claim on the Chicago loan, specifically, a “demonstrable falsehood” and a “deliberate mischaracterization.” He claimed the Trump Organization provided Jones with an internal company memo that reflects a loan between Chicago Unit Acquisition and 401 Mezz Venture, with the former president not personally named in the transaction. The memo also cites a lower figure for the loan than Trump put on official records.

Libowitz said the explanations provided by Trump’s legal team are casting more uncertainty over the legality of the loans.

“Now they put out a one-line memo that nothing is owed on a $48 million loan between Chicago Unit Acquisition and 401 Mezz LLC, nothing about Trump personally,” he told the Messenger. “They are doing nothing to address, and may be even supporting, the case that Trump knowingly filed untrue claims in his personal financial disclosures, something punishable by both civil and criminal penalties.”

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Manhattan Supreme Court Judge Arthur Engoron, who is overseeing James’s case against Trump and his company, is expected to release a verdict as early as next week. The attorney general asked Engoron to give Trump a lifetime ban from the New York real estate industry and force him to pay roughly $370 million.

Trump also faces 91 felony criminal counts spanning two state cases and two federal investigations, one of each related to his efforts to overturn the results of the 2020 election.