Former hotel partner accuses Trump Organization of tax evasion in Panama

The Trump Organization is being sued by the owner of a Panama City hotel, who alleges the company "made fraudulent and false claims to the Panamanian tax authorities" in order to "cover up its unlawful activities."

The Trump International Hotel and Tower opened in Panama City in 2011, and the Trump Organization was set to manage the property through 2031, The New York Times reports. In 2017, a businessman named Orestes Fintiklis bought 202 of the hotel's 369 units, and soon after took the Trump Organization to court, saying the hotel was struggling financially due to the company's mismanagement. In 2018, the Trump Organization was removed as managers, and the property is now a JW Marriott.

In a legal filing made Monday in Manhattan, Fintiklis and his companies allege that the tax evasion scheme was discovered in 2018 when Panamanian tax authorities conducted an audit. The filing also claims the Trump Organization did not pay taxes on fees it collected for managing the hotel's daily operations and underreported employee salaries to the Panamanian social security agency, possibly to reduce social security tax payments, the Times reports. Combined, these actions made "the financial and operational performance of the hotel appear in a false light," the filing said.

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Fintiklis and his companies are seeking $35 million in damages, while the Trump Organization argues it is owed at least $3 million since being ousted as the property managers. The Trump Organization did not respond to the Times' request for comment.