NEW YORK: Donald Trump’s company and longtime CFO were indicted on Thursday in what prosecutors called a “sweeping and daring” tax evasion scheme in which the executive raised more than $ 1.7 million unofficial allowance dollars, including apartment rent, car payments, and tuition.
Trump himself has not been charged with any wrongdoing, but prosecutors noted that he signed some of the checks central to the case. And one of the top prosecutors said the 15-year program was “orchestrated by the top leadership” of the Trump Organization.
It is the first criminal case to be the subject of a two-year investigation by authorities in New York into the former president’s trade dealings.
According to the indictment, from 2005 to this year, the Trump Organization and CFO Allen Weisselberg tricked tax authorities into conspiring to pay senior executives through lucrative benefits and other means.
Weisselberg alone has been accused of defrauding the federal government, state and city of more than $ 900,000 in unpaid taxes and unearned tax refunds.
The most serious charge against Weisselberg, robbery, carries five to 15 years in prison. Charges of tax evasion against the company are punishable by a fine of double the amount of unpaid taxes, or $ 250,000, whichever is greater.
Weisselberg, 73, has intimate knowledge of the Trump Organization’s financial transactions for nearly five decades in the business. The charges against him could allow prosecutors to pressure him to cooperate with the investigation and tell them what he knows.
Weisselberg and lawyers for the Trump Organization have pleaded not guilty. Weisselberg was ordered to turn over his passport and was released without bail, leaving the courthouse without comment.
In a statement, Trump condemned the case as a “political witch hunt by radical left Democrats.” Weisselberg’s lawyers said he would “fight these accusations.”
The case is led by Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James, both Democrats.
Vance has investigated a wide range of issues involving Trump and the Trump Organization, such as hidden cash payments made to women on Trump’s behalf and whether the company has falsified the value of its properties to obtain loans or reduce its tax invoices.
The news comes as Trump is more seriously discussing a possible return to the presidency in 2024. He has stepped up his public appearances, including hosting his first rallies since leaving the White House.
Announcing the grand jury indictment, Carey Dunne, a senior deputy in Vance’s office, said: “Politics have no role in the jury room, and I can assure you that she had no role here. “
The Trump Organization is the entity through which the former president manages his many businesses, including his investments in office towers, hotels and golf courses, his numerous marketing deals, and his television activities. Trump’s sons Donald Jr. and Eric have been in charge of day-to-day operations since he became president.
In addition to exposing Trump organizations to fines, the criminal case could make it more difficult for the company to obtain bank loans or close deals – a success that comes at a particularly bad time, as the company is already reeling from the loss of business due to the coronavirus and the backlash from the January 6 attack on the Capitol.
“Charged companies, whether private or public, large or small, face serious collateral consequences,” said Daniel Horwitz, a white-collar defense lawyer. âCompanies in the financial services industry are reluctant to do business with them. Their access to capital is limited or cut off.
Weisselberg has come under scrutiny in part because of questions about his son’s use of a Trump apartment at little or no cost.
Weisselberg’s son Barry – who ran a Trump-operated ice rink in Central Park – paid no declared rent while living in a Trump-owned apartment in 2018, and he was only billed $ 1,000 per month – well below typical Manhattan prices – while living in a Trump Apartment from 2005 to 2012, according to the indictment.
Allen Weisselberg himself, an intensely private man who lived for years in a modest house on Long Island, continued to claim the residence there while living in a Manhattan apartment paid for by the company, said prosecutors.
In doing so, Weisselberg concealed that he was a resident of New York City, and he avoided paying hundreds of thousands in federal, state, and municipal income taxes while collecting around $ 133,000 in refunds. to which he was not entitled, prosecutors said.
According to the indictment, Weisselberg paid the rent on his Manhattan apartment with corporate checks and ordered the company to pay its utility and parking bills as well.
The company also paid for tuition at private schools for Weisselberg’s grandchildren with checks signed by Trump, as well as for Mercedes cars driven by Weisselberg and his wife, and gave him money for tip around Christmas.
These benefits were listed in internal Trump company documents as part of Weisselberg’s compensation, but were not included in his W-2 forms or otherwise reported, and the company did not withhold tax from them. value, prosecutors said.
Trump’s company also issued checks, at Weisselberg’s request, to pay for personal expenses and improvements to his homes and an apartment used by one of his sons, such as new beds, televisions to flat-screen TVs, carpeted floors, and furniture, prosecutors said.
Barry Weisselberg’s ex-wife cooperated with investigators and handed them tons of tax records and other documents.
Two other Trump leaders who were not identified by name also received substantial compensation under the table, including accommodation and payment for car rentals, according to the indictment.
Weisselberg has a reputation for being a workaholic totally devoted to Trump’s interests. So far, there is no indication that he is about to turn against the former president.
âI think it’s possible Weisselberg will reconsider. Seeing the charges laid out in such detail and seeing that the alleged federal tax loss is included, could in theory change your mind, âsaid Daniel R. Alonso, former deputy chief prosecutor. “On the other hand, he’s a staunch Trump soldier, which obviously stands in the way of his cooperation.”
Trump said his company’s actions were standard business practice and by no means a crime. The Trump organization accused the district attorney’s office of using Weisselberg as “a pawn in a scorched earth attempt to harm the former president.” He said the prosecutor’s office and the IRS had never brought criminal charges against a company for employee benefits.
Vance fought a long battle to get Trump’s tax records and subpoenaed documents and interviewed corporate executives and other Trump insiders.
James Repetti, a tax lawyer and professor at Boston College Law School, said a company like the Trump Organization would generally be responsible for withholding taxes not only on pay but other forms of compensation.
Another New York real estate personality, the late Leona Helmsley, was convicted of tax evasion in a federal case arising out of her business paying to renovate her home without her reporting it as income.
âThe IRS routinely looks for abuse of employee benefits when auditing private businesses,â Repetti said.
Michael Cohen, the former Trump attorney who cooperated with Vance’s investigation, wrote in his book “Disloyal” that Trump and Weisselberg were “the masters of dividing up the expense of non-trade matters and finding a way to categorize them so that they are not. Â»T taxed.
Weisselberg began working for Fred, the father of Trump’s real estate developer, after responding to a newspaper ad for an accountant in 1973, and rose through the ranks in the organization.
Keeping a low profile – other than a 2004 appearance as a judge on Trump’s reality TV show “The Apprentice” – Weisselberg was barely mentioned in press reports before Trump started running for office. the presidency and questions arose about the boss’s finances and charity.
Cohen said Weisselberg was the one who decided how to secretly reimburse him for a $ 130,000 payment to Stormy Daniels, the pornstar who claimed to have had sex with Trump.