Trump Organization, CFO indicted on tax fraud charges

NEW YORK (AP) – Donald Trump’s company and longtime chief financial officer were indicted Thursday on a “comprehensive and audacious” tax fraud scheme in which the executive took over $ 1.

NEW YORK (AP) – Donald Trump’s company and longtime chief financial officer were indicted Thursday on a “comprehensive and audacious” tax fraud scheme in which the executive collected more than $ 1.7 million in compensation payments, including housing rent, car payments and school fees .

Trump himself was not charged with wrongdoing, but prosecutors found that he had signed some of the checks at the center of the case. And a top attorney said the 15-year program was staged “by the top executives” of the Trump organization.

It is the first criminal case in which the New York authorities are investigating the former president’s business relations in two years.

According to the indictment, the Trump Organization and CFO Allen Weisselberg defrauded the tax authorities from 2005 to this year by plotting to pay executives with lucrative fringe benefits and other funds from the books.

Weisselberg alone has been accused of defrauding the state, state and city of more than $ 900,000 in unpaid taxes and unearned tax refunds.

The most serious charge against Weißelberg, aggravated theft, results in five to 15 years in prison. The Company will be fined twice the amount of unpaid tax or $ 250,000, whichever is greater, on tax fraud charges against the company.

The 73-year-old Weißelberg knows the financial operations of the Trump organization well from almost five decades in the company. The charges against him could allow prosecutors to pressure him to participate in the investigation and tell them what he knows.

Both Weißelberg and lawyers from the Trump organization pleaded not guilty. Weißelberg was asked to hand in his passport, was released without bail and left the courthouse without comment.

In a statement, Trump condemned the case as “the political witch hunt of the radical left Democrats”. Weißelberg’s lawyers said he would “fight these allegations”.

The case is being led by Manhattan’s District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James, both Democrats.

Vance has investigated a variety of matters affecting Trump and the Trump Organization, such as hush money payments to women on Trump’s behalf and whether the company forged the value of its real estate to get loans or lower its tax bills.

The news comes as Trump more seriously debates a possible comeback as president in 2024. He has stepped up his public appearances, including his first rallies since leaving the White House.

When the grand jury announced the indictment, Carey Dunne, a senior associate in Vance’s office, said, “Politics has no role in the Jury Chamber and I can assure you that it has no role here.”

The Trump Organization is the body through which the former president manages his many endeavors, including his investments in office towers, hotels, and golf courses, his many marketing deals, and his television activities. Trump’s sons Donald Jr. and Eric have run day-to-day operations since he became president.

Aside from facing fines for the Trump organizations, the criminal case could make it harder for the company to raise bank loans or close deals – a blow that comes at a particularly bad time as the company is already aware of lost deals due to the coronavirus and the Backlash over January 6th attack on the Capitol.

“Accused companies, whether private or public, large or small, face serious side effects,” says business defender Daniel Horwitz. “Financial services companies are reluctant to do business with them. Their access to capital is limited or cut off. “

Weißelberg was scrutinized, among other things, because of questions about the use of a Trump apartment by his son at low or free costs.

Weisselberg’s son Barry – who ran a Trump-operated ice rink in Central Park – paid no reported rent while living in a Trump-owned apartment in 2018, and was only charged $ 1,000 a month – well below typical Manhattan prices – while he lived in a Trump apartment from 2005 to 2012, the indictment states.

Allen Weisselberg himself, a very private man who lived in a modest house on Long Island for years, continued to claim his residence there despite living in a company-paid apartment in Manhattan, prosecutors said.

In doing so, Weisselberg hid the fact that he was a resident of New York City and avoided paying hundreds of thousands in federal, state, and city taxes while collecting about $ 133,000 in refunds to which he was not entitled, so the public prosecutor’s office.

According to the indictment, Weisselberg paid the rent for his Manhattan apartment with company checks and instructed the company to also pay his utility bills and parking spaces.

The company also paid for private school tuition for Weisselberg’s grandchildren with checks that bore Trump’s signature, as well as for Mercedes cars that Weisselberg and his wife drove, and gave him cash to tip for Christmas.

Such perks were listed in the Trump company’s internal documents as part of Weisselberg’s compensation, but were not included or otherwise reported on its W-2 forms, and the company did not withhold taxes on their value, prosecutors said.

Trump’s company also issued checks at Weisselberg’s request to pay for personal expenses and upgrades for his homes and an apartment used by one of his sons, such as new beds, flat-screen TVs, carpets and furniture, prosecutors said.

Barry Weisselberg’s ex-wife worked with the investigators and handed them tons of tax records and other documents.

Two other Trump executives, who were not named, also received substantial under-the-table compensation, including housing and car leasing payments, the indictment said.

Weißelberg is considered a workaholic who has dedicated himself entirely to the interests of Trump. So far there is no sign that he will attack the former president.

“I think it is possible that Weißelberg will think again. If he sees that the charges are written out in such detail and that the alleged federal tax loss is included, he could theoretically change his mind, “said Daniel R. Alonso, former deputy prosecutor loyal to Trump, which obviously speaks against his cooperation.”

Trump has said his company’s actions are standard industry practice and are in no way a crime. The Trump organization accused prosecutors of using Weißelberg as a “farmer in a scorched earth attempt to harm the former president.” The prosecutor’s office and the IRS were said to have never filed a lawsuit against a company for social benefits.

Vance has fought a long battle to get Trump’s tax records, subpoenaed documents, and interviewed corporate executives and other Trump insiders.

James Repetti, a tax attorney and professor at Boston College Law School, said a company like the Trump Organization is generally required to withhold taxes not just on salary but on other forms of compensation as well.

Another prominent New York City real estate figure, the late Leona Helmsley, was convicted of tax fraud in federal proceedings for paying for her home remodeling by her company without reporting it as income.

“The IRS routinely looks for fringe benefit abuse when reviewing closely related companies,” Repetti said.

Michael Cohen, the former Trump attorney who helped Vance’s investigation, wrote in his book Disloyal that Trump and Weisselberg are “masters at mapping out non-business expenses and finding a way around to categorize them as being ”. not taxed. “

Weißelberg began working for Trump’s real estate developer father, Fred, in 1973 after answering a newspaper ad for an accountant, and rose through the organization.

Reluctantly – apart from appearing as a judge on Trump’s 2004 reality TV show The Apprentice – Weisselberg was barely mentioned in news articles before Trump ran for president and questions arose about the boss’s finances and charity.

Cohen said Weisselberg was the one who decided how to secretly refund him a $ 130,000 payment to Stormy Daniels, the porn star who said she had sex with Trump.

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Sisak reported from New Jersey. Associate press writers Bernard Condon in New York and Jill Colvin in Weslaco, Texas contributed to this report.

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Follow Mike Sisak on Twitter at twitter.com/mikesisak and Tom Hays at twitter.com/APtomhays

Michael R. Sisak and Tom Hays, The Associated Press

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