Trump Organization, CFO indicted on tax fraud charges

Jun 30, 2021, 10:08 PM | Updated: Jul 2, 2021, 11:04 am
Allen Weisselberg, center, departs Manhattan criminal court, Thursday, July 1, 2021, in New York.  ...

Allen Weisselberg, center, departs Manhattan criminal court, Thursday, July 1, 2021, in New York. Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump’s company with tax crimes. Trump himself was not charged. (AP Photo/John Minchillo)

(AP Photo/John Minchillo)

NEW YORK (AP) — Donald Trump’s company and its longtime finance chief were charged Thursday in what prosecutors called a “sweeping and audacious” tax fraud scheme in which the executive collected more than $1.7 million in off-the-books compensation, including apartment rent, car payments and school tuition.

Trump himself was not charged with any wrongdoing, but prosecutors noted he signed some of the checks at the center of the case. And one top prosecutor said the 15-year scheme was “orchestrated by the most senior executives” at the Trump Organization.

It is the first criminal case to come out New York authorities’ two-year investigation into the former president’s business dealings.

According to the indictment, from 2005 through this year, the Trump Organization and Chief Financial Officer Allen Weisselberg cheated tax authorities by conspiring to pay senior executives off the books by way of lucrative fringe benefits and other means.

Weisselberg alone was accused of defrauding the federal government, state and city out of more than $900,000 in unpaid taxes and undeserved tax refunds.

The most serious charge against Weisselberg, grand larceny, carries five to 15 years in prison. The tax fraud charges against the company are punishable by a fine of double the amount of unpaid taxes, or $250,000, whichever is larger.

The 73-year-old Weisselberg has intimate knowledge of the Trump Organization’s financial dealings from nearly five decades at the company. The charges against him could enable prosecutors to pressure him to cooperate with the investigation and tell them what he knows.

Both Weisselberg and lawyers for the Trump Organization pleaded not guilty. Weisselberg was ordered to surrender 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 the Radical Left Democrats.” Weisselberg’s lawyers said he will “fight these charges.”

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

Vance has been investigating a wide range of matters involving Trump and the Trump Organization, such as hush-money payments made to women on Trump’s behalf and whether the company falsified the value of its properties to obtain loans or reduce its tax bills.

The news comes as Trump has been more seriously discussing a possible comeback run for president in 2024. He has ramped up his public appearances, including holding his first rallies since leaving the White House.

In announcing the grand jury indictment, Carey Dunne, a top deputy in Vance’s office, said: “Politics has no role in the jury chamber, and I can assure you it had no role here.”

The Trump Organization is the entity through which the former president manages his many ventures, including his investments in office towers, hotels and golf courses, his many marketing deals and his TV pursuits. Trump’s sons Donald Jr. and Eric have been in charge of day-to-day operations since he became president.

In addition to exposing the Trump Organizations to fines, the criminal case could make it more difficult for the business to secure bank loans or strike deals — a hit that comes at a particularly bad time, with the company already reeling from lost business because of the coronavirus and the backlash over the Jan. 6 attack on the Capitol.

“Companies that are being indicted, whether they are private or public, big or small, face serious collateral consequences,” said Daniel Horwitz, a white-collar defense attorney. “Companies in the financial services industry are reluctant to do business with them. Their access to capital is limited or cut off.”

Weisselberg came 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 managed a Trump-operated ice rink in Central Park — paid no reported rent while living in a Trump-owned apartment in 2018, and he was charged just $1,000 per month — far below typical Manhattan prices — while living in a Trump apartment from 2005 to 2012, the indictment said.

Allen Weisselberg himself, an intensely private man who lived for years in a modest home on Long Island, continued to claim residency there despite living in a company-paid Manhattan apartment, prosecutors said.

By doing so, Weisselberg concealed that he was a New York City resident, and he avoided paying hundreds of thousands in federal, state and city income taxes while collecting about $133,000 in refunds to which he was not entitled, prosecutors said.

According to the indictment, Weisselberg paid rent on his Manhattan apartment with company checks and directed the company to pay for his utility bills and parking, too.

The company also paid for private school tuition for Weisselberg’s grandchildren with checks bearing Trump’s signature, as well as for Mercedes cars driven by Weisselberg and his wife, and gave him cash to hand out tips around Christmas.

Such perks were listed on internal Trump company documents as being part of Weisselberg’s compensation but were not included on his W-2 forms or otherwise reported, 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 to his homes and an apartment used by one of his sons, such as new beds, flat-screen TVs, carpeting and furniture, prosecutors said.

Barry Weisselberg’s ex-wife has been cooperating with investigators and given them reams of tax records and other documents.

Two other Trump executives who were not identified by name also received substantial under-the-table compensation, including lodging and the payment of automobile leases, the indictment said.

Weisselberg has a reputation as a workaholic utterly devoted to Trump’s interests. So far, there is no sign that he is about to turn on the former president.

“I think it’s possible that Weisselberg would reconsider. Seeing the charges spelled out in this much detail, and seeing that the alleged federal tax loss is included, could in theory change his mind,” said Daniel R. Alonso, former chief assistant district attorney. “On the other hand, he is a loyal Trump soldier, which obviously argues against his cooperation.”

Trump has said his company’s actions were standard practice in the business and in no way 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.” It said the DA’s office and the IRS have never before brought criminal charges against a company over employee benefits.

Vance fought a long battle to get Trump’s tax records and has been subpoenaing documents and interviewing company 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 have a responsibility to withhold taxes not just on salary but on other forms of compensation.

Another prominent New York City real estate figure, the late Leona Helmsley, was convicted of tax fraud in a federal case that arose from her company paying to remodel her home without her reporting that as income.

“The IRS routinely looks for abuse of fringe benefits when auditing closely held businesses,” Repetti said.

Michael Cohen, the former Trump lawyer who has been cooperating with Vance’s investigation, wrote in his book “Disloyal” that Trump and Weisselberg were “masters at allocating expenses that related to non-business matters and finding a way to categorize them so they weren’t taxed.”

Weisselberg first started working for Trump’s real estate-developer father, Fred, after answering a newspaper ad for a staff accountant in 1973, and rose in the organization.

Keeping a low profile — aside from a 2004 appearance as a judge on Trump’s reality TV show “The Apprentice” — Weisselberg was barely mentioned in news articles before Trump started running for president and questions arose about the boss’ 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 porn star who said she had sex with Trump.

___

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

___

On Twitter, follow Mike Sisak at twitter.com/mikesisak and Tom Hays at twitter.com/APtomhays

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

A woman holds a child at a clinic in Dollow, Somalia, on Wednesday, Sept. 21, 2022. Somalia is in t...
Associated Press

Prolonged drought brings famine, death and fear to Somalia

DOLLOW, Somalia (AP) — A man in a donkey cart comes wheeling through the dust, carrying two small, silent boys. The sky is overcast. It could rain. It won’t. It hasn’t for a very long time. Mohamed Ahmed Diriye is 60 years old, and he’s completing the grimmest journey of his life. He set off […]
18 hours ago
Associated Press

Colorado baker fighting ruling over gender transition cake

DENVER (AP) — The Colorado baker who won a partial Supreme Court victory after refusing on religious grounds to make a gay couple’s wedding cake a decade ago is challenging a separate ruling he violated the state’s anti-discrimination law by refusing to make a cake celebrating a gender transition. A lawyer for Jack Phillips on […]
18 hours ago
Susana Lujano, left, a dreamer from Mexico who lives in Houston, joins other activists to rally in ...
Associated Press

Appeals court orders another review of revised ‘DACA’

NEW ORLEANS (AP) — A federal appeals court Wednesday ordered a lower court review of Biden administration revisions to a program preventing the deportation of hundreds of thousands of immigrants brought into the United States as children. The 5th U.S. Circuit Court of Appeals said a federal district judge in Texas should take another look […]
18 hours ago
Los Angeles District Attorney George Gascon, at podium stands by a photo on display of TV producer ...
Associated Press

‘Scrubs’ producer Eric Weinberg charged with sex assaults

LOS ANGELES (AP) — Eric Weinberg, an executive producer and writer for the hit TV show “Scrubs” and many others, has been charged with sexually assaulting five women that he lured to photo shoots and there could be many more victims, Los Angeles County prosecutors announced Wednesday. Weinberg, 62, was arrested Tuesday, nearly a week […]
18 hours ago
This booking photo provided by the El Paso, Texas, County Sheriff's Office shows Michael Sheppard, ...
Associated Press

Family of Mexican migrant slain in West Texas seek answers

AUSTIN, Texas (AP) — The family of a migrant authorities say was shot to death in Texas by two brothers — including one who was the warden of a detention facility with a history of abuse allegations — are demanding more information this week, as the two men charged in the killing were released from […]
18 hours ago
FILE - Water flows along the All-American Canal Saturday, Aug. 13, 2022, near Winterhaven, Calif. T...
Associated Press

California agencies float Colorado River savings in drought

SACRAMENTO, Calif. (AP) — California water agencies that rely on the parched Colorado River said Wednesday they can reduce their use by one-tenth starting in 2023 in response to calls for cuts from the federal government. The agencies, which supply water to farmers and millions of people in Southern California, laid out their proposal in […]
18 hours ago

Sponsored Articles

...
Day & Night Air Conditioning, Heating and Plumbing

Here are 4 signs the HVAC unit needs to be replaced

Pool renovations and kitchen upgrades may seem enticing, but at the forefront of these investments arguably should be what residents use the most. In a state where summertime is sweltering, access to a functioning HVAC unit can be critical.
...
Sanderson Ford

Don’t let rising fuel prices stop you from traveling Arizona this summer

There's no better time to get out on the open road and see what the beautiful state of Arizona has to offer. But if the cost of gas is putting a cloud over your summer vacation plans, let Sanderson Ford help with their wide-range selection of electric vehicles.
...
Mayo Clinic Orthopedics and Sports Medicine

Why your student-athlete’s physical should be conducted by a sports medicine specialist

Dr. Anastasi from Mayo Clinic Orthopedics and Sports Medicine in Tempe answers some of the most common questions.
Trump Organization, CFO indicted on tax fraud charges