AP

Trump Org. executive says he helped colleagues dodge taxes

Nov 10, 2022, 2:57 PM | Updated: 4:25 pm

NEW YORK (AP) — One of Donald Trump’s top moneymen admitted Thursday to breaking the law to help fellow Trump Organization executives avoid taxes on company-paid apartments and other perks, including by preparing misleading tax returns and failing to report the benefits to tax authorities.

Senior Vice President and Controller Jeffrey McConney testified at the company’s criminal tax fraud trial that he filed false tax returns on behalf of a father-son executive duo whose Manhattan apartment rents were paid by the Trump Organization.

McConney, who was granted immunity to testify as a prosecution witness, also testified that a few years before Trump became president, the company’s accountant raised concerns about the way it paid out holiday bonuses — a topic that has consumed hours of trial testimony.

According to McConney, the accountant warned that the Trump Organization’s dubious and since-discontinued practice of splitting bonus payments between an executive’s salary and one-time independent contractor payments from subsidiaries could jeopardize the law license of one such executive: its top lawyer.

The Trump Organization, the entity through which Trump owns hotels, golf courses and other assets, is accused of helping some top executives avoid income taxes on compensation they got in addition to their salaries.

The company, which could be fined more than $1 million if convicted, has denied wrongdoing. Its lawyers allege that another executive — longtime finance chief Allen Weisselberg — went rogue, concocted the scheme without Trump or the Trump family’s knowledge and lied to the company about what he’d done.

Trump Organization lawyer Susan Necheles kept the jury’s attention on Weisselberg as she questioned McConney on cross-examination Thursday afternoon, showing emails indicating that McConney needed to get permission from Weisselberg to complete even simple tasks, such as approving a $100 expenditure or writing a few sentences to describe the ice rinks the company managed in Central Park.

McConney said that Weisselberg, his boss for years, had wide latitude over the company’s operations and even quoted him as saying that Trump hired him to essentially run the company. Weisselberg has pleaded guilty to taking $1.7 million in off-the-books compensation and agreed to testify as a prosecution witness, possibly next week, in exchange for a five-month jail sentence.

The Trump Organization trial resumed Thursday after an eight-day delay while McConney and the judge, Juan Manuel Merchan recovered from COVID-19. The trial was abruptly interrupted on Nov. 1, just the second day of testimony, when McConney tested positive for the virus during a lunch break.

Merchan wore a blue surgical mask on the bench. About half the jurors also wore masks. McConney, who had been coughing off and on during his testimony last week, didn’t do so nearly as much on Thursday and testified that he was feeling “much better.”

McConney, who said he prepares taxes on the side for a handful of clients, told jurors that he checked “no” on state tax form questions asking if Chief Operating Officer Matthew Calamari Sr. maintained New York City living quarters despite knowing that he had, allowing them both to avoid paying city wage taxes

McConney said he did the same on Matthew Calamari Jr.’s tax forms and did not submit amended tax returns when he learned that he too was living in a company-paid Big Apple apartment.

“Did you intentionally try to help people evade their income taxes?” prosecutor Joshua Steinglass asked.

“Evade is a very strong word,” McConney responded. “I tried to help them any way I could, with some suggestions.”

The Trump Organization also paid for Weisselberg’s Manhattan apartment, Mercedes-Benz cars for him and his wife, furnishings and utilities. Trump personally paid his grandchildren’s school tuition.

McConney, in his third day on the witness stand, testified that he deducted the cost of some executives’ perks from their salaries, reducing their tax liability further. Trump signed off on the salary reductions. Prosecutors showed a 2012 memo noting one such arrangement for Calamari Sr. bearing the former president’s initial — a D resembling a treble clef — and the handwritten notation, “OK.”

A message seeking comment was left with a lawyer for the Calamaris.

McConney, picking up where he left off before the COVID interruption, testified that the Trump Organization altered some pay practices and financial arrangements after bringing in a Washington lawyer to audit its tax practices following Trump’s election in 2016.

Steinglass referred to the changes as a “cleanup.”

But McConney testified that the company was warned years earlier by its own accountant, Donald Bender, that its decades-old way of doling out holiday bonuses — saving money on taxes by paying full-time employees as freelance workers, and possibly writing the payoff as an expense — could imperil then-general counsel Jason Greenblatt’s ability to practice law.

“It had something to do with, he could lose his legal license,” McConney testified.

In 2015, after Bender spoke up, Greenblatt’s bonus was paid entirely as salary.

A message seeking comment was left with Greenblatt, who from 2017-2019 served as an assistant to the president and Trump’s special representative for Middle East negotiations.

McConney tried to justify the split-pay arrangement by saying the company would apportion its bonuses based on work that an executive did for that entity, such as Trump’s Mar-a-Lago estate in Florida. But later he acknowledged such work falls under the normal duties of a CFO like Weisselberg.

Asked why the company didn’t scrap the bonus-pay scheme entirely after Bender said it could cost Greenblatt his career, McConney said: “He’s telling me to stop on one and not stop on the other, it didn’t even enter my mind. … If Donald Bender had reason to tell us to stop, we would’ve stopped.”

___

Follow Michael Sisak on Twitter at twitter.com/mikesisak. Send confidential tips by visiting https://www.ap.org/tips/.

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

AP

Police clear the area following a shooting at the Kansas City Chiefs NFL football Super Bowl celebr...

Associated Press

1 dead, many wounded after shooting at Kansas City Chiefs’ Super Bowl victory parade

One person died after 22 people were hit by gunfire in a shooting at the end of the Kansas Chiefs' Super Bowl victory celebration Wednesday.

7 days ago

This image from House Television shows House Speaker Mike Johnson of La., banging the gavel after h...

Associated Press

GOP-led House impeaches Homeland Security Secretary Mayorkas — by one vote — over border management

Having failed to impeach Homeland Security Secretary Alejandro Mayorkas the first time, House Republicans are determined to try again Tuesday.

8 days ago

Defense Secretary Lloyd Austin, right, and Kenya's Defense Minister Aden Duale, left, listen during...

Associated Press

Defense Secretary Lloyd Austin hospitalized with bladder issue

Defense Secretary Lloyd Austin has been hospitalized following symptoms pointing to an “emergent bladder issue."

10 days ago

Joel Osteen, the pastor of Lakewood Church, stands with his wife, Victoria Osteen, as he conducts a...

Associated Press

Woman firing rifle killed by 2 off-duty officers at Houston’s Lakewood Church run by Joel Osteen

A woman entered the Texas megachurch of Joel Osteen and started shooting with a rifle Sunday and was killed by two off-duty officers.

10 days ago

(Pexels photo)...

Associated Press

Baby in Kansas City, Missouri, dies after her mother mistakenly put her in an oven

An infant in Missouri died when her mother mistakenly put her down for a nap in an oven, a prosecutor said Saturday.

11 days ago

Former Arizona Department of Corrections boss Charles Ryan received probation on Feb. 9, 2024. (AP ...

Associated Press

Former Arizona corrections boss sentenced to probation over armed 2022 standoff with police

Former Arizona Corrections Director Charles Ryan was sentenced Friday to probation for his no-contest plea to a disorderly conduct charge stemming from a 2022 armed standoff at his Tempe home.

12 days ago

Sponsored Articles

...

Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

...

Collins Comfort Masters

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

Trump Org. executive says he helped colleagues dodge taxes