Top Trump Finance Officer Pleads Not Guilty to Manhattan Tax Charges – Courthouse News Service
The first criminal indictment to arise from a two-year probe led by Manhattan District Attorney Cyrus Vance Jr. was unsealed in time for the 2:15 arraignment of the Trump Organization and its longtime finance chief.
MANHATTAN (CN) — Arriving to the courthouse at least eight hours before his 2:15 p.m. arraignment alongside the Trump Organization, Allen Weisselberg pleaded not guilty to long-expected fraud charges.
In addition to grand larceny and other charges against Weisselberg, the 24-page indictment charges the Trump Organization with first-degree fraud and scheme to defraud — alleging that they kept tax authorities in the dark about more than $1.7 million of indirect compensation, thereby unlawfully evading hundreds of thousands of dollars in federal, state, and local taxes.
Weisselberg, 73, entered the court in handcuffs, surrounded by court officers, shortly before his arraignment began.
The 15-count indictment accuses the Trump Organization of flouting tax obligations by letting Weisselberg and other top executives collect nonmonetary “fringe” benefits and perks, including free or basically free use of apartments in the Trump real estate empire, as well as private school tuition, Mercedes Benz leases and end-of year holiday bonuses, all of which were not reported to tax authorities.
“The scheme was intended to allow certain employees to substantially understate their compensation from the Trump Organization, so that they could and did pay federal, state, and local taxes in amounts that were significantly less than the amounts that should have been paid,” the indictment states.
“The scheme also enabled Weisselberg to obtain tax refunds of amounts previously withheld and remitted to federal and state tax authorities. Further, the scheme involved the failure of the Trump Corporation and Trump Payroll Corp. to withhold income taxes on wages, salaries, bonuses and other forms of compensation paid to certain employees. The scheme also allowed the Trump Organization to evade the payment of payroll taxes that the Trump Organization was required to pay in connection with employee compensation.”
Weisselberg’s attorneys Mary Mulligan and Bryan Skarlatos emphasized in a statement Thursday morning that they “will fight these charges in court.”
The former president himself is not named in the newly unsealed charges filed by a Manhattan grand jury, which mark the first criminal case to arise from the two-year probe led by Manhattan District Attorney Cyrus Vance Jr., a Democrat who leaves office at the end of the year.
To the Trump Organization, though, its namesake is the elephant in the room. A representative for the organization called Weisselberg “a pawn in a scorched-earth attempt to harm the former president.”
“Make no mistake — this is not about the law; this is all about politics,” the organization added later, calling it unprecedented that a company should face criminal charges either from a district attorney or the IRS over employee benefits.
Assistant Manhattan District Attorney Solomon Shinerock rebuffed that claim in court Thursday.
“Politics has no role in the grand jury chamber, and I can assure you it played no role here,” he said.
The Trump Organization refused to comply with subpoenas or allow prosecutors to speak with employees, he said, and cannot turn around and demand leniency in the ongoing investigation. Shinerock hammered the point as well that the schemes driving today’s charges are not standard businesses, “nor was it the act of a rogue or isolated employee.”
He said Weisselberg, who is still CFO, failed to pay taxes on $1.7 million of income, and directed the deletion of company records to conceal his participation in the scheme. According to the indictment, that money went to benefits like rent payments and related expenses.
On behalf of the Trump Corporation, attorney Alan Futerfas entered a plea of not guilty.
The government turned over two hard drives, one to the company’s counsel and the other to Weisselberg’s, with millions of initial discovery documents. Judge Juan Merchan signed a protective order that both parties are in agreement about today, but they are reserving the right to request changes to its conditions in the future.
The next status conference has been set for Sept. 20. New York law does not allow the possibility of bail for Thursday’s charges, and Weisselberg was released on his own recognizance after surrendering his passport at the court’s request.
Weisselberg was allowed to leave the courtroom uncuffed, with Mulligan patting him on the shoulder as he walked out.
The accountant started working for the Trump family in Brooklyn in 1973 under Fred Trump, Donald’s father, and later oversaw the books when Donald built the Trump Tower skyscraper on Fifth Avenue, acquired several casinos in Atlantic City and then drove them into bankruptcy.
Based out of Trump Tower on Manhattan’s Fifth Avenue, the Trump Organization has been in control of Donald Trump Jr. and Eric Trump since Don Sr.’s election in 2017 as U.S. president.
Federal prosecutors reportedly granted immunity to Weisselberg in 2018 for his cooperation in a separate investigation of former Trump fixer Michael Cohen.
Vance’s investigation grew out of that probe, focused initially on hush-money payments that Cohen made before the 2016 election to prevent the public from hearing about Trump’s alleged sexual affairs with two women ― adult-film actress Stormy Daniels and former Playboy model Karen McDougal.
Cohen was sentenced to three years in prison for his part in facilitating those payments, which prosecutors in the Southern District of New York noted were made in coordination with Trump and at his direction. Trump was referred to as “Individual-1” in those charging papers.
A year later, while testifying before the House Oversight Committee, Cohen would clear up any confusion about the reference in his 22-page criminal information to “Executive 1.”
Linking Weisselberg to the crimes beyond the hush-money payments, including campaign-finance violations and to misleading the banks that lent Trump money, Cohen maintained that Weisselberg knew about falsified financial statements that Trump used to dupe insurers and investors. Cohen also said that it was Weisselberg who decided that Cohen should pay Stormy Daniels hush money out of pocket and then be reimbursed in installments spread out over 12 months to “hide what the payment was.”
Cohen was reportedly interviewed by investigators with the Manhattan District Attorney’s Office at least eight times during the course of their ongoing probe.
Weisselberg has also been tied to several Trump enterprises sullied by scandal. He reviewed the finances at the now-defunct Trump University, the real estate school hit by a fraud lawsuit that Trump settled for $25 million the same month he was elected president in 2016.
Likewise, Weisselberg was a director of the now-dissolved Trump Foundation, which shuttered in late 2018 after being sued by New York’s then-Attorney General Barbara Underwood for allegedly tapping charitable donations for political and business purposes.
Underwood’s successor, Attorney General Letitia James issued subpoenas in March 2019 to Deutsche Bank and Investors Bank, reportedly seeking loan records related to Trump’s unsuccessful attempt to buy the Buffalo Bills football team in 2014, as well as mortgages, credit lines and other documents related to the Trump International Hotel in Washington, D.C., buildings in Chicago and New York, and a golf course in the Miami area.
Weisselberg was subpoenaed in James’ civil investigation and testified twice in 2020.
Last month, James’ office announced that it and the Manhattan DA were actively investigating the Trump Organization in a criminal capacity, expanding what had previously been a civil probe.
New York Attorney General Letitia James, who attended the arraignment on Thursday, called Vance’s indictment an “important marker in the ongoing criminal investigation of the Trump Organization and its CFO, Allen Weisselberg.”
“In the indictment, we allege, among other things, financial wrongdoing whereby the Trump Organization engaged in a scheme with Mr. Weisselberg to avoid paying taxes on certain compensation,” James said in a statement Thursday afternoon. “This investigation will continue, and we will follow the facts and the law wherever they may lead.”
For over a year, while the scope of Vance’s probe remained unknown, Trump’s attorneys fought in the courts to keep a grand jury from obtaining his financial records from his accountants — effectively keeping the probe in limbo — with the Supreme Court ultimately refusing to block a subpoena of his tax records last February.
In direct response to the insurrectionist attack on the Capitol building by far-right Trump supporters in January, New York City announced that it would be terminating the Trump Organization’s contract with the city to run Central Park’s Wollman skating rink, which is managed by Allen Weisselberg’s son, Barry Weisselberg.
In late September 2020, The New York Times published the results of its own investigation into Trump’s tax returns, exposing that Trump paid just $750 in federal income taxes in 2016, the year he won the presidency, and in 2017, his first year in office.
The New York Times’ investigation, which Trump hastily dismissed as “totally fake news,” also found that he paid no federal income taxes in prior years going back a decade.
Trump is also under audit over a $72.9 million tax refund that could cost him more than $100 million if the IRS rules against him, the Times revealed.