Trump Organization Is Charged in 15-Year Tax Scheme

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Trump Organization Is Charged in 15-Year Tax Scheme

Post by Roofus » Fri Jul 02, 2021 4:55 am

The Trump Organization, the real estate business that catapulted Donald J. Trump to tabloid fame, television riches and ultimately the White House, was charged Thursday in a 15-year-long tax fraud scheme.

The Manhattan district attorney’s office, which has been conducting the investigation, also accused Allen H. Weisselberg, Mr. Trump’s long-serving and trusted chief financial officer, of avoiding taxes on $1.7 million in income. He faced grand larceny and other charges.

The charges were revealed at an arraignment in State Supreme Court in Manhattan for the Trump Organization and Mr. Weisselberg. The specific nature of the allegations against the company and the top executive were set to be laid out in an indictment to be unsealed after the court proceeding.

The charges against the Trump Organization and Mr. Weisselberg — whom Mr. Trump once praised for doing “whatever was necessary to protect the bottom line” — emerged from the district attorney’s sweeping inquiry into the business practices of Mr. Trump and his company and ushered in an aggressive new phase of the inquiry.

As part of that inquiry, the prosecutors in the office of the district attorney, Cyrus R. Vance Jr., had been examining whether Mr. Weisselberg failed to pay taxes on valuable benefits he and his family received from Mr. Trump, including private school tuition for at least one of his grandchildren, free apartments and leased cars.

The prosecutors, who are also working with lawyers from the office of the New York State attorney general, Letitia James, have also investigated whether the Trump Organization failed to pay payroll taxes on what should have been taxable income.

“Mr. Weisselberg intends to plead not guilty, and he will fight these charges in court,” his lawyers, Mary E. Mulligan and Bryan C. Skarlatos, said in a statement before the arraignment.

The Trump Organization also issued a statement, saying Mr. Weisselberg was being used as a “pawn in a scorched-earth attempt to harm the former president.”

“The district attorney is bringing a criminal prosecution involving employee benefits that neither the I.R.S. or any other district attorney would ever think of bringing,” the statement read. “This is not justice; this is politics.”

The broader investigation into Mr. Trump and his company’s business practices is continuing. The prosecutors have been investigating whether Mr. Trump and the Trump Organization manipulated property values to obtain loans and tax benefits, among other potential financial crimes, The New York Times has reported.

The indictment follows months of an increasing pressure campaign on Mr. Weisselberg to offer information that could help that inquiry. Prosecutors had subpoenaed Mr. Weisselberg’s personal tax returns and bank records, reviewed a raft of his financial dealings and questioned his ex-daughter-in-law — all part of an effort to gain his cooperation.

Mr. Trump was not charged. But an indictment of the company that carries his name strikes a blow to the former president just as he has resumed holding rallies. Even if Mr. Trump parlays the charges into some immediate good will from his supporters — he has denounced the investigation as political persecution — he could face the costly distraction of a trial if he attempts to mount another presidential campaign.

The Trump Organization, the real estate business that catapulted Donald J. Trump to tabloid fame, television riches and ultimately the White House, was charged Thursday in a 15-year-long tax fraud scheme.

The Manhattan district attorney’s office, which has been conducting the investigation, also accused Allen H. Weisselberg, Mr. Trump’s long-serving and trusted chief financial officer, of avoiding taxes on $1.7 million in income. He faced grand larceny and other charges.

The charges were revealed at an arraignment in State Supreme Court in Manhattan for the Trump Organization and Mr. Weisselberg. The specific nature of the allegations against the company and the top executive were set to be laid out in an indictment to be unsealed after the court proceeding.

The charges against the Trump Organization and Mr. Weisselberg — whom Mr. Trump once praised for doing “whatever was necessary to protect the bottom line” — emerged from the district attorney’s sweeping inquiry into the business practices of Mr. Trump and his company and ushered in an aggressive new phase of the inquiry.

As part of that inquiry, the prosecutors in the office of the district attorney, Cyrus R. Vance Jr., had been examining whether Mr. Weisselberg failed to pay taxes on valuable benefits he and his family received from Mr. Trump, including private school tuition for at least one of his grandchildren, free apartments and leased cars.

The prosecutors, who are also working with lawyers from the office of the New York State attorney general, Letitia James, have also investigated whether the Trump Organization failed to pay payroll taxes on what should have been taxable income.

“Mr. Weisselberg intends to plead not guilty, and he will fight these charges in court,” his lawyers, Mary E. Mulligan and Bryan C. Skarlatos, said in a statement before the arraignment.

The Trump Organization also issued a statement, saying Mr. Weisselberg was being used as a “pawn in a scorched-earth attempt to harm the former president.”

“The district attorney is bringing a criminal prosecution involving employee benefits that neither the I.R.S. or any other district attorney would ever think of bringing,” the statement read. “This is not justice; this is politics.”

The broader investigation into Mr. Trump and his company’s business practices is continuing. The prosecutors have been investigating whether Mr. Trump and the Trump Organization manipulated property values to obtain loans and tax benefits, among other potential financial crimes, The New York Times has reported.

The indictment follows months of an increasing pressure campaign on Mr. Weisselberg to offer information that could help that inquiry. Prosecutors had subpoenaed Mr. Weisselberg’s personal tax returns and bank records, reviewed a raft of his financial dealings and questioned his ex-daughter-in-law — all part of an effort to gain his cooperation.

Mr. Trump was not charged. But an indictment of the company that carries his name strikes a blow to the former president just as he has resumed holding rallies. Even if Mr. Trump parlays the charges into some immediate good will from his supporters — he has denounced the investigation as political persecution — he could face the costly distraction of a trial if he attempts to mount another presidential campaign.

Famously hard-working — he once said he took “no vacations” — Mr. Weisselberg gained an unparalleled view into the inner workings of the company and its bare-knuckled brawls with business partners. Mr. Weisselberg “knows of every dime that leaves the building,” Corey Lewandowski, a former Trump campaign official, wrote in the book he co-authored, “Let Trump Be Trump.”

Now that he faces charges, Mr. Weisselberg, who is 73 years old, still could cooperate with the prosecutors. If he ultimately pleads guilty and strikes a deal, he could do considerable damage to Mr. Trump, who for decades has depended on his unflinching loyalty, once declaring with “100 percent” certainty that Mr. Weisselberg had not betrayed him.

The two started working together closely in the late 1970s, with Mr. Weisselberg putting in time on nights and weekends to handle projects for Mr. Trump, the ambitious son of his boss, Fred Trump. Mr. Weisselberg said in a 2015 deposition that he had been helping with Mr. Trump’s tax returns since at least the 1990s, when Mr. Trump made him the organization’s chief financial officer.

Mr. Weisselberg has remained steadfastly loyal to the company even as his own name surfaced during congressional and federal investigations into Mr. Trump. While Mr. Weisselberg was never a target of those investigations, he has long been a central focus of the district attorney’s inquiry, which began in August 2018.

As the prosecutors have zeroed in on the benefits he and his family received from Mr. Trump, they have examined tens of thousands of dollars in private school tuition for one of Mr. Weisselberg’s grandchildren, a rent-free apartment on the Upper West Side of Manhattan and leased Mercedes-Benz vehicles. Mr. Weisselberg’s wife also received her own leased Mercedes.

Mr. Weisselberg was not the only senior company executive to receive similar perks. Until 2018, when the company reined in the benefits, it provided a number of employees with Mercedes-Benzes.

Those types of benefits are generally taxable, though there are exceptions, and the tax rules can be murky.

Even if Mr. Weisselberg declines to cooperate, the charges represent a major milestone for Mr. Vance, a Democrat who twice beat Mr. Trump at the U.S. Supreme Court in a battle to obtain the former president’s tax records. That victory reinvigorated the investigation, touching off months of grand jury subpoenas and witness testimony.

Of all the investigations that have loomed over Mr. Trump and his inner circle in the past few years — two impeachments, one special counsel inquiry into ties with Russia and criminal charges against a half dozen former aides — only Mr. Vance’s case has reached into the top rungs of the Trump Organization and taken aim at the company itself.

Still, the stakes remain high for Mr. Vance. Although he is not seeking re-election after three terms, the district attorney has faced criticism in the past for treading lightly with other powerful defendants. The Trump investigation will arguably be the most enduring part of his legacy.

When Mr. Vance’s office opened its broader investigation, it began with an examination of hush-money payments made during the 2016 presidential campaign to two women who said they had affairs with Mr. Trump. In particular, the prosecutors scrutinized how the company accounted for $420,000 it gave Michael D. Cohen, Mr. Trump’s former personal lawyer, partly as reimbursement for money he paid to buy the silence of one of the women, Stormy Daniels, a pornographic film actress who said she had an affair with Mr. Trump.

Mr. Cohen is cooperating with Mr. Vance’s investigation, which grew out of 2018 federal charges against him.

In congressional testimony two years ago, Mr. Cohen pinned blame on Mr. Weisselberg, saying that he had helped devise a strategy to mask the Trump Organization’s reimbursements to Mr. Cohen.

In his final days in office, Mr. Trump was said to have considered pardoning Mr. Weisselberg, but ultimately did not do so. Federal prosecutors never accused Mr. Weisselberg of wrongdoing.

For years, Mr. Weisselberg kept a low profile at the Trump Organization, often eclipsed by his bombastic boss. One of Mr. Weisselberg’s rare moments in the spotlight came during a cameo as a judge on “The Apprentice,” in which he discussed dog grooming.

Mr. Weisselberg’s family has also long been entwined with Mr. Trump. One of Mr. Weisselberg’s sons, Barry, has been the manager of Trump Wollman Rink in Central Park, and another son, Jack, works at Ladder Capital, one of Mr. Trump’s biggest lenders.

Mr. Vance’s office has subpoenaed Ladder Capital and spoken to some of its employees about the lending process, according to people with knowledge of the matter. There has been no indication that prosecutors suspect either of Mr. Weisselberg’s sons of wrongdoing.

Prosecutors have also questioned Mr. Weisselberg’s former daughter-in-law, Jennifer Weisselberg, who is in the midst of a contentious court battle with her ex-husband, Barry, over custody of their children.

Ms. Weisselberg has said that prosecutors had asked her about the tuition payments as well as gifts Barry Weisselberg received from Mr. Trump, including an apartment on Central Park South and several cars that were leased for him.

Source: New York Times

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