NEW YORK (AP) — Donald Trump’s company and its longtime finance chief were charged Thursday in what a prosecutor called a “sweeping and audacious” tax fraud scheme that saw the Trump executive allegedly receive more than $1.7 million in off-the-books compensation, including apartment rent, car payments and school tuition.
It is the first criminal case New York authorities’ two-year investigation into the former president has yielded. According to the indictment filed Wednesday and unveiled Thursday, from 2005 through this year, CFO Allen Weisselberg and the Trump Organization cheated the state and city out of taxes by conspiring to pay senior executives off the books.
Both Weisselberg and lawyers for the Trump Organization pleaded not guilty. They face 15 felony counts in the indictment including grand larceny and criminal tax fraud.
Prosecutor Carey Dunne described a 15-year scheme “orchestrated by the most senior executives,” including CFO Allen Weisselberg, that was “sweeping and audacious.”
Trump himself was not charged at this stage of the investigation, jointly pursued by Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James, both Democrats. Dunne asserted politics played no role in the decision to bring charges.
“Politics has no role in the jury chamber and I can assure you it had no role here,” Dunne said.
In court, Trump Organization lawyer Alan Futerfas said Dunne’s remarks sounded like a “press release.”
“If the name of the company was something else, these charges would not have been brought,” Futerfas added outside court.
Vance declined to comment on the case as he arrived at the courthouse Thursday. He remained silent as he and James departed in the afternoon. James’ office later released a statement calling the indictment “an important marker in the ongoing criminal investigation” into Trump’s company and its CFO.
“This investigation will continue, and we will follow the facts and the law wherever they may lead,” the statement read.
The indictment says that Weisselberg, 73, concealed that he was a New York City resident to avoid city income tax.
He was photographed walking into a building that houses both the criminal courts and the Manhattan district attorney’s office around 6:20 a.m. Thursday. He was led into court in the afternoon with his hands cuffed behind his back.
The case against Weisselberg — a loyal lieutenant to Trump and his real estate-developer father, Fred — could give prosecutors the means to pressure the executive into cooperating and telling them what he knows about Trump’s business dealings.
In a statement issued early Thursday morning, Weisselberg lawyers Mary Mulligan and Bryan Skarlatos said he “intends to plead not guilty and he will fight these charges in court.”
The Trump Organization issued a statement defending Weisselberg, saying the 48-year employee is being used by the Manhattan district attorney’s office as “a pawn in a scorched-earth attempt to harm the former president.” It said neither the IRS nor any other district attorney would ever think of bringing such charges over employee benefits.
“This is not justice; this is politics,” the company said.
Trump did not respond to reporters’ shouted questions about the New York case as he visited Texas on Wednesday, but earlier in the week, the Republican had blasted the New York prosecutors as “rude, nasty, and totally biased” and said his company’s actions were “standard practice throughout the U.S. business community, and in no way a crime.”
Vance, who leaves office at the end of the year, has been conducting a wide-ranging investigation into a variety of matters involving Trump and the Trump Organization.
His office has looked into hush-money payments paid to women on Trump’s behalf and truthfulness in the company’s property valuations and tax assessments, among other matters.
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 assigned two lawyers from her office to work with Vance’s team after her office found evidence of possible criminal wrongdoing while conducting a separate civil investigation of Trump.
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Weisselberg, 73, had come 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 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 avoided paying more than $900,000 in federal, state and city income taxes and collected about $133,000 in refunds to which he was not entitled, prosecutors said.
According to the indictment, Weisselberg paid for rent on his Manhattan apartment with company checks and directed the company to pay for his utility bills and parking. The company also paid for private school tuition for Weisselberg’s grandchildren with checks bearing Donald Trump’s signature, for Mercedes-Benz 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 part of Weisselberg’s employee 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 for his Florida residence, prosecutors said.
Barry’s ex-wife, Jen Weisselberg, has been cooperating with both inquiries and given investigators reams of tax records and other documents.
The Trump Organization is the business entity through which the former president manages his many entrepreneurial affairs, including his investments in office towers, hotels and golf courses, his many marketing deals and his television pursuits. Trump sons, Donald Jr. and Eric, have been in charge of the company’s day-to-day operations since he became president.
Although Trump isn’t expected to be charged Thursday, allegations against the company bearing his name raise questions about his knowledge of — or involvement in — business that practices prosecutors suspect were illegal.
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 other forms of compensation — like the use of an apartment or automobile.
Such perks wouldn’t be considered taxable income if they were required as a condition of employment, Repetti said, such as providing an apartment for the convenience of an employee who is required to be at the office or worksite at odd or frequent hours, or allowing the use of a car for business purposes.
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. “The temptation for the business is that it claims a tax deduction for the expense, while the recipient does not report it in income.”
Michael Cohen, the former Trump lawyer who’s been cooperating with Vance’s investigation, wrote in his book “Disloyal,” that Trump and Weisselberg were “past 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, working his way up.
Keeping a low profile — aside from a 2004 appearance as a guest 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 porn actress Stormy Daniels. The finance chief made headlines again when it was revealed that his signature appeared on one of the reimbursement checks.
Barbara Res, who oversaw the construction of Manhattan’s Trump Tower, says she was surprised to learn about the seemingly large role Weisselberg has played in Trump’s business. She recalls him years ago just collecting rent, paying bills and doing Trump’s taxes.
“He was the chief accountant, but he wasn’t in the inner circle. He would come in with his head down, ‘Yes, Mr. Trump. No, Mr. Trump,’” Res said. “He’s the only person I knew who would call him Mr. Trump. Now he’s a big shot.”
Read the full indictment