Trump’s company ‘cheated’ tax authorities, prosecutor says at trial

Former President Donald Trump’s real estate company cheated tax authorities for 15 years, a prosecutor said on Monday in her opening statement in the Trump Organization’s criminal tax fraud trial, while defense lawyers said the company’s longtime chief financial officer was only acting on his own behalf.

The company paid certain executives – including CFO Allen Weisselberg – in perks such as rent and car leases without reporting those benefits to tax authorities, and falsely reported bonuses as non-employee compensation, said Susan Hoffinger, a prosecutor with the Manhattan district attorney’s office.

The case is among the mounting legal troubles facing the 76-year-old Trump as he considers another bid for the presidency after losing in 2020.

Weisselberg, who has worked for Trump for nearly half a century, in August pleaded guilty and agreed to testify as a prosecution witness at trial as part of a plea agreement for him to receive a sentence of five months in jail.

Lawyers for the two Trump Organization units argued Weisselberg cheated on taxes to benefit himself, not the company. Both the Trump Corporation and the Trump Payroll Corporation have pleaded not guilty. Trump has not been charged in the case.

“Weisselberg did it for Weisselberg,” Michael Van Der Veen, a lawyer for the Trump Payroll Corporation, said in his opening statement. “Greed made him cheat on his taxes, hide his deeds from his employer, and betray the trust built over nearly 50 years.”

Hoffinger said Weisselberg was “a prime beneficiary” of the scheme. But she said he acted in his official capacity as a Trump Organization executive, and that the company also benefited by keeping top executives happy and saving on some taxes.

“Everybody wins here,” Hoffinger said. “Of course, everybody but the tax authorities. The problem with doing it this way is that it’s not legal.”

Van Der Veen also sought to shift blame to accounting firm Mazars, which handled the company’s and Weisselberg’s tax returns.

Mazars did not immediately respond to requests for comment. In February, the firm dropped the Trump Organization as a client and said financial statements it prepared for the company from 2011 through 2020 should no longer be relied on.

‘CLEAN UP’

If convicted, the Trump Organization – which operates hotels, golf courses and other real estate around the world – could face up to $1.6 million in fines. It could also further complicate the real estate firm’s ability to do business.

The trial is expected to last over a month. A unanimous verdict is required for conviction on each count of tax fraud, scheming to defraud, and falsifying business records.

Weisselberg admitted in his guilty plea to avoiding taxes on $1.76 million in personal income himself through the scheme. He will be required to pay nearly $2 million in unpaid taxes, penalties and interest, Hoffinger said.

Hoffinger said Trump personally paid for the private-school tuition of Weisselberg’s grandchildren, adding that the jury would see checks signed by Trump himself as evidence.

She said that when Trump was elected president in late 2016, Weisselberg and the company “had to clean up these fraudulent tax practices” due to concerns about additional scrutiny. The companies stopped paying for its employees’ unreported personal expenses, and Weisselberg began paying his grandchildren’s tuition himself, Hoffinger said.

Susan Necheles, a lawyer for the Trump Corporation, said it was Weisselberg – not the company – who wanted to clean things up.

“Donald Trump didn’t know that Allen Weisselberg was cheating on Allen Weisselberg’s personal tax returns,” Necheles said.

Weisselberg stepped down as CFO when he was indicted but remained on the payroll as a senior adviser. After his guilty plea, he continued to be paid but was put on leave.

The day he pleaded guilty, the Trump Organization called Weisselberg a “fine and honorable man” who had been harassed by law enforcement in a “politically motivated quest” to get Trump.

But in a pretrial hearing this month, Necheles accused Weisselberg of lying.

Justice Juan Merchan, the judge overseeing the case, has rejected the argument that the Trump Organization was targeted for selective prosecution.

Two top prosecutors on the case resigned in February, with one saying felony charges against Trump, a Republican, were warranted but that Manhattan District Attorney Alvin Bragg indicated doubts. Bragg, a Democrat, has said the investigation is ongoing.

The case is separate from a $250 million civil lawsuit filed by New York’s attorney general against Trump, three of his adult children and his company in September, accusing them of lying to banks and insurers by overvaluing his real estate assets and Trump’s net worth.

Trump also faces a federal criminal investigation into the removal of government documents from the White House when he left office last year