Trump Organization Finance Chief Details the Birth of Tax-Fraud Scheme

[maestrob]

Allen H. Weisselberg came close to tears as he told how money for cars, apartments and tuition was camouflaged in the ledgers of the company he served.

By Jonah E. Bromwich, Ben Protess and Lola Fadulu
Published Nov. 17, 2022
Updated Nov. 18, 2022, 7:28 a.m. ET

The criminal trial of Donald J. Trump’s family business took an emotional turn Thursday as one of the former president’s most loyal executives laid bare the machinery of a sprawling tax fraud, scoring points for both prosecution and defense during hours of illuminating testimony.

The executive, Allen H. Weisselberg, several times bolstered Manhattan prosecutors’ contention that the scheme benefited not just himself, but the Trump Organization. He testified that the off-the-books luxuries he and other executives received saved the company money in taxes.

Yet Mr. Weisselberg, 75, who started working for the Trumps decades ago, rose to become chief financial officer and is now the prosecution’s star witness, also distanced Mr. Trump and his family from the wrongdoing. He testified that they did not team up with him, nor authorize him to commit crimes. He agreed more than a dozen times that he had acted only for himself. Near tears, he testified that he had betrayed a company he had served for decades.

And asked by a defense lawyer, Alan Futerfas, whether he was embarrassed, Mr. Weisselberg, his gravelly voice soft, replied, “More than you can imagine.”

The testimony, which unspooled over more than seven hours in a chilly downtown courtroom, injected a burst of human drama into what has otherwise been a dissection of financial minutiae. The jury, subdued during the trial's early days, appeared captivated by what might become the proceeding’s most crucial moments.

To avoid a long prison sentence, Mr. Weisselberg in August pleaded guilty to 17 felonies and agreed to testify against the Trump Organization. But he remains on its payroll, collecting a $640,000 salary, and has refused to turn on Mr. Trump, the subject of a broader investigation by the Manhattan district attorney’s office.

With his freedom and livelihood on the line, Mr. Weisselberg is the man in the middle. He is caught between the prosecutors with whom he struck a deal and the family that has employed him for nearly a half-century.

“Mr. Weisselberg’s legal situation is as complex as that faced by any witness,” said his lawyer, Nicholas A. Gravante Jr., noting that Mr. Weisselberg had to testify even though he continues to be “a loyal employee of the Trump Organization.” He added that Mr. Weisselberg will “answer every question truthfully, and let the chips fall where they may.”

In recent weeks, Mr. Gravante and Mr. Weisselberg met with both sides to prepare for his testimony, an unusual arrangement that underscores the delicacy of Mr. Weisselberg’s position.

The extensive preparation also reflects the importance of his testimony: The outcome of the trial may hinge on what Mr. Weisselberg says. If the company is convicted, facing financial penalties for felonies, his testimony will almost certainly have been invaluable.

Even an acquittal for the companies may not erase the stigma of a longtime lieutenant — someone whom Mr. Trump once called “a wonderful guy” — delivering an incriminating narrative to an eager courtroom. Mr. Weisselberg’s testimony, which began the same week Mr. Trump announced his third presidential run, will leave a lasting mark on the company, no matter the verdict.

The case centers on the inner workings of the Trump Organization, where Mr. Weisselberg and other executives were compensated under the table with lavish perks. Mr. Weisselberg failed to pay taxes on those benefits, which included his plush Manhattan apartment, tuition for his grandchildren, his leased Mercedes-Benzes and even his cable bill.

Mr. Weisselberg and the company were charged in the summer of 2021; a year later, he pleaded guilty, reaching a deal with prosecutors that required him to testify truthfully about the scheme. If he does so, he is expected to be sentenced to five months in jail and with good behavior could end up serving as little as 100 days behind bars.

But if the judge overseeing the case concludes that Mr. Weisselberg lied on the stand, he could face as much as 15 years in prison.

Already, Mr. Weisselberg has provided crucial testimony to support the prosecution’s case, admitting in his first appearance on the stand Tuesday that he had received the perks and that he knew he failed to pay taxes on them.

On Thursday, he built on those admissions, detailing the organic origins of the scheme, which was more a crime of opportunity than sophistication. It was enabled by the disorganization of the company’s accounting department and developed over the years.

As the company grew from a local real estate developer to a small empire that operated casinos and international properties, new perks were added on an ad hoc basis. At one point, Mr. Weisselberg learned that other employees received luxury cars; asked if he wanted one, too, “I said, ‘sure,’” he testified.

Yet another benefit was born of a casual remark from the boss. In explaining the origins of Mr. Trump personally paying the tuition for Mr. Weisselberg’s grandchildren, Mr. Weisselberg described a scene that took place in Mr. Trump’s office years ago, in which Mr. Trump was lamenting the expense of his own grandchildren’s tuition.

“If I have to pay more in the way of tuition bills for these kids, I may as well pay your grandkids’ too,” he said to Mr. Weisselberg, half-joking. But days later, Mr. Weisselberg walked back into Mr. Trump’s office with an invoice for the tuition, and soon Mr. Trump was paying it.

The testimony established the former president’s closest link to the tax scheme. While prosecutors have not accused Mr. Trump or his family of being involved in the scheme, they have sought to link him to some of the perks, a strategy that could help grab the jury’s attention.

Mr. Weisselberg testified that, after initially saying that he would repay Mr. Trump, he never did. When the lead prosecutor, Susan Hoffinger, asked Mr. Weisselberg how much the tuition actually cost, he quipped, “It was too much,” offering a rare moment of levity before saying that it was $100,000.

To prove their case against the Trump Organization, prosecutors must show that Mr. Weisselberg was acting “in behalf of” the company. While that phrase is open to some interpretation, the judge, Juan Merchan, has said that prosecutors must introduce evidence that Mr. Weisselberg’s “acts were not undertaken solely” for his own interests.

Under questioning from prosecutors on Thursday morning, Mr. Weisselberg appeared to provide them ammunition for the argument that he was acting in behalf of the company. Although he did not repay Mr. Trump directly for the tuition, he subtracted the money from his overall compensation. Mr. Weisselberg testified that he essentially paid the family back by reducing his salary and his bonus.

“The amount of money I was being given was too much, and I thought the right thing to do was pay the company back,” Mr. Weisselberg said.

Ms. Hoffinger also asked Mr. Weisselberg how an aspect of the scheme involving health care benefits benefited the company. “They were able to save a small portion of Medicare taxes,” he answered.

But if the company has a chance of securing an acquittal, or even a hung jury, the defense laid the groundwork on cross-examination.

Mr. Futerfas coaxed Mr. Weisselberg into acknowledging that Mr. Trump was not to blame for the scheme, saying, “He didn’t authorize you to commit tax fraud, did he?” Mr. Weisselberg agreed that Mr. Trump did not.

And when Mr. Futerfas asked Mr. Weisselberg, “Were you reducing the compensation because you didn’t want to hurt the company?” He responded, “No, my intention was to save pretax dollars,” a key admission that could undercut the prosecution’s attempt to show that Mr. Weisselberg was not acting solely for his own benefit.

Mr. Futerfas, referring to the tuition, asked if it was “solely done to benefit you, Allen Weisselberg.” Mr. Weisselberg agreed that it was.

Mr. Weisselberg’s testimony has presented a vexing challenge for the Trump Organization’s lawyers. They are eager to pin the tax scheme on him, with one of the company’s lawyers, Michael van der Veen, repeating throughout the trial that “Weisselberg did it for Weisselberg.”

And as cross-examination continues, the Trump Organization’s lawyers might suggest that Mr. Weisselberg agreed to testify only under duress, noting that he could have faced years in prison if not for the plea deal.

But the lawyers have also been careful to portray Mr. Weisselberg, whose cooperation prosecutors are seeking in the broader investigation of Mr. Trump’s business practices, in a compassionate light.

“Since the crimes have been discovered, he has been treated like a close family member who made serious and even criminal mistakes,” Mr. van der Veen said in his opening argument. “It’s a story as old as time. We all know the Bible story of the prodigal son.”

https://www.nytimes.com/2022/11/17/nyre ... trial.html

[Rach3]

To think for one second Trump did not know ,think,and/or inquire if , the $100k tuition payment would be claimed as a tax deduct by the company is to ignore the tax payment avoidance history, tax avoidance mantra, refusal to publicize tax returns, of the total narcissist.