Trump Organization, CFO indicted on tax fraud charges

  • Allen Weisselberg, center, departs Manhattan criminal court, Thursday, July 1, 2021, in New York.  Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged.

    Allen Weisselberg, center, departs Manhattan criminal court, Thursday, July 1, 2021, in New York. Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged. Associated Press

  • FILE - This file photo from Wednesday Jan. 11, 2017, shows President-elect Donald Trump, left, his chief financial officer Allen Weisselberg, center, and his son Donald Trump Jr., right, during a news conference at Trump Tower in New York. Prosecutors in New York are expected to bring the first criminal charges in a two-year investigation into Trump's business practices, accusing his namesake company and its longtime finance chief Weisselberg of tax crimes.

    FILE - This file photo from Wednesday Jan. 11, 2017, shows President-elect Donald Trump, left, his chief financial officer Allen Weisselberg, center, and his son Donald Trump Jr., right, during a news conference at Trump Tower in New York. Prosecutors in New York are expected to bring the first criminal charges in a two-year investigation into Trump's business practices, accusing his namesake company and its longtime finance chief Weisselberg of tax crimes. Associated Press

  • Cyrus Vance Jr., New York County District Attorney, arrives at New York State supreme court, Thursday, July 1, 2021, in New York. Allen Weisselberg, the Trump Organization's longtime chief financial officer has surrendered to authorities ahead of an expected court appearance on the first criminal indictment in a two-year investigation into business practices at Donald Trump's company.

    Cyrus Vance Jr., New York County District Attorney, arrives at New York State supreme court, Thursday, July 1, 2021, in New York. Allen Weisselberg, the Trump Organization's longtime chief financial officer has surrendered to authorities ahead of an expected court appearance on the first criminal indictment in a two-year investigation into business practices at Donald Trump's company. Associated Press

  • The Trump Organization's Chief Financial Officer Allen Weisselberg appears in court in New York, Thursday, July 1, 2021.  Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged.

    The Trump Organization's Chief Financial Officer Allen Weisselberg appears in court in New York, Thursday, July 1, 2021. Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged. Associated Press

  • The Trump Organization's Chief Financial Officer Allen Weisselberg appears in court in New York, Thursday, July 1, 2021. Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged.

    The Trump Organization's Chief Financial Officer Allen Weisselberg appears in court in New York, Thursday, July 1, 2021. Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged. Associated Press

  • Allen Weisselberg arrives to Manhattan criminal court, Thursday, July 1, 2021, in New York. The charges against the Trump Organization and the company's chief financial officer, Weisselberg, remained sealed Wednesday night, but were expected to involve alleged tax violations related to benefits the company gave to top executives, possibly including use of apartments, cars and school tuition, people familiar with the case said.

    Allen Weisselberg arrives to Manhattan criminal court, Thursday, July 1, 2021, in New York. The charges against the Trump Organization and the company's chief financial officer, Weisselberg, remained sealed Wednesday night, but were expected to involve alleged tax violations related to benefits the company gave to top executives, possibly including use of apartments, cars and school tuition, people familiar with the case said. Associated Press

  • The Trump Organization's Chief Financial Officer Allen Weisselberg appears in court in New York, Thursday, July 1, 2021.  Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged.

    The Trump Organization's Chief Financial Officer Allen Weisselberg appears in court in New York, Thursday, July 1, 2021. Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged. Associated Press

  • New York Attorney General Letitia James arrives to a New York courthouse, Thursday, July 1, 2021. New York prosecutors are expected to announce the first criminal indictment Thursday in a two-year investigation into former President Donald Trump's business practices, accusing his namesake company and Allen Weisselberg of tax crimes related to fringe benefits for employees.

    New York Attorney General Letitia James arrives to a New York courthouse, Thursday, July 1, 2021. New York prosecutors are expected to announce the first criminal indictment Thursday in a two-year investigation into former President Donald Trump's business practices, accusing his namesake company and Allen Weisselberg of tax crimes related to fringe benefits for employees. Associated Press

  • Cyrus Vance Jr., New York County District Attorney, center left, and Letitia James, Attorney General of New York, center right, arrive at New York State supreme court, Thursday, July 1, 2021, in New York. The charges against the Trump Organization and the company's chief financial officer, Allen Weisselberg, remained sealed Wednesday night, but were expected to involve alleged tax violations related to benefits the company gave to top executives, possibly including use of apartments, cars and school tuition, people familiar with the case said.

    Cyrus Vance Jr., New York County District Attorney, center left, and Letitia James, Attorney General of New York, center right, arrive at New York State supreme court, Thursday, July 1, 2021, in New York. The charges against the Trump Organization and the company's chief financial officer, Allen Weisselberg, remained sealed Wednesday night, but were expected to involve alleged tax violations related to benefits the company gave to top executives, possibly including use of apartments, cars and school tuition, people familiar with the case said. Associated Press

  • Allen Weisselberg, center, departs Manhattan criminal court, Thursday, July 1, 2021, in New York.  Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged.

    Allen Weisselberg, center, departs Manhattan criminal court, Thursday, July 1, 2021, in New York. Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump's company with tax crimes. Trump himself was not charged. Associated Press

  • Letitia James, Attorney General of New York, center, and Cyrus Vance Jr., New York County District Attorney, right, leave Manhattan criminal court, Thursday, July 1, 2021, in New York. The charges against the Trump Organization and the company's chief financial officer, Allen Weisselberg, remained sealed Wednesday night, but were expected to involve alleged tax violations related to benefits the company gave to top executives, possibly including use of apartments, cars and school tuition, people familiar with the case said.

    Letitia James, Attorney General of New York, center, and Cyrus Vance Jr., New York County District Attorney, right, leave Manhattan criminal court, Thursday, July 1, 2021, in New York. The charges against the Trump Organization and the company's chief financial officer, Allen Weisselberg, remained sealed Wednesday night, but were expected to involve alleged tax violations related to benefits the company gave to top executives, possibly including use of apartments, cars and school tuition, people familiar with the case said. Associated Press

  • Alan Futerfas, right, and members of the Trump Organization's defense team leave court, Thursday, July 1, 2021 in New York. New York prosecutors announced the first criminal indictment in a two-year investigation into Trump's business practices, accusing his namesake company and Allen Weisselberg of tax crimes related to fringe benefits for employees.

    Alan Futerfas, right, and members of the Trump Organization's defense team leave court, Thursday, July 1, 2021 in New York. New York prosecutors announced the first criminal indictment in a two-year investigation into Trump's business practices, accusing his namesake company and Allen Weisselberg of tax crimes related to fringe benefits for employees. Associated Press

 
 
Updated 7/1/2021 8:37 PM

NEW YORK -- Donald Trump's company and its longtime finance chief were charged Thursday in what prosecutors called a 'œsweeping and audacious' tax fraud scheme in which the executive collected more than $1.7 million in off-the-books compensation, including apartment rent, car payments and school tuition.

Trump himself was not charged with any wrongdoing, but prosecutors noted he signed some of the checks at the center of the case. And one top prosecutor said the 15-year scheme was 'œorchestrated by the most senior executives' at the Trump Organization.

 

It is the first criminal case to come out New York authorities' two-year investigation into the former president's business dealings.

According to the indictment, from 2005 through this year, the Trump Organization and Chief Financial Officer Allen Weisselberg cheated tax authorities by conspiring to pay senior executives off the books by way of lucrative fringe benefits and other means.

Weisselberg alone was accused of defrauding the federal government, state and city out of more than $900,000 in unpaid taxes and undeserved tax refunds.

The most serious charge against Weisselberg, grand larceny, carries five to 15 years in prison. The tax fraud charges against the company are punishable by a fine of double the amount of unpaid taxes, or $250,000, whichever is larger.

The 73-year-old Weisselberg has intimate knowledge of the Trump Organization's financial dealings from nearly five decades at the company. The charges against him could enable prosecutors to pressure him to cooperate with the investigation and tell them what he knows.

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Both Weisselberg and lawyers for the Trump Organization pleaded not guilty. Weisselberg was ordered to surrender his passport and was released without bail, leaving the courthouse without comment.

In a statement, Trump condemned the case as a 'œpolitical Witch Hunt by the Radical Left Democrats.' Weisselberg's lawyers said he will 'œfight these charges.'

The case is being led by Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James, both Democrats.


Vance has been investigating a wide range of matters involving Trump and the Trump Organization, such as hush-money payments made to women on Trump's behalf and whether the company falsified the value of its properties to obtain loans or reduce its tax bills.

The news comes as Trump has been more seriously discussing a possible comeback run for president in 2024. He has ramped up his public appearances, including holding his first rallies since leaving the White House.

                                                                                                                                                                                                                       
 

In announcing the grand jury indictment, Carey Dunne, a top deputy in Vance's office, said: 'œPolitics has no role in the jury chamber, and I can assure you it had no role here."

The Trump Organization is the entity through which the former president manages his many ventures, including his investments in office towers, hotels and golf courses, his many marketing deals and his TV pursuits. Trump's sons Donald Jr. and Eric have been in charge of day-to-day operations since he became president.

In addition to exposing the Trump Organizations to fines, the criminal case could make it more difficult for the business to secure bank loans or strike deals - a hit that comes at a particularly bad time, with the company already reeling from lost business because of the coronavirus and the backlash over the Jan. 6 attack on the Capitol.

'œCompanies that are being indicted, whether they are private or public, big or small, face serious collateral consequences,' said Daniel Horwitz, a white-collar defense attorney. 'œCompanies in the financial services industry are reluctant to do business with them. Their access to capital is limited or cut off."

Weisselberg came 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 he 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 he avoided paying hundreds of thousands in federal, state and city income taxes while collecting about $133,000 in refunds to which he was not entitled, prosecutors said.

According to the indictment, Weisselberg paid rent on his Manhattan apartment with company checks and directed the company to pay for his utility bills and parking, too.

The company also paid for private school tuition for Weisselberg's grandchildren with checks bearing Trump's signature, as well as for Mercedes 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 being part of Weisselberg's 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, prosecutors said.

Barry Weisselberg's ex-wife has been cooperating with investigators and given them reams of tax records and other documents.

Two other Trump executives who were not identified by name also received substantial under-the-table compensation, including lodging and the payment of automobile leases, the indictment said.

Weisselberg has a reputation as a workaholic utterly devoted to Trump's interests. So far, there is no sign that he is about to turn on the former president.

'œI think it's possible that Weisselberg would reconsider. Seeing the charges spelled out in this much detail, and seeing that the alleged federal tax loss is included, could in theory change his mind," said Daniel R. Alonso, former chief assistant district attorney. 'œOn the other hand, he is a loyal Trump soldier, which obviously argues against his cooperation.'

Trump has said his company's actions were standard practice in the business and in no way a crime. The Trump Organization accused the district attorney's office of using Weisselberg as 'œa pawn in a scorched-earth attempt to harm the former president.' It said the DA's office and the IRS have never before brought criminal charges against a company over employee benefits.

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 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 on other forms of compensation.

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.

'œThe IRS routinely looks for abuse of fringe benefits when auditing closely held businesses,' Repetti said.

Michael Cohen, the former Trump lawyer who has been cooperating with Vance's investigation, wrote in his book 'œDisloyal' that Trump and Weisselberg were 'œmasters 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, and rose in the organization.

Keeping a low profile - aside from a 2004 appearance as a judge on Trump's reality TV show 'œThe 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 Stormy Daniels, the porn star who said she had sex with Trump.

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Sisak reported from New Jersey. Associated Press writers Bernard Condon in New York and Jill Colvin in Weslaco, Texas, contributed to this report.

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On Twitter, follow Mike Sisak at twitter.com/mikesisak and Tom Hays at twitter.com/APtomhays

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