The Washington PostDemocracy Dies in Darkness

Trump Organization’s criminal trial on fraud charges to start Monday

Manhattan District Attorney Alvin Bragg, center, speaks during a news conference to sign two new gun laws at Times Square on Oct. 11. (Sarah Yenesel/EPA-EFE/Shutterstock)

NEW YORK — The Trump Organization, former president Donald Trump’s namesake company, is set to go on trial Monday for alleged tax crimes — the result of a lengthy investigation into the company and its executives related to fraud and other potentially illegal business practices.

Trump is not charged personally, and the portion of the investigation for which he still could face criminal charges is not yet concluded by Manhattan District Attorney Alvin Bragg’s investigators.

Bragg has promised to announce the results of the remaining parts of the Trump probe when it is finalized, but to date, the only charges filed have been against the Trump Organization, its subsidiary Trump Payroll Corporation and its longtime chief financial officer, Allen Weisselberg.

Weisselberg pleaded guilty in August to 15 counts tied to an alleged longtime fraud scheme within the organization and is required to testify in the trial as part of a plea agreement.

The jury selection scheduled to begin Monday in New York State Supreme Court in Manhattan could involve hundreds of potential panelists. They will probably be asked, among other things, whether their feelings about the former president are so strong they would not be able to set them aside and fairly evaluate evidence.

Prosecutors allege a 15-year tax fraud scheme at the Trump Organization

Prosecutors say the case focuses on what they describe as a 15-year tax-cheating scheme involving untaxed benefits like luxury cars and expensive apartments for executives including Weisselberg, who has been painted as the linchpin to the tax-avoidance operation. Weisselberg began his employment at the Trump Organization in 1973.

Before rising to chief financial officer, Weisselberg, a career Trump Organization employee, was an accountant and comptroller. Weisselberg was among a set of executives who “received substantial portions of their income through indirect and disguised means,” according to an indictment that was filed on July 1, 2021.

Manhattan DA convenes new grand jury in Trump Org. case to weigh potential charges

Weisselberg, who had been slated to stand trial alongside the corporate entity, was promised a sentence of five months in jail if he testifies against the company. He had been facing up to 15 years in prison.

The company is alleged, under Weisselberg’s supervision, to have maintained two sets of books in an effort to conceal the perks that he and others received as compensation. He personally avoided paying $900,000 in taxes based on underreporting of compensation.

Weisselberg, 75, could serve a longer term if it is determined that he lied. But his agreement, formalized in court on Aug. 18, limits his promised testimony in scope. He is supposed to testify only about his own criminal conduct and may be able to avoid discussing Trump directly.

Through those admissions, prosecutors say they will prove the criminal liability transfers to Weisselberg’s employer. Prosecutors tried unsuccessfully in the past to get Weisselberg to cooperate against Trump, people with knowledge of the discussions previously told The Washington Post. Those people spoke on the condition of anonymity to discuss an ongoing investigation.

The Trump Organization and Weisselberg were indicted in mid-2021. The charges followed a protracted legal tug-of-war between Trump and former district attorney Cyrus R. Vance Jr. over subpoenas seeking Trump’s personal and business tax returns issued in 2019 to his longtime accounting firm Mazars USA.

That battle was resolved at the Supreme Court, which established that Trump, as sitting president, did not have immunity in state court matters.

Interest in Trump’s business practices by New York law enforcement was first generated by 2019 congressional testimony given by his former personal lawyer and fixer Michael Cohen. Cohen, who is now an outspoken Trump critic, previously pleaded guilty in federal court to making false statements to Congress and to violating campaign finance laws when he gave $130,000 to adult film actress Stormy Daniels, allegedly on Trump’s behalf, during the 2016 presidential race.

Cohen met a number of times with the district attorney’s office to guide investigators through operations at the Trump Organization. Another company executive, Jeffrey McConney, was subpoenaed to testify to the grand jury that led to the Trump Organization tax case and is likely to take the witness stand in court.

McConney served as comptroller under Weisselberg and is also familiar with many of the company’s practices.

If convicted, the Trump Organization and its subsidiary Trump Payroll Corp. could be hit with a combined $1.6 million in fines by New York Supreme Court Justice Juan Merchan, who is presiding over the case. No individual can be sent to prison as a result of a corporate conviction.

The remaining part of the DA’s criminal investigation — which will not be directly at issue at the trial starting Monday — is focused on Trump’s alleged practice of toying with the value of his assets to deceive lenders to obtain more favorable loan terms by using manipulated figures that were documented in annual financial statements disclosing a breakdown of Trump’s personal wealth.

Trump and the Trump Organization have also been accused of duping insurance companies about the extent of his wealth to get better rates, while minimizing the value of his fortune for tax benefits.

New York Attorney General Letitia James sued Trump, three of his adult children and Weisselberg in September over his use of the financial statements, following her own lengthy probe. Her civil case ran parallel to Bragg’s criminal one, and lawyers from her office have assisted Bragg’s team.

“The inflated asset valuations in the [financial] Statements cannot be brushed aside or excused as merely the result of exaggeration or good faith estimation about which reasonable real estate professionals may differ,” James’s 222-page lawsuit says.

Trump has called the lawsuit baseless and has repeatedly said James was engaged in a “witch hunt” during her examination of the company. The case is pending.

Loading...