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Jury hears opening statements in Trump Organization’s criminal trial

Prosecutors arrive at the New York Supreme Court on Monday in New York City. (Michael M. Santiago/Getty Images)

NEW YORK — The Trump Organization chose “greed and cheating” in a years-long scheme to avoid taxes by using tactics that illegally benefited executives and the organization, a prosecutor said during opening statements in the company’s criminal tax fraud trial Monday.

Former president Donald Trump’s namesake organization, including its payroll-processing subsidiary, the Trump Payroll Corporation, is on trial in New York Supreme Court on charges involving scheme to defraud, conspiracy, criminal tax fraud and falsifying business records.

Prosecutors are expected to examine what they describe as off-the-books bonuses that were doled out to top employees at Trump’s private business as a matter of practice. The public airing comes as Trump faces investigations tied to the Jan. 6, 2021, insurrection at the U.S. Capitol and efforts to overturn the results of the 2020 election.

Evidence in the Trump Organization trial will largely predate the political controversies that shadow Trump. Instead, it will bring into focus the lifestyles of Trump’s top business lieutenants and will explore whether the corporation facilitated fraud from its Trump Tower offices on Fifth Avenue.

“This case is about greed and cheating, cheating on taxes,” prosecutor Susan Hoffinger, who heads the investigation division of the Manhattan District Attorney’s Office, told jurors Monday.

Hoffinger said that the corporate entities on trial the Trump Corporation and the Trump Payroll Corporation, both units of the Trump Organization — gave already highly paid executives even more by helping them cheat on taxes, and that when Trump was elected president in 2016, they “finally had to clean up these fraudulent tax practices.”

The organization also benefited from reducing its employees’ reported income, including by not having to pay Medicare taxes on the amount that wasn’t reported, according to prosecutors. When Trump took office, the Trump Organization, fearing scrutiny, scaled back some perks it gave to executives and started reporting others it continued to bankroll, prosecutors said.

The organization’s longtime chief financial officer, Allen Weisselberg, 75, is expected to be the key witness testifying against the company, which still has him on the payroll although he is on leave. Controller Jeffrey McConney, 67, who is also still employed there and overseeing the company’s payroll operations, began testifying in the case Monday.

Weisselberg pleaded guilty in August and has been promised a sentence of five months in jail in exchange for testifying at the trial. He received $1.76 million in untaxed perks over a number of years, in addition to a roughly $1 million annual salary. He is expected to pay back about $2 million as part of his plea agreement.

Attorney Susan Necheles, who is representing the Trump Corporation, said in her opening remarks that Weisselberg acted on his own behalf and that the company cannot be held criminally liable for employees cheating on their personal taxes.

“The evidence will show the prosecutors’ entire theory of the case makes no sense,” Necheles said.

The trial is a result of a three-year probe of the Trump Organization’s business practices by Manhattan District Attorney Alvin Bragg (D) and former district attorney Cyrus R. Vance Jr. Bragg has said he is still evaluating whether Trump committed crimes when allegedly manipulating the value of his assets to get favorable loan and interest rates, or devaluing his assets to reduce his tax liability.

Trump and three of his adult children who have served as executives at the company have not been charged personally.

The proceedings could last up to six weeks and may involve additional witnesses who still work at the company. Weisselberg and McConney are alleged to have orchestrated a scheme to pad the compensation packages for company executives with perks that weren’t taxed from 2005 to 2021.

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

Weisselberg was the only individual indicted with the companies, and he had been facing up to 15 years in prison.

McConney was a grand jury witness and has been given immunity from prosecution under New York state law.

McConney, who has worked for the corporation for 35 years, testified over several hours as the prosecution’s first witness. He walked jurors through the types of payroll and tax records that the Trump Organization maintained. He also gave the panel a primer on the loose hierarchy of payroll and accounting professionals who work for the company.

“We don’t have a strict structure chart,” he said about a team of workers he supervises.

Prosecutors say McConney and Weisselberg conspired, on behalf of the company, to cheat tax authorities by concealing payments for noncash bonuses that should have been declared.

The panel of 18 jurors sitting on the case included six alternates, although one alternate did not report to court Monday and was released.

The tax fraud and conspiracy case was filed in July 2021 and alleges that Weisselberg and McConney, who ran the company’s finances, kept two sets of books to reflect actual compensation, with unreported executive perks such as cars and pricey apartments, and compensation figures that were reported to state and federal tax authorities.

The Trump Corporation and the Trump Payroll Corporation could owe a combined maximum fine of $1.6 million if convicted.

New York Attorney General Letitia James (D) sued Trump, his three children who served as executives, Weisselberg, McConney and the company last month over the alleged practice of altering asset values to get better loan and insurance rates.

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