The Trump Organization's chief financial officer Allen Weisselberg was paraded in court wearing handcuffs on Thursday to hear charges that he failed to pay taxes for years on a company car, apartment and school fees for his grandchildren.
The investigation has cost millions of dollars but could yield just tens of thousands of dollars in back tax.
Weisselberg is accused of failing to pay tax on $1.76 million of perks since 2005, according to the 25-page indictment.
The Trump Organization was also charged in a 15-count indictment, that included charges of conspiracy, grand larceny, tax fraud and falsifying business accounts. The maximum prison sentence is 15 years, but he would likely get less, if any time at all.
Assistant District Attorney Carey Dunne said: 'As spelled out in the indictment, this was a 15-year long tax fraud scheme.
'It was orchestrated by the most senior executives who were financially benefiting themselves and others.'
Prosecutors unveiled their case against Allen Weisselberg and the Trump Organization in Manhattan Supreme Court on Thursday. It contained 15 charges, several of which only apply to the chief financial officer. They are:
The indictment accused Weisselberg of failing to pay tax on two leased Mercedes-Benzes, a rent-free apartment, bonuses and school fees paid for by the Trump Organization.
It also said that other, unnamed executives were given similar benefits and that Weisselberg orchestrated the scheme with 'others.'
Weisselberg, dressed in dark suit and open-necked pale blue shirt, cut a diminished figure in a crowded New York Supreme Court.
He was frequently invisible behind black shirted court officers and spoke only to enter a plea of not guilty. He was required to turn in his passport and will return to court on September 9.
The charges against the company and Weisselberg - whom Trump once praised as doing 'whatever was necessary to protect the bottom line' - were the first indictments delivered in a two-year investigation by the Manhattan district attorney's office.
The various schemes alleged in the indictment include: $1,174,018 in untaxed income used to pay Weisselberg's rent $359,058 in unreported compensation for private school fees $196,245 in untaxed income for Mercedes Benz leases $29,400 in under-the-table cash used to pay holiday tips
Trump Organization lawyers believe they can strip out the school fees and some other items from the charges, possibly reducing the taxable amount to $800,000.
With a state income tax rate of about 10 percent, that means Weisselberg may face a tax bill of just $80,000.
But the real target may be creating enough leverage to persuade him to 'flip,' according to Michael Cohen, who was sentenced to three years in prison for crimes related to his work as Trump's fixer.
'Weisselberg now knows what handcuffs feel like as well as being placed in a cell,' he told DailyMail.com.
'As the pressure by prosecutors increase on him and his sons, the smart money would be on Weisselberg cooperating for leniency.'
The charges could also complicate the Trump Organization's relationships with banks and partners, not to mention the political future of the former president.
'The political witch hunt by the radical left Democrats, with New York now taking over the assignment, continues,' he said in a statement. 'It is dividing our country like never before.'
His office emailed another statement later in the afternoon, linking the case more directly to the votes of his supporters.
He asked: 'Do people see the radical left prosecutors, and what they are trying to do to 75M+++ voters and patriots, for what it is?'
New York Attorney General Letitia James said the developments were an 'important marker' in the investigation of the Trump Organization.
'This investigation will continue, and we will follow the facts and the law wherever they may lead,' she said.
Charges against the Trump Organization and one of its most senior executives are expected on Thursday.
The Manhattan district attorney has spent months investigating whether chief financial officer Allen Weisselberg avoided paying taxes on company perks.
Some of the details are believed to have emerged from documents saved by his daughter-in-law Jennifer Weisselberg after an acrimonious divorce from his son Barry.
The perks reportedly include:
But Trump's son Eric blasted the investigation before the charges were unsealed, saying taxpayers' money had been wasted.
'It is an absolute abuse of power and a political vendetta,' he told DailyMail.com.
'They are petrified my father will run again in 2024.
'After five years, hundreds of subpoenas, three and a half million pages of documents, and dozens of witnesses, this is what they have?'
The Trump Organization described Weisselberg as 'a loving and devoted husband, father and grandfather.'
'He is now being used by the Manhattan District Attorney as a pawn in a scorched earth attempt to harm the former President,' it said in a statement.
'The District Attorney is bringing a criminal prosecution involving employee benefits that neither the IRS nor any other District Attorney would ever think of bringing.
'This is not justice; this is politics.'
The case against Trump's trusted lieutenant - who began work for the Trump family in 1973 - could give New York prosecutors an opening to pressure him into cooperating and offering evidence about the former president's financial dealings.
But so far Trump has shrugged off the threat and Weisselberg is not believed to have flipped on his boss.
Insiders say he is like a member of the family and are confident he will not give evidence against his employer.
'He's a great guy, just one of the best,' said one. 'Comes in, does his job, has the same lunch every day and goes home to his wife.
Another source said Trump viewed Weisselberg, two years his junior, like a brother.
The indictment follows months of increasing pressure after the Manhattan DA Cyrus Vance, a Democrat, announced he was going to step down at the end of this 2021.
Vance fought a long battle to get Trump's tax records and has been subpoenaing documents and interviewing company executives and other Trump insiders.
Trump did not respond to reporters' shouted questions about the New York case as he visited Texas on Wednesday, but earlier in the week, the Republican had blasted the prosecutors as 'rude, nasty, and totally biased' and said his company's actions were 'standard practice throughout the U.S. business community, and in no way a crime.'
Just how essential Weisselberg would be to prosecutors is a matter of debate – with high-stakes relevancy Trump.
On Tuesday, top House Democratic impeachment lawyer Daniel Goldman tweeted that Weisselberg's cooperation is vital to whether prosecutors are able to go after Trump himself.
'As I've been saying for a while, if Allen Weisselberg does not cooperate with the Manhattan DA's office — and all indications are that he has not and will not — that office will not be able to criminally charge Donald Trump for any of the conduct under investigation,' Goldman wrote.
That drew a retort from longtime Trump lawyer and fixer Michael Cohen, who has met numerous times with prosecutors in New York amid the probe.
'Wrong! They have documents to prove more than you know or should be commenting on. Weisselberg is not the key to a Trump indictment,' Cohen responded.
Another former federal prosecutor in New York, Daniel Alonson, later tweeted his own view that that potential charges being publicly discussed might not be enough to ensure Weisselberg's cooperation.
Cohen also reacted Wednesday to the news of a looming potential indictment, calling it a 'Bad day for Trump Organization' but a 'good day for The United States of America!'
'Evading taxes on fringe benefits is important to prosecute - but by itself isn't the type of earth-shaking charge that typically leads defendants to cooperate,' he wrote.'
Trump's former spokesman Jason Miller took to Twitter to ridicule the way the investigation had fallen far short of its intended target.
'This is politically terrible for the Democrats,' he wrote.
'They told their crazies and their supplicants in the mainstream media this was about President Trump. Instead, their Witch Hunt is persecuting an innocent 80 year-old man for maybe taking free parking!'
Trump's lawyers have shrugged off the threat, saying it would be highly unusual for the district attorney to target a company over employee compensation or fringe benefits.
They met with prosecutors on Monday in a final push to persuade prosecutors not to bring charges.
But reports suggest prosecutors have spent months building a case against Weisselberg, a senior executive, in the hope that he might flip, and offer evidence against his boss.
Photographs on Tuesday captured a man in a suit carrying a cardboard banker's box with '45 Office' written on the outside. That is the same phrase the former president attaches to his post-presidential statements from his taxpayer-funded post-presidential office. Perched atop the case was a tan briefcase with a combo lock.
Trump himself was spotted exiting his Fifth Avenue building in the afternoon, departing after longtime aide Dan Scavino, who helps organize Trump's social media strategy and served as his golf caddie decades ago.
Trump's attorney Fischetti says he doesn't expect charges to be brought against the former president after meeting New York prosecutors on Monday.
Weisselberg helped run the company when Donald Trump took the White House.
He has been identified as one of the principal figures with legal exposure after prosecutors combed through company finances and picked through unusual pay and benefit packages including up to $500,000 in prep school tuition for his grandchildren.
His former daughter-in-law, Jennifer Weisselberg, told CNN Monday night she is willing to testify to a federal grand jury meeting in Manhattan.
'We're prepared, and we are getting prepared,' she said.
She was previously married to Weisselberg's son, Barry. She did not say whether prosecutors had requested her to testify, although she has handed over voluminous documents.
During the meeting, senior officials with the Manhattan District Attorney's Office and the New York State Attorney General's Office met with Trump defense lawyers who highlighted the damage the company could face, should an indictment occur.
The two prosecutors' offices - now working together in their probe against Trump - did not indicate whether they'd decided to press charges.
But the collateral damage from any indictments could spread far and wide, affecting relationships with banks and other business partners, Trump Organization lawyers are purported to have said.
Meetings to discuss 'collateral consequences' are routine in white-collar investigations when charges are near, according to the New York Times.
The meeting, conducted through video conferencing, lasted for less than an hour.
In a lengthy and rambling statement issued on Monday, Trump called the DA's investigation 'a continuation of the greatest witch hunt of all time' and claimed prosecutors 'failed' to find a crime despite 'millions of dollars of taxpayer funds wasted.'
Trump railed against the prosecution in his response.
'They will do anything to stop the MAGA movement (and me),' the former president said.
'They also know that no matter how strong our case, they will work hard to embarrass us and the Republican Party.'
He claimed the prosecution of his business organization meant other companies would see it as a reason not to station their businesses in New York.
'Having politically motivated prosecutors, people who actually got elected because they will 'get Donald Trump,' is a very dangerous thing for our Country. In the end, people will not stand for it. Remember, if they can do this to me, they can do it to anyone! Why would anyone bring their company to New York, or even stay in New York, knowing these Radical Left Democrats would willingly target their company if viewed as a political opponent? It is devastating for New York!,' Trump said.
He also claimed to be the victim after he saved the country from COVID.
'These witch hunters are relentlessly seeking to destroy a reputation of a president who has done a great job for this country, including tax and regulation cuts, border control, rebuilding the military, and developing the vaccine in record time - thereby saving our country, and far beyond.
'Washington, D.C. and ultimately, the U.S. Supreme Court, should finally stop these vicious, angry, and highly partisan prosecutors. They are a disgrace to our nation,' he concluded.
Meanwhile, Fischetti said he was told the charges against the Trump Organization and its individual employees related to alleged failures to pay taxes on corporate benefits and perks.
That cash is said to have been paid by both Weisselberg and Trump, as a gift to Weisselberg's son Barry, whose kids were attending the facility.
Prosecutors are believed to be probing whether those gifts should have been declared as such, which would have made them eligible for tax payments.
Charges will likely not be related to so-called 'hush money' payments that former Trump attorney Michael Cohen said were made to porn star Stormy Daniels during the 2016 presidential campaign.
'Nothing. Not a word on that,' he said.
Cohen paid Daniels $130,000 in October 2016, a month before the election, to stop her discussing the alleged affair with Trump, which Trump denied having. The New York Times reported that, in court documents, Cohen said Trump Organization officials were involved in the payoff. Cohen pleaded guilty to eight federal charges on August 21, 2018, including a campaign finance violation, for his role in the payment.
Nor would the charges be related to concerns The Trump Organization used misleading valuations of its properties to deceive lenders, it is claimed.
'We asked, 'Is there anything else?' Fischetti told Politico. 'They said, 'No.'
'It's crazy that that's all they had,' he added.
He noted he expects charges to be filed against the company this week or next.
The charges would be the first criminal allegations to emerge from Vance's long-running investigation into Trump's business work in New York.
Over the past few weeks, a grand jury has been hearing evidence about Weisselberg, with prosecutors obtaining the executive's personal tax returns. Companies can be tried for crimes, and if they are convicted or plead guilty, they would face fines and other penalties.
Letitia James, the New York State Attorney General running a civil probe, has also reportedly acquired those tax returns. James' office had been investigating whether Trump's company falsely reported property values to secure loans and obtain economic and tax benefits.
Earlier, prosecutors were also able to obtain the personal bank records of Weisselberg.
Investigators are looking at whether or not Weisselberg failed to pay taxes on benefits over the years, including apartments, leased cars and private school tuition for two of Weisselberg's grandchildren.
To that end, prosecutors have subpoenaed records from an Upper West Side private school, the Columbia Grammar and Preparatory School.
Meanwhile, Weisselberg's former daughter-in-law, Jennifer, has been interviewed in the probe six times and is cooperating with prosecutors.
She has been asked about the tuition payments, as well gifts her ex-husband, Barry, received from Trump, such as leased cars and an apartment on Central Park South.
A Democratic prosecutor nearing the end of his term, a loyal lieutenant of the Trump family and a lawyer determined to sink his former boss: AFP details some of the players in New York's criminal probe into Donald Trump.
Cyrus Vance
The 66-year-old Democrat has been Manhattan District Attorney since 2010. He was the first to launch a criminal investigation into the Republican ex-president.
Vance, whose father was US Secretary of State under President Jimmy Carter, has sometimes been accused of a reluctance to prosecute the rich and powerful.
He delayed filing charges against disgraced producer Harvey Weinstein before securing a landmark conviction last year.
Vance has doggedly pursued Trump, though, first by winning a years-long battle to obtain his tax records and secondly by deploying significant human and financial resources to the politically sensitive investigation.
He has announced that he will not run for a fourth term when his current one expires in December, and many observers expect him to go out with a bang by filing what would be the first indictment against a former US president.
Letitia James
The Democrat became the first Black woman to become New York state attorney general in 2018.
Since then, the 62-year-old has forged a reputation as a combative and independent prosecutor, filing countless civil actions against large companies, particularly tech giants, and the National Rifle Association (NRA).
When Trump was in the White House, James launched dozens of civil actions against his government.
She is also investigating New York's powerful Democratic governor, Andrew Cuomo, over sexual harassment allegations and his response to the coronavirus pandemic.
James has been cited as a possible successor to Cuomo, particularly if her investigation forces him to resign.
Allen Weisselberg: Trump Organization CFO
The 73-year-old is the Trump Organization's long-serving chief financial officer and one of the family's most loyal servants.
He began as an accountant for Trump's father's company before joining the Trump Organization as financial controller in the 1980s when Donald established himself as a Manhattan real estate mogul.
Weisselberg has been around for all of Trump's entrepreneurial adventures, including when his Atlantic City casinos went bust.
According to Barbara Res, a former executive vice president at the Trump Organization, Weisselberg 'thought Trump was a god,' she told the Daily News.
Investigators believe Weisselberg knows all of the Trump family secrets and have been putting pressure on him for months to cooperate with their investigation.
Observers are closely watching whether Weisselberg will turn against his former boss.
Jennifer Weisselberg: Ex-daughter in law of Allen Weisselberg
Earlier this year, investigators from the Manhattan District Attorney's office were seen carrying boxes of documents and laptops from Weisselberg's Manhattan apartment.
She was married ton Allen Weisselberg's son Barry from 2004 to 2018.
In an interview with DailyMail.com in June, she said the former president is a 'sweet' and 'generous' man who helped pay for her children's private schooling out of kindness and good-will, rather than to dodge taxes.
If there was any unlawful activity within the Trump Organization it would be thanks to her former in-laws who still work for the company, she told DailyMail.com in an exclusive interview.
Up until 2018, the mother-of-two was married to Barry Weisselberg, who manages Trump's Central Park ice rinks, and her father-in-law was Allen Weisselberg, who became the chief financial officer when Trump became president.
'Allen orchestrated the finances, and Donald is just sort of naïve,' Jennifer said.
'It's provable that his trusted CFO is putting [Trump] and his children in a bad legal position.'
She is also set to testify to the grand jury.
Jeff McConney: Trump Organization Senior Vice President
McConney was known as the man in the Trump Organization who would hand over key documents to Trump and CFO Allen Weisselberg before meetings and would be responsible for cutting checks for big payments.
He was the first high-profile member of Trump's business empire known to have testified in front of the New York Grand Jury deciding whether to indict Trump.
Trump's fixer Michael Cohen told The Daily Beast: 'Think of The Trump Organization as a small, one-teller bank.
'Donald [Trump] would be the president. Allen [Weisselberg] would be the branch manager. Jeff [McConney] would be the teller. Every single transaction was booked through McConney.
Concerns for prosecutors is that McConney is seen as a Trump loyalist and, as The Daily Beast reported, someone who hates left-wing politics.
Michael Cohen
Trump's ex-personal lawyer was sentenced to three years in prison in 2018 for tax evasion and violating campaign finance laws relating to Trump's 2016 vote win.
Cohen was one of Trump's closest henchmen for a decade, once proudly boasting that he was prepared to 'take a bullet' for the real estate mogul-turned-president.
He turned against his former boss, though, deciding to collaborate with federal investigators in Manhattan.
During a Congressional hearing in February 2019, Cohen alleged -- among other things -- that Trump regularly undervalued or overvalued his assets, both with banks and insurance companies.
Cohen openly rejoices in Trump's legal troubles on Twitter and through his podcast 'Mea Culpa.'
Source: AFP
