October 25, 2022
The criminal tax-fraud trial of the Trump Organization was scheduled to begin with jury selection on Monday, October 24—offering a rare look into an opaque company that prosecutors say illegally paid some executives in cars, apartments, and cash, reports The Wall Street Journal.
The Manhattan District Attorney’s Office alleges that former President Donald Trump’s family business effectively kept two sets of books. In internal records, the company recorded perks—including Mercedes-Benz cars for Chief Financial Officer Allen Weisselberg and his wife, and private-school tuition for his grandchildren—as employee compensation.
But Weisselberg and the company didn’t report the benefits to tax authorities, prosecutors said.
Trump and his family members weren’t charged, although the indictment alleges that the former president signed some checks for private-school tuition. Trump isn’t expected to testify in the case.
The company faces nine criminal counts including conspiracy, criminal tax fraud and falsifying business records. The trial is expected to last about six weeks. Under New York state law, the company faces a maximum of about $1.6 million in fines if convicted on all charges. A criminal conviction could also make it harder for the company to obtain loans and access banking services.
The Trump Organization’s lawyers have said prosecutors brought the case because of the Trump name. “Compensation cases are resolved by civil tax authorities, not criminal charges,” the lawyers said when the charges were announced.
The trial follows a multiyear investigation by the Manhattan District Attorney’s Office into Trump and his company. That investigation initially examined hush-money payments to adult-film actress Stormy Daniels; then, shifted to an examination of whether the Trumps made misrepresentations about the value of their assets to lenders, insurers. and tax authorities. The district attorney’s office, then led by Cyrus Vance Jr., obtained Trump’s tax returns after a legal battle that went to the Supreme Court.
The tax-fraud indictment was an offshoot of that probe. District Attorney Alvin Bragg, who currently leads the office, has said his broader investigation into Trump, his company, and its leadership is ongoing.
Although the allegations at trial revolve around the company’s payroll practices, not its larger real-estate business, prosecutors have said the company engaged in an audacious scheme.
“It was orchestrated by the most senior executives who were financially benefiting themselves and the company by getting secret pay raises at the expense of state and federal taxpayers,” Carey Dunne, the office’s former general counsel, told state Supreme Court Justice Juan Merchan last year.
Weisselberg pleaded guilty in August, throwing a wrench in the Trump Organization’s legal strategy. “We jointly had a defense theory, in which Weisselberg maintained he was innocent of all the charges,” Trump Organization lawyer Susan Necheles told the judge in September. She said the company had been forced to restructure its defense.
As part of his plea deal, Weisselberg agreed to testify truthfully against the Trump Organization at trial. Nicholas Gravante Jr., a partner at Cadwalader, Wickersham & Taft LLP who represents Weisselberg, said that under the promised sentence, Weisselberg would serve a maximum of 100 days in jail.
Weisselberg has met with both prosecutors and the Trump Organization’s lawyers in advance of the trial “in order to assure that his testimony goes smoothly,” Gravante said.
The Trump Organization is expected to argue that the tax-fraud scheme to which Weisselberg admitted was an isolated practice of the finance chief and another employee, SVP/Controller Jeff McConney, and didn’t extend to the company itself.
A lawyer for McConney, who is named as an unindicted co-conspirator, didn’t respond to a request for comment.
Research contact: @WSJ