NEW YORK (AP) — A top Donald Trump financier admitted on Thursday that he broke the law to help other Trump Organization leaders avoid taxes on company-paid apartments and other benefits, including preparing misleading tax returns and failing to report benefits to tax authorities.
Senior Vice President and Comptroller Jeffrey McConney testified at the company’s tax evasion trial that he filed false tax returns on behalf of a father-son executive duo whose Manhattan apartment rents were paid by the Trump Organization.
McConney, who was granted immunity to testify as a prosecution witness, also said that a few years before Trump became president, the company’s accountant raised concerns about how he was paying bonuses. vacation – a subject that consumed hours of trial testimony.
According to McConney, the accountant warned that the Trump Organization’s dubious and since discontinued practice of splitting bonuses between an executive’s salary and an independent contractor’s one-time payments from affiliates could jeopardize an individual’s legal license. of these executives: his best advocate.
The Trump Organization, the entity through which Trump owns hotels, golf courses and other assets, is accused of helping some top executives avoid income tax on additional compensation they received of their salaries.
The company, which could be fined more than $1 million if convicted, has denied any wrongdoing. His lawyers allege another executive — longtime CFO Allen Weisselberg — went rogue, concocted the scheme without the knowledge of Trump or the Trump family, and lied to the company about what he was doing. He did.
Trump Organization attorney Susan Necheles focused the jury’s attention on Weisselberg as she questioned McConney during cross-examination Thursday afternoon, showing emails indicating that McConney needed to get permission from Weisselberg to accomplish even simple tasks, like approving a $100 expense or writing a few sentences. to describe the company-run ice rinks in Central Park.
McConney said Weisselberg, his boss for years, had wide latitude over the company’s operations and even quoted him as saying Trump hired him to essentially run the company. Weisselberg pleaded guilty to taking $1.7 million in informal compensation and agreed to testify as a prosecution witness, possibly next week, in exchange for a five-month prison sentence.
The Trump Organization trial resumed Thursday after an eight-day delay while McConney and Judge Juan Manuel Merchan recovered from COVID-19. The trial was abruptly halted on November 1, just the second day of testimony, when McConney tested positive for the virus during a lunch break.
Merchan wore a blue surgical mask on the bench. About half of the jurors also wore masks. McConney, who coughed during his testimony last week, did not have the same on Thursday and said he felt “much better”.
McConney, who said he prepared taxes on the side for a handful of clients, told jurors he checked “no” on questions on the state tax form asking whether the chief operating officer Matthew Calamari Sr. maintained housing in New York when he knew he had it, allowing them both to avoid paying city payroll taxes
McConney said he did the same on Matthew Calamari Jr.’s tax forms and did not submit an amended tax return when he learned he was also living in a Big Apple apartment paid for by the company.
“Did you intentionally try to help people evade income tax?” asked prosecutor Joshua Steinglass.
“Evade is a very strong word,” McConney replied. “I tried to help them in any way I could, with some suggestions.”
The Trump Organization also paid for Weisselberg’s Manhattan apartment, Mercedes-Benz cars for him and his wife, furniture and utilities. Trump personally paid for his grandchildren’s tuition.
McConney, on his third day on the witness stand, said he deducted the cost of some executives’ benefits from their salaries, further reducing their tax liability. Trump endorsed the pay cuts. Prosecutors showed a 2012 memo noting such an arrangement for Calamari Sr. bearing the former president’s initial — a D resembling a treble clef — and the handwritten notation “OK.”
A message seeking comment was left for a lawyer for the Calamaris.
McConney, picking up where he left off before the COVID hiatus, said the Trump Organization changed some salary practices and financial arrangements after bringing in a Washington attorney to audit its post-election tax practices. of Trump in 2016.
Steinglass called the changes “cleansing”.
But McConney testified that the company had been warned years earlier by its own accountant, Donald Bender, that its decades-old way of handing out holiday bonuses – saving tax money by paying employees to full-time as self-employed, and perhaps writing the gain off as an expense — could jeopardize then-General Counsel Jason Greenblatt’s ability to practice law.
“It had something to do with, he might lose his legal license,” McConney said.
In 2015, after Bender spoke out, Greenblatt’s bonus was paid out entirely in the form of salary.
A message seeking comment was left for Greenblatt, who from 2017 to 2019 served as assistant to the president and Trump’s special representative for Middle East negotiations.
McConney tried to justify the split-pay arrangement by saying the company would split its bonuses based on work an executive does for that entity, like Trump’s Mar-a-Lago estate in Florida. But later he acknowledged that such work was the normal duties of a CFO like Weisselberg.
Asked why the company didn’t abandon the bonus system entirely after Bender said it could cost Greenblatt his career, McConney said: “He’s telling me to stop on one. and not to dwell on the other, it didn’t even occur to me. . … If Donald Bender had had a reason to tell us to stop, we would have stopped.
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