Trump Organization tax evasion lawsuit: what you need to know

JThe Trump Organization’s tax evasion criminal trial begins Monday, and the outcome could have more impact than the coffers of former President Donald Trump’s family business.

The Manhattan District Attorney’s Office has charged two of the Trump Organization’s business entities, the Trump Corporation and the Trump Payroll Corp., with operating a 15-year scheme to defraud tax authorities. Prosecutors allege the scheme allowed some executives to receive much of their compensation through disguised means, allowing them to underreport their earnings. The Trump Organization has pleaded not guilty and denied any wrongdoing. If found guilty, the companies could face heavy financial penalties.

Prosecutors also accused the Trump Organization’s longtime chief financial officer, Allen Weisselberg, 75, of masterminding and operating the alleged scheme. On August 18, Weisselberg pleaded guilty to 15 counts, including conspiracy with the Trump Organization. Weisselberg was sentenced to five months in prison and five years probation, subject to his truthful testimony at the trial which begins Monday in New York. (He must also pay nearly $2 million in taxes, penalties and interest.) In an August statement, Manhattan DA Alvin Bragg said Weisselberg’s plea implicated the Trump Organization in “a wide range of activities criminals”.

Neither Donald Trump nor any of his children have been charged by the Manhattan District Attorney’s Office with wrongdoing. But the lawsuit promises to reveal new information about the inner workings of the company that dominated much of Trump’s pre-presidential life. The Trump Organization was built on Trump’s brand of 1980s bravado, contributed to Trump’s fame, and was led by Trump himself for decades until he entered the White House in 2017. Trump then transferred control of the company to a trust led by Weisselberg and his sons Donald Trump Jr. and Eric Trump. (Weisselberg resigned after his indictment last summer.) The charges against the Trump Organization are the result of a years-long investigation by the Manhattan District Attorney’s Office into Trump’s business dealings — an investigation that Bragg agreed to continue in April. Court monitors will listen to testimony during the trial for signs that other charges may emerge.

To win, prosecutors must convince a jury that the Trump Organization not only knew about the actions of Weisselberg and his alleged co-conspirators, but also that those actions were done for the benefit of the company. If the defense can paint a picture of a few rogue executives lying about their taxes, the companies could avoid conviction. The outcome will likely depend on Weisselberg’s testimony.

Even if the Trump Organization is doomed, the situation could be better for the Trump family than seeing the companies plead guilty as Weisselberg did, said a person familiar with the inner workings of the Trump Organization who asked for the anonymity to speak frankly. “If found guilty, Trump would rather have it by a jury, in a trial that he could blame as biased and flawed,” the individual states, “instead of allowing a company representative to appear. appear in court and admit guilt”.

The Manhattan DA investigation is just one part of a web of legal troubles entangling the former president, who also faces federal investigations for allegedly removing potentially classified White House documents and trying to overturn the 2020 election results. (Trump has denied any wrongdoing.) In September, New York Attorney General Letitia James also filed a $250 million lawsuit against Trump, his three eldest children, the Trump Organization and senior company management, including Weisselberg, alleging they were involved in efforts to wrongfully inflate Trump’s assets by billions of dollars in order to mislead lenders and secure loans more advantageous. James says his office is cooperating with the Manhattan District Attorney’s Office and has also referred their findings to the US Attorney’s Office for the Southern District of New York and the Internal Revenue Service for criminal investigation.

Read more: The main ongoing investigations into Donald Trump

“I imagine the new attorney general’s office will be paying close attention to finding any overlap between their civil case against Donald Trump,” says Barbara McQuade, a professor at the University of Michigan Law School and a former U.S. attorney. of the Eastern District of Michigan. “The evidence used in this trial would be of interest to the [Attorney General’s] Desk.”

The Trump Organization, the Manhattan District Attorney’s Office and Donald Trump did not respond to TIME’s requests for comment.

Jury selection begins October 24. Here’s what to know about the Trump Organization’s tax evasion lawsuit.

What are the charges against the Trump Organization?

In July 2021, a grand jury indicted the Trump Organization and Allen Weisselberg on 15 counts, including conspiracy, robbery, and tax evasion. Between March 2005 and June 2021, according to the indictment, the Trump Organization, Weisselberg and “others” devised and operated a scheme to defraud federal, New York State and city authorities. from New York.

Prosecutors say the purpose of the scheme was to compensate Trump Organization leaders in a way that was ‘official’, meaning large swaths of their income were either unreported or misreported to authorities. tax. This would have allowed some executives to pay significantly less federal, state and local taxes than they should have.

Prosecutors claimed Weisselberg, who has worked for the Trump family since 1973, was a top beneficiary of the program, which saw him receive about $1.76 million in indirect compensation from employees of the Trump Organization. . This included paying his rent for an apartment on Manhattan’s Riverside Boulevard, paying for his utilities and garage privileges, paying for several Mercedes Benz cars, paying for college tuition for his grandchildren, and the supply of undeclared cash and furniture for his New York and Florida homes. . Weisselberg eventually pleaded guilty to 15 counts in August.

“Entering a guilty plea was one of the most difficult decisions of his life, even with the promised sentence that could require up to 100 days in jail,” said Weisselberg’s attorney, Nicholas Gravante Jr. , co-head of global litigation at Cadwalader, Wickersham & Taft, said in a statement in September. “But the Manhattan jury pool that would have tried him and current policy [climate] in New York has campaigned against him rolling the dice at trial and facing up to 15 years in prison… Mr. Weisselberg is comfortable with his decision to plead guilty and happy to have this case behind him.

Weisselberg is not cooperating with prosecutors in the ongoing broader investigation into Trump’s business dealings. But Bragg said Weisselberg’s plea requires him to provide “invaluable” testimony against the business entities in exchange for his lighter sentence. If he does not testify honestly, he faces up to 15 years in prison.

In a written statement shared with TIME, Gravante said Weisselberg chose to meet with both the prosecution and defense before trial “to ensure his testimony goes smoothly.”

“In doing so, Mr. Weisselberg gives both parties the opportunity to verify in advance what truthful testimony they can obtain from him that is helpful to their respective positions,” the statement continued.

As the company’s longtime chief financial officer, Weisselberg is in a position to testify about whether Trump Organization officials had criminal intent behind their alleged actions, rather than making mistakes, McQuade said. Such testimony could implicate other corporate officers. When Weisselberg pleaded guilty on Aug. 18, he named longtime Trump Organization Comptroller Jeff McConney as the leader he conspired with. But McConney already enjoys immunity in the inquest because he was subpoenaed and agreed to testify before the inquest’s grand jury. He is also expected to testify at trial. (His attorney did not respond to TIME’s request for comment.)

How is Donald Trump involved?

Donald Trump has not been charged with any crime or charged with any wrongdoing by the Manhattan District Attorney’s Office. He was president and owner of the Trump Organization for decades of the alleged scheme.

Donald Trump took over the Trump Organization from his father Fred Trump in the early 1970s and oversaw its decades of growth. The Trump Organization is currently made up of approximately 500 business entities that own more than nine hotels, 12 golf courses, and numerous commercial and residential buildings around the world.

Read more: How Trump Survived Decades of Legal Trouble: Denying, Diverting, Delaying and Putting Nothing in Writing

The trial, which begins Monday, is narrowly focused on alleged tax evasion by executives of the Trump Organization. It is highly unlikely that anyone with the last name Trump will be subpoenaed to testify. They can rarely be mentioned at all. But even if they are not explicitly named, revelations of the company’s potentially illegal internal business practices could harm the family financially. “A conviction could result in a hefty fine and damage the reputation of the Trump Organization,” McQuade said. “It could make it harder for Trump or his company to secure trade deals or loans.”

Prosecutors leading other investigations into Trump’s business dealings, such as James’s lawsuit alleging the Trump Organization engaged in business fraud, will likely also be watching closely. James and the Manhattan District Attorney’s Office cooperated on their parallel investigations. Since James also referred his findings to the U.S. Attorney’s Office for the Southern District of New York and the Internal Revenue Service for criminal investigation, the Trump Organization could face further charges in the future.

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