Trump Organization charged with tax fraud, CFO Allen Weisselberg also charged with grand larceny

  • Prosecutors allege the Trump Organization and Weisselberg had an “off the books” compensation plan.
  • The corporation, prosecutors alleged, “falsified” the executive’s compensation records.
  • Manhattan DA Cyrus Vance has been digging deep into the operations of the Trump family business.

Criminal charges unsealed Thursday against the Trump Organization and its chief financial officer, Allen Weisselberg, detailed an alleged tax evasion conspiracy spanning more than a decade, representing the most serious threat yet to the Trump family real estate enterprise long managed by Donald Trump.

The Trump Organization and Weisselberg were charged in a 15-count indictment alleging criminal tax fraud, conspiracy and falsifying business records.

Weisselberg, the CFO who was walked to the courtroom in handcuffs, was also charged with grand larceny in connection with failing to pay taxes on $1.7 million in fringe benefits from the company.

“Mr. Weisselberg intends to fight these charges in court,” attorney Bryan Skarlatos said in a written statement Thursday. Weisselberg, who pleaded not guilty, was released on his own recognizance.

Grand larceny

State prosecutors alleged that the Trump Organization and Weisselberg participated in an “off the books” compensation operation that funded luxury car leases, family members’ tuition payments and apartment rent starting in 2005 and running through this year.

According to court documents, Weisselberg regularly submitted requests for payment to the corporation to fund improvements for his homes in New York and Florida, along with those of his children. The expenses included new carpeting, flat screen televisions and furniture that was never claimed as compensation for tax purposes.

“The scheme was intended to allow certain employees to substantially understate their compensation from the Trump Organization so that they could and did pay federal, state and local taxes in amounts that were significantly less than the amounts that should have been paid,” according to court documents.

In all, Weisselberg avoided $556,385 in federal tax payments; $106,568 in state taxes; and $238,159 in local New York City taxes. At the same time, prosecutors allege that the longtime executive accepted $94,902 in federal tax refunds and $38,222 in state tax refunds that he was not entitled to receive.

According to court documents, the corporation maintained internal spreadsheets that tracked the direct and indirect compensation provided to Weisselberg over the years. While Weisselberg’s direct compensation for years was capped at $940,000, prosecutors assert that the Trump Organization – at Weisselberg’s direction – did not include the indirect payments as taxable income.

The corporation, prosecutors alleged, “falsified” the executive’s compensation records.

The grand larceny charge represents the most serious threat to Weisselberg, an offense which carries a maximum punishment of five to 15 years in prison. The Trump Organization, meanwhile, faces fines of hundreds of thousands of dollars if convicted as a criminal enterprise.

Perhaps more ominous was the message sent by prosecutors who signaled that the 25-page indictment did not mark the end of their investigation.

“Today is an important marker in the ongoing criminal investigation of the Trump Organization and its CFO, Allen Weisselberg,” New York Attorney General Letitia James said. “In the indictment, we allege, among other things, financial wrongdoing whereby the Trump Organization engaged in a scheme with Mr. Weisselberg to avoid paying taxes on certain compensation. This investigation will continue, and we will follow the facts and the law wherever they may lead.”

Trump, who was not charged Thursday, referred to the legal action in now-familiar flourish, calling it a “witch hunt by radical left Democrats.”

“It is dividing our country like never before,” Trump said in a statement.

The charges are part of a long-running inquiry headed by the Manhattan district attorney and New York’s attorney general into the operations of the Trump family real estate business.

The charges come just days after Trump Organization attorneys met with local prosecutors in a failed attempt to persuade them not to proceed with their case, Trump Organization lawyer Ron Fischetti said.

Fischetti told USA TODAY last week that prosecutors had not succeeded in securing the cooperation of Weisselberg, though the new charges are likely to place additional pressure on the former Trump executive to cooperate in the continuing investigation.

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