Donald Trump’s family business and its longtime financial director, Allen Weisselberg, have been charged with criminal fraud by New York prosecutors for allegedly failing to pay taxes on a wide range of benefits, from school fees to free rent.
The charges were set forth in a 15-count indictment unlocked Thursday in a Manhattan court, marking a decisive turn in a nearly three-year investigation into Trump’s cases by Manhattan District Attorney Cyrus Vance, along with New York Attorney General Letitia James.
They allege that Weisselberg and other top Trump organization executives have agreed to hide some of their revenue from the government by making the company pay for their rent, tuition, car leases, and other “off-the-books” benefits. that have never been reported to the tax authorities.
According to prosecutors, Weisselberg earned $1.76 million in such “indirect compensation” over a 16-year period, including monthly rent for a Trump apartment on Riverside Boulevard in Manhattan, two Mercedes cars, furniture for his vacation home and school fees. for two grandchildren, among other expenses.
The alleged misreporting of income also allowed Weisselberg to claim $94,902 in federal tax refunds he did not owe, and $38,222 in state refunds.
The arrangement, she added, also allowed the Trump organization to avoid certain payroll taxes. Carey Dunne, a prosecutor at the Manhattan District Attorney’s Office, called it a “compelling and daring illegal payment scheme.”
James said the charges were “an important marker” in an ongoing criminal investigation into the Trump Organization.
Weisselberg, 73, who surrendered to authorities early Thursday morning, was led into a crowded courtroom in handcuffs hours later, where he pleaded not guilty during a brief arraignment. His lawyer said he would “fight these charges”.
Earlier in the day, the Trump Organization released a blistering statement accusing prosecutors of using Weisselberg — “a loving and devoted husband, father, and grandfather” — as “a pawn in a scorched-earth effort to harm the former president.”
Trump called the case a “political witch hunt by radical left Democrats”. Both Vance and James are Democrats.
The former president was not charged, nor were his three adult children who served as senior executives at the company: Donald Jr, Ivanka and Eric. But prosecutors have noted that their investigation continues.
After the arraignment, Trump’s attorney Ronald Fischetti called it “a sad day” for Manhattan’s DA. “After years of researching and collecting millions of documents and deploying the resources of dozens of prosecutors and outside advisers, is this all they have?” he said.
A Trump organization attorney, Alan Futerfas, told reporters after the hearing that cases like this were typically resolved in a civil, not criminal, way, saying it was unprecedented for a local prosecutor to “get behind a president or to start his business. ”.
“It’s politically driven,” he said.
In recent months, Weisselberg has become a focus of prosecutors, who hoped to convince the man who once described himself as Trump’s “eyes and ears” to support their investigation into a private company with hundreds of Byzantine partnerships.
The former president’s business was already struggling, with revenues plummeting at some of its hotels and golf courses as a result of the pandemic. Some partners, such as the Professional Golfers’ Association of America, have cut ties in protest at its role in the January 6 U.S. Capitol uprising.
The Trump organization has about $900 million in debt over the next four years, about a third of which is personally guaranteed by Trump.
Vance, who will step down at the end of this year, will have to hand over the case to a successor. His investigation was overshadowed by criticism for dropping a previous Trump Organization investigation in 2012, which arose over complaints from condominium buyers that Donald Jr and Ivanka had misled them. The parties later reached a settlement.
Vance launched the current investigation in 2018 following reports that former Trump fixer Michael Cohen had paid hush money to two women who claimed to have had extramarital affairs with the then-presidential candidate. Cohen later told Congress that he had agreed with Weisselberg that he would be reimbursed by the Trump Organization through monthly payments listed as legal fees.
The investigation expanded to consider possible bank and insurance fraud, according to court records. It is being investigated whether the Trump Organization has inflated the value of certain properties to secure bank loans and insurance and minimize them for tax purposes, according to people who have been informed.
The investigation was complicated by Trump’s refusal to hand over tax records. Vance was victorious in a legal battle that went to the U.S. Supreme Court and eventually took possession of the documents in February.