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‘Greed and cheating’: Prosecutor outlines tax fraud allegations against Trump Organization

An attorney for the Trump company told jurors former CFO Allen Weisselberg was the bad guy, not the Trump Organization. The former president and his three oldest children are listed as possible witnesses.
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Opening arguments began Monday in the high-profile criminal tax fraud case against the Trump Organization, the former president's family-run company that helped make him a household name.

“This case is about greed and cheating,” prosecutor Susan Hoffinger told jurors in her opening statement about what she alleged was a "clever scheme."

Two corporations that are a part of the company, Trump Corp. and Trump Payroll Corp., "paid their already highly paid executives even more by cheating on their taxes," Hoffinger said.

Donald Trump is listed as a possible witness in the trial in New York, where prosecutors will argue that the company he ran for decades engaged in a 15-year scheme to compensate top executives “off the books” to help them — and the company — avoid paying taxes.

Trump, who hasn’t been charged with any wrongdoing, has blasted the investigation as a politically motivated “witch hunt.”

Presiding over the case, acting New York Supreme Court Justice Juan Merchan told potential jurors last week that in addition to the former president, his three oldest children — Donald Trump Jr., Ivanka Trump and Eric Trump — could be called as witnesses. All three have held key positions at the company.

Supreme Court is the name of New York’s highest trial court.

The star witness for prosecutors will be Allen Weisselberg, the company’s longtime chief financial officer, who is on paid leave from the Trump Organization. He was indicted alongside the Trump Organization last year after years of investigation into the company’s financial practices by the Manhattan district attorney’s office. Weisselberg, 75, pleaded guilty to 15 felony charges in August.

No one else has been charged.

Referring to Weisselberg, Hoffinger told the jury that "for 35 years he reported directly to Donald Trump." He had "signatory authority for bank accounts," she said.

As part of his plea deal, Weisselberg agreed to pay nearly $2 million in taxes, interest and penalties, in addition to testifying “truthfully at the upcoming trial of the Trump Organization.” If he does not do so, prosecutors said, he could face a sentence closer to what he originally faced had he been convicted at trial — five to 15 years in prison.

Weisselberg is expected to take the stand next week.

Susan Necheles, an attorney for the Trump company, told jurors Weisselberg was the bad guy in the case, not the Trump Organization.

The “evidence will show it was all about Allen Weisselberg,” Necheles said.

Weisselberg “had a beautiful life at a prestigious company,” which came crashing down when he was arrested, Necheles said.  

“Allen Weisselberg had everything a man could want, and he realized he could lose all of it, so he made a deal. He would plead guilty and cooperate” against the Trump companies, Necheles said. “The only way to get this great deal, he must testify. Think about the extreme pressure he is under,” she said, telling jurors Weisselberg was the one who benefited from the scheme — not the Trump Organization.

Necheles also asked that jurors "not consider this case to be a referendum on President Trump."

"The evidence will be clear that Donald Trump did not know that Allen Weisselberg was cheating on his personal taxes," she said.

Trump Payroll Corp. lawyer Michael van der Veen also pointed the finger at Weisselberg, saying "greed made him cheat on his taxes and betray a trust of over 50 years" that was first placed in him by Trump's father, Fred Trump.

"He was trusted to protect the company and given an enormous amount of independent autonomy to conduct his job," he said. 

Van der Veen also said Weisselberg has been forgiven by the company, comparing his situation to that of the biblical story of the prodigal son. He told jurors that Weisselberg, 75, is no longer the CFO but is still on the company's payroll.

The first witness called by prosecutors was the Trump Organization's controller, Jeffrey McConney, who was asked about the company's business and accounting practices.

The judge told potential jurors last week that the case involves allegations that the company “devised and operated a long-term scheme to fail to report income on tax forms.”

The indictment alleges that the company committed conspiracy, scheming to defraud, criminal tax fraud, falsification of business records and other felonies.

The indictment says 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.”

The alleged scheme also allowed the company “to evade the payment of payroll taxes that the Trump Organization was required to pay in connection with employee compensation,” the indictment said.

According to prosecutors’ court filings, the biggest beneficiary was Weisselberg, who received $1.76 million in “indirect employee compensation” from the company, including a rent-free apartment, expensive cars, private school tuition for his grandchildren and new furniture.

Jury selection wrapped up Friday. Four women and eight men make up the panel, with five alternates for what’s expected to be a monthlong trial.

The Trump Organization faces up to about $1.6 million in penalties if it is convicted on all counts. A conviction could also hamper the company’s ability to obtain future financing, experts have said.

The company faces other legal problems. Jury selection starts Monday in the Bronx — about 10 miles north of Merchan’s Manhattan courtroom — in a civil case brought against Trump, the Trump Organization and his 2016 campaign by a group of protesters who say Trump’s security guards roughed them up outside Trump Tower when he was a candidate.

They're seeking unspecified money damages in the trial, which will feature videotaped testimony Trump gave in the case last year. Trump has denied having known about his guards' actions ahead of time, but he testified that he believed they acted appropriately, according to parts of his testimony that were included in a court filing in April.

The New York attorney general’s office also sued the company, Trump and his oldest children last month, alleging they had overstated the company’s financial assets by billions of dollars.

The suit, which Trump has also dismissed as a politically motivated "witch hunt," seeks to impose about $250 million in penalties and to permanently bar Trump and his three oldest children from serving as officers of any New York-based companies.