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Trump Organization and CFO Allen Weisselberg charged with 15 counts in alleged tax fraud scheme

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Trump Org and top executive charged with tax crimes
Trump Org and top executive charged with tax ... 02:29

Lawyers for the Trump Organization and one of its top executives pleaded not guilty to a slew of charges in a lower Manhattan courtroom on Thursday, as prosecutors alleged a 16-year scheme of brazen fraud and tax evasion by former President Donald Trump's namesake company.

A grand jury returned a 15-count indictment against the Trump Organization and Allen Weisselberg, its chief financial officer, late Wednesday evening. Prosecutors from the Manhattan District Attorney's Office detailed the alleged crimes at Thursday's initial court appearance and in the 25-page indictment filed in state court. 

The indictment alleged the company and Weisselberg orchestrated a scheme to funnel more than $1.7 million in untaxed "indirect employee compensation" to the longtime executive beginning in 2005. Prosecutors said the Trump Organization failed to properly report the payments to tax authorities.

"It was orchestrated by the most senior executives, who were financially benefiting themselves and the company, by getting secret pay raises at the expense of state and federal taxpayers," Carey Dunne, an assistant district attorney, told the judge.

New York Attorney General Letitia James said the indictment "is an important marker in the ongoing criminal investigation of the Trump Organization and its CFO."

"This investigation will continue, and we will follow the facts and the law wherever they may lead," James said in a statement.

Weisselberg and two corporate entities under the Trump Organization were named as co-defendants in the indictment. Weisselberg and attorneys representing the company entered pleas of not guilty on all counts. Mr. Trump himself has not been charged with a crime, and said the decision to bring charges was part of a politically motivated "witch hunt."

Weisselberg surrendered to authorities early Thursday morning and was led into the courtroom in handcuffs at the arraignment in the afternoon. He was released on his own recognizance after giving up his passport, and is next due in court on September 20.

 

Read the full indictment against the Trump Organization and Weisselberg

The full 25-page indictment filed by New York prosecutors can be found here:

By Stefan Becket
 

Scheme allowed Weisselberg to make pension contributions, prosecutors say

In detailing how Trump Organization executives received portions of their end-of-year bonuses through checks from various corporate entities, which were reported to tax authorities as non-employee compensation, prosecutors allege this allowed Weisselberg to make annual contributions to a Keogh plan, a tax-deferred pension plan available to the self-employed.

Weisselberg, however, was not self-employed. Still, he was able to "falsely" report self-employment income because he purportedly received "substantial non-employee compensation" from Trump-owned Mar-a-Lago and Wollman Rink, the indictment states.

According to the filing, Weisselberg contributed more than $215,000 to the pension plan for the 2012 through 2016 tax years.

Over the course of the tax fraud scheme, prosecutors said, he built up the Keogh plan "worth many hundreds of thousands of dollars," even though he knew excluding contributions to the pension plan from his taxable income was "improper."

By Melissa Quinn
 

Mercedes-Benz leases and flat-screen TVs: Prosecutors say Weisselberg hid hundreds of thousands of dollars in compensation

In addition to payments for rent and private school tuition, prosecutors say Weisselberg failed to report payments the Trump Organization made for a slew of other expenses — including leases for two Mercedes-Benz automobiles, cash disbursements the company designated as "Holiday Entertainment" and "ad hoc" personal expenses for his homes and one of his children's apartments.

Prosecutors said the Trump Corporation paid to lease two Mercedes-Benz automobiles that Weisselberg and his wife used as their personal cars from at least 2005 to 2017, but Weisselberg failed to report the lease payments as taxable income to tax authorities. As a result, prosecutors said, he avoided paying taxes on approximately $196,245 in compensation.

In some years, the Trump Corporation noted in their own internal records that the car lease payments were part of Weisselberg's income, prosecutors said, but the company did not withhold income taxes in connection with the payments, and Weisselberg himself did not report the payments to any tax authorities.

Also part of the defendants' "scheme to defraud," the criminal indictment said, were cash payments that the Trump Organization gave Weisselberg "to pay personal holiday gratuities."

The company distributed the cash and "booked" it as "Holiday Entertainment," the indictment said, but Weisselberg failed to report the payments to tax authorities, ultimately evading paying taxes on approximately $29,400 between 2011 to 2017.

Weisselberg also "occasionally submitted requests," the indictment said, for the Trump Corporation to pay for personal expenses at his homes and at an apartment maintained by one of his children. The requests allegedly included new beds, flat-screen televisions, furniture for his Florida home and the installation of carpeting.

In the cases of both the unreported cash and the personal expenses, the indictment alleges that the Trump Corporation tracked the payments internally as part of Weisselberg's employee compensation, but didn't withhold taxes, and Weisselberg himself failed to report the compensation as income.

By Cassidy McDonald
 

Trump Organization claims charges are "all about politics"

The Trump Organization accused Manhattan District Attorney Cyrus Vance Jr. of bringing the charges to damage the former president politically. 

"After years of investigating, dozens of subpoenas, millions of documents and millions of dollars of taxpayer money, the Manhattan District Attorney's Office has decided to charge select Trump entities with providing a car, an apartment and other employee benefits to one of its long-time executives," the company said in a statement. "Make no mistake – this is not about the law; this is all about politics."

The statement said the investigation is "an inappropriate use of a local prosecutor's vast and unchecked power to target a political opponent."

By Stefan Becket
 

Indictment: Weisselberg didn't pay taxes on $359,058 in private school tuition

Prosecutors go on to detail how the scheme outlined in the indictment extended to private school tuition for two of Weisselberg's family members and estimate he neglected to pay taxes on roughly $359,058 in compensation he received during a five-year span.

From 2012 to 2017, Trump Organization employees, including Weisselberg, arranged tuition expenses to be paid for his family members at a school in Manhattan. The tuition was paid by personal checks first from the account of Mr. Trump, who signed them, and later from the account of the Donald J. Trump Revocable Trust.

"The payment of tuition expenses for Weisselberg's family members constituted employee compensation and taxable income to Allen Weisselberg and was treated as part of Weisselberg's annual compensation in internal records maintained by the Trump Corporation," according to the indictment.

However, this indirect compensation — in the form of the tuition — was excluded from Weisselberg's W-2 forms and not reported to tax authorities, so no income taxes were withheld, the indictment states.

Prosecutors claim Weisselberg "intentionally caused" the tuition payments to be left off his personal tax returns, even though he was aware they represented taxable income and were treated as compensation by his employer in internal records.

According to the indictment, Weisselberg told an accounting department staff member to remove the notations "Per Allen Weisselberg" from entries in "Donald J. Trump's Detail General Ledger" relating to the tuition payments paid on his behalf to the private school.

By Melissa Quinn
 

The 15 counts against the Trump Organization and Weisselberg

The indictment unsealed Thursday details 15 counts against the company and Weisselberg, several of which only apply to the executive:

  1. Scheme to defraud in the first degree
  2. Conspiracy in the fourth degree
  3. Grand larceny in the second degree (Weisselberg only)
  4. Criminal tax fraud in the third degree
  5. Criminal tax fraud in the third degree
  6. Criminal tax fraud in the third degree
  7. Criminal tax fraud in the fourth degree
  8. Offering a false instrument for filing in the first degree (Weisselberg only)
  9. Offering a false instrument for filing in the first degree (Weisselberg only)
  10. Offering a false instrument for filing in the first degree (Weisselberg only)
  11. Offering a false instrument for filing in the first degree (Weisselberg only)
  12. Falsifying business records in the first degree
  13. Falsifying business records in the first degree
  14. Falsifying business records in the first degree
  15. Falsifying business records in the first degree
By Clare Hymes
 

Prosecutors say New York City apartment was at the center of tax scheme

In their criminal indictment, prosecutors accused Weisselberg of undertaking a complex scheme to conceal nearly $1.8 million in compensation from tax authorities. Central to the scheme, they said, was a New York City apartment on the west side of Manhattan in a building complex previously known as "Trump Place," though the Trump Corporation did not own the building, prosecutors said. The Trump Corporation is the main corporate entity of the Trump Organization.

From 2005 to 2017, prosecutors said, the Trump Corporation paid for rent, utility bills and monthly garage expenses at this New York City apartment — which has been Weisselberg's primary residence since 2005 — but concealed the payments from tax authorities, allowing Weisselberg to avoid paying taxes on approximately $1,174,018 in income. 

Prosecutors said the company marked and deducted the payments in their general ledger as "rent expenses," rather than employee compensation. As a result, the payments were omitted from Weisselberg's personal tax returns, and Weisselberg did not report the indirect compensation to tax authorities, prosecutors said.

Prosecutors also said that between 2005 and 2013, Weisselberg avoided paying an additional $210,923 in New York City income taxes by falsely claiming he was not a New York City resident. 

"Weisselberg spent most of his days each year in New York City, working in the Trump Organization offices at Trump Tower," the indictment said. "He was a New York City resident, and knew that he was a New York City resident, but falsely claimed to his tax preparer and to the tax authorities that he was not a New York City resident."

By Cassidy McDonald
 

Trump claims New York prosecutors mounting "political witch hunt"

Mr. Trump claimed the continued investigations into his business dealings are "dividing our country like never before" after prosecutors unsealed an indictment against his namesake company and its longtime CFO, Weisselberg.

"The political witch hunt by the radical left Democrats, with New York now taking over the assignment, continues," he said in a statement.

By Melissa Quinn
 

Indictment alleges Trump Organization misreported employee compensation

Prosecutors allege the Trump Organization and Weisselberg "misreported portions" of compensation paid to some executives, in addition to its longtime CFO.

"Specifically, it was a practice of the Trump Organization to compensate certain executives by paying them a yearly salary and discretionary end-of-year bonus," according to the filing with the New York court.

While salaries and a portion of executives' year-end bonuses were reported to tax authorities as compensation on W-2 forms, a "substantial portion" of year-end bonuses for Weisselberg and other executives were paid through checks drawn from Trump Organization entities, including the Wollman Rink Operations, Trump International Golf Club and Mar-a-Lago Club, among others, prosecutors said.

These bonus checks were "routinely" reported to tax authorities as non-employee compensation, and the practice was "improper," according to the indictment.

"By reporting portions of employees' bonus payments as non-employee compensation, the defendants made it possible for those employees to report the payments as self-employment income," prosecutors allege.

By Melissa Quinn
 

Trump lawyer Ronald Fischetti on charges: "This is all they have?"

Ronald Fischetti, a lawyer for Mr. Trump, said in response to the unsealed indictment from New York prosecutors that it is a "sad day" for the Manhattan District Attorney's Office.

"After years of investigation and the collection of millions of documents and devoting the resources of dozens of prosecutors and outside consultants, this is all they have?" he said in a statement. "In my 50 years of practice, I have never seen this office bring a case like this and, quite frankly, I am astonished."

Fischetti claimed the district attorney is proceeding with its case because it involves the former president's company.

"As far as we are concerned, this case is over," he continued.

By Melissa Quinn
 

Prosecutors say scheme extended to Weisselberg's family member and 2 other employees

The indictment alleges that over a period of 16 years, from the end of March 2005 to the end of June 2021, the Trump Organization and Weisselberg "engaged in a scheme constituting a systematic ongoing course of conduct with intent to defraud."

In addition to naming the Trump Organization and Weisselberg, the indictment also names the Trump Payroll Corporation, a Trump Organization entity.

"The scheme was intended to allow certain employees to 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 they should have paid," according to the indictment.

Prosecutors allege that under the scheme, the Trump Organization entities failed to withhold income taxes on wages, salaries, bonuses and other forms of compensation to certain employees, though the employees beyond Weisselberg are not named.

The tax fraud scheme, according to the indictment, also "allowed the Trump Organization to evade the payment of payroll taxes" it was required to pay.

While the indictment focuses on Weisselberg and the benefits he received, prosecutors allege the tax fraud scheme extended to other executives and employees, who received rent-free lodging and other perks. 

One person, a member of Weisselberg's family, lived in an apartment owned by the Trump Organization from 2005 to 2012 and paid roughly $1,000 in monthly rent. The unnamed family member moved to another apartment on East 61st Street in Manhattan in 2018, with no reported rent, according to the filing.

Two other employees received "substantial amounts of compensation" through lodging in New York City and the payment of car leases. 

Prosecutors allege the Trump Organization and Weisselberg failed to report the income and withhold taxes.

By Melissa Quinn
 

Weisselberg one of the "largest individual beneficiaries" of alleged tax scheme, indictment says

In the indictment unsealed Thursday, prosecutors called Weisselberg "one of the largest individual beneficiaries" of the alleged scheme to allow certain employees to understate their compensation from the Trump Organization in order to pay less in federal, state and local taxes. 

Prosecutors said the company and Weisselberg arranged for him to receive $1.76 million in "indirect employee compensation" from the Trump Organization, and to do so in ways that enabled them to avoid reporting it to tax authorities.

The criminal indictment alleges Weisselberg evaded approximately $556,385 in federal taxes, $106,568 in state taxes and $238,159 in New York City taxes. It also said Weisselberg falsely claimed and received approximately $94,902 in federal tax refunds and approximately $38,222 in state tax refunds to which he was not entitled.

Weisselberg has worked for the Trump family since 1973, prosecutors said. During their investigation, prosecutors had scrutinized Weisselberg's finances and had subpoenaed documents related to the finances behind at least half a dozen Trump properties.

By Cassidy McDonald
 

Trump Organization CFO Allen Weisselberg pleads not guilty

Weisselberg entered a plea of not guilty to criminal charges filed against him by New York prosecutors. He was escorted into the courtroom in New York Superior Court with his hands cuffed behind his back and wearing a white face mask.

Both Manhattan District Attorney Cyrus Vance and New York Attorney General Letitia James, whose office has also been looking into the Trump Organization, were in attendance at the arraignment. Weisselberg is a focus of the attorney general's probe.

By Melissa Quinn
 

Arraignment set for 2:15 p.m. in Manhattan courtroom

A spokesman for the Manhattan District Attorney's Office says an arraignment of "significant interest" is scheduled for 2:15 p.m. ET in Manhattan Criminal Court. The spokesman said copies of "any documents that were filed by our office during the appearance" will be released at the conclusion of the proceedings. 

Prosecutors don't plan to hold a press conference following the arraignment, the spokesman said, since "the case relates to an active, ongoing investigation."

By Stefan Becket
 

Weisselberg to plead not guilty, lawyer says

Weisselberg plans to plead not guilty to charges against him and "he will fight these charges in court," his attorney, Mary Mulligan, said in a statement.

By Nicole Sganga
 

Trump Organization on expected prosecution: "This is politics"

A spokesperson for the Trump Organization defended Weisselberg in a statement after he surrendered to authorities, calling him a "loving and devoted husband, father and grandfather" whose tenure with the company has spanned more than four decades.

"He is now being used by the Manhattan District Attorney as a pawn in a scorched earth attempt to harm the former president," the spokesperson said. "The district attorney is bringing a criminal prosecution  involving employee benefits that neither the IRS nor any other district attorney would ever think of bringing.  This is not justice; this is politics." 

By Nicole Sganga
 

Weisselberg surrenders to authorities

Allen Weisselberg arrival at court
Trump Organization chief financial officer Allen Weisselberg arrives at Manhattan Criminal Court on July 1, 2021. WCBS-TV

Allen Weisselberg, the longtime Trump Organization executive, surrendered to authorities in lower Manhattan around 6:15 a.m.

Weisselberg was seen on camera walking into the building that houses the Manhattan Criminal Court and district attorney's office. A spokesman for the Manhattan District Attorney's Office did not immediately return requests for comment.

A grand jury returned an indictment against the Trump Organization on Wednesday for tax-related crimes, CBS News reported. Weisselberg, too, is expected to face charges from Manhattan prosecutors.

The charges are expected to be unsealed later Thursday, and Weisselberg is expected to be arraigned Thursday afternoon.

By Melissa Quinn
 

Trump Organization indicted on tax-related charges

The Trump Organization was indicted by a grand jury in Manhattan for alleged tax-related crimes on Wednesday, sources familiar with the matter told CBS News.

The charges remained under seal as of Thursday morning. Attorneys for the Trump Organization are expected to appear in court for arraignment on the charges.

Ronald Fischetti, a lawyer representing Mr. Trump, told CBS News on Tuesday that he did not foresee charges against the former president himself. During a virtual meeting with prosecutors last week, Fischetti said he asked Manhattan District Attorney Cyrus Vance Jr. for details on the charges that were under consideration.

"I asked specifically, 'Are any of these charges related to Donald Trump?' And the answer was no," Fischetti told CBS News on Tuesday.

By Melissa Quinn
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