Allen Weisselberg, the chief financial officer of the Trump Organization, was formallyby New York prosecutors Thursday of participating in a years-long scheme that allowed him and other company executives to receive "off-the-books" compensation, benefits for which he allegedly neglected to pay taxes on while also raking in tens of thousands in federal and state refunds.
In a criminal indictment unsealed Thursday, prosecutors called Weisselberg "one of the largest individual beneficiaries" of the alleged scheme, and accused him of taking steps over the course of more than 15 years to conceal nearly $1.8 million in compensation from tax authorities.
In court Thursday, assistant district attorney Carey Dunne said, "To put it bluntly, this was a sweeping and audacious illegal payments scheme."
Weisselberg pleaded not guilty to the charges, which include tax fraud, grand larceny and conspiracy, and his lawyers, Mary Mulligan and Bryan Skarlatos, said he is "prepared to fight these charges in court."
Here's how prosecutors say Weisselberg hid his income from tax authorities:
Rent on a New York City apartment: $1.2 million
Prosecutors said Weisselberg failed to tell tax authorities that from 2005 to 2017, the Trump Corporation, the main corporate entity of the Trump Organization, paid for rent, utility bills and monthly garage expenses at his New York City apartment.
The apartment has been Weisselberg's primary residence since 2005, and is located 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.
Prosecutors said the company marked and deducted the rent-related payments in their general ledger as "rent expenses," and not employee compensation, and as a result, the payments were omitted from Weisselberg's personal tax return and he failed to report the indirect compensation to tax authorities.
Prosecutors alleged that over the course of more than a decade, Weisselberg used this method to conceal approximately $1,174,018 in indirect income from tax authorities.
School tuition for family members: $359,058
New York investigators allege in the indictment that over a five-year period beginning in 2012, private school tuition for two of Weisselberg's family members was paid by personal checks signed by Mr. Trump himself and later through the Donald J. Trump Revocable Trust.
One of Weisselberg's relatives began attending the Manhattan school in 2012, followed by the other in 2014.
While the tuition payments were treated as part of Weisselberg's annual compensation in the Trump Organization's internal records, they were omitted from his W-2 forms and not reported to tax authorities, according to the indictment. The indirect compensation also wasn't subjected to income tax withholding by the Trump Organization because it wasn't reported by the company, prosecutors said.
As a result of the off-the-books compensation, New York prosecutors estimate Weisselberg failed to pay taxes on roughly $359,058 he received during the five-year span.
Mercedes Benz leases for him and his wife: $196,245
From 2005 through 2017, prosecutors claim the Trump Organization paid the yearly leases on two Mercedes-Benzes used by Weisselberg and his wife.
While the lease payments were treated as part of his annual compensation in the Trump Organization's internal records, Weisselberg didn't include the payments on his personal tax returns or report them to tax authorities, according to the indictment.
As a result, prosecutors estimate he neglected to pay taxes on roughly $196,245 in compensation received in those 12 years.
Cash disbursements designated as "Holiday Entertainment": $29,400
Also part of the defendants' "scheme to defraud," the criminal indictment said, were unreported cash payments from the Trump Corporation that Weisselberg used "to pay personal holiday gratuities."
The Trump Corporation issued corporate checks to an employee at the Trump Organization. That employee cashed the checks and gave it to Weisselberg for his personal use, and the company "booked" it as "Holiday Entertainment," the indictment said.
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, ultimately evading paying taxes on approximately $29,400 between 2011 to 2017.
Payments for new beds, flat screen TVs and furniture for a Florida home: Unspecified
Prosecutors accused Weisselberg of asking the Trump Organization to pay for personal expenses for his homes and an apartment maintained by one of his children.
The 73-year-old requested new beds, flat-screen televisions, carpeting and furniture for his home in Florida, according to the indictment. When Weisselberg requested the Trump Organization cover the expenses, the company would issue checks and track the payments internally as part of his yearly pay, the filing stated.
But the payments for the purchases weren't included as compensation on Weisselberg's tax forms or reported to the proper authorities, prosecutors allege. The indictment doesn't specify how much in compensation Weisselberg didn't pay taxes on related to these personal expenses.
Falsely claiming he didn't live in New York City: $210,923 in unpaid taxes
Between 2005 and 2013, prosecutors said 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."
After nearly a decade, Weisselberg began paying New York City income taxes in 2013, prosecutors said, only after he sold his home in Wantagh, New York, a seaside town on Long Island.
Contributing to a pension plan by falsely claiming to be self-employed: $215,000
Prosecutors alleged Weisselberg made annual contributions to a Keogh plan, a tax-deferred pension plan available to the self-employed. Weisselberg, prosecutors said, was not self-employed.
Prosecutors said that the bonus structure for certain Trump Organization executives enabled Weisselberg to misrepresent his income and contribute to this plan.
While salaries and a portion of executives' year-end bonuses were reported to tax authorities as compensation on W-2 forms, prosecutors said 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.
Weisselberg used those payments to falsely report self-employment income, prosecutors said, and 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."
Tax refunds received: $133,124
By failing to report the indirect compensation he received from the Trump Organization to tax authorities, prosecutors estimate Weisselberg "falsely claimed and received" roughly $94,902 in federal tax refunds, which he deposited into his bank account.
The indictment lists refunds beginning with the 2009 tax year to the 2017 tax year.
Weisselberg also allegedly received $38,222 in state tax refunds.