Lawyers for Donald Trump’s company pleaded not guilty to tax crime charges Thursday, along with the Trump Organization’s longtime finance chief, in the first criminal case arising from a two-year investigation into the former president’s company.
The company was charged Thursday in what a prosecutor called a “sweeping and audacious” tax fraud scheme that saw the company's CFO Allen Weisselberg allegedly receive more than $1.7 million in off-the-books compensation, including apartment rent, car payments and school tuition.
The charges include 15 felony counts, including conspiracy, grand larceny, falsifying business records and a scheme to defraud.
Prosecutors alleged a 15-year tax fraud scheme by which Weisselberg and the company cheated the state and city out of taxes by conspiring to pay senior executives off the books.
Prosecutor Carey Dunne described a 15-year scheme “orchestrated by the most senior executives,” including Weisselberg, that was “sweeping and audacious.”
Dunne said politics played no role in the decision to bring charges: "Politics has no role in the jury chamber and I can assure you it had no role here."
Weisselberg, 73, was photographed walking into a building that houses both the criminal courts and the Manhattan district attorney’s office around 6:20 a.m. Thursday. He was led into court in the afternoon with his hands cuffed behind his back.
Weisselberg's lawyers, Mary Mulligan and Bryan Skarlatos, said in a statement earlier before the arraignment that their client "intends to plead not guilty and he will fight these charges in court."
Trump Organization CFO Allen Weisselberg was arraigned a day after a grand jury returned an indictment charging him and Trump’s company with tax crimes. The lawyers for the Trump Organization pleaded not guilty to scheme to defraud and other charges, including conspiracy, grand larceny and tax fraud.
Trump himself was not charged at this tage of the investigation. The case against Weisselberg and the Trump Organization involves fringe benefits given to employees, like the use of apartments, cars and school tuition.
Weisselberg, 73, has worked for the Trump Organization for decades and has intimate knowledge of its business dealings that could be useful to prosecutors looking to dig deeper into the company. However, his lawyers say he will fight the charges, and there’s no indication he is willing to cooperate.
During a Fox News town hall appearance Wednesday in Texas, Trump mentioned the New York investigation as well as other probes involving him that he said were politically motivated.
“New York radical left prosecutors come after me," he said. "You got to always fight. You got to keep fighting.”
Earlier in the week, the Republican blasted the New York prosecutors as “rude, nasty and totally biased” and said his company’s actions were “standard practice throughout the U.S. business community, and in no way a crime.”
The planned charges were said to be linked to benefits the company gave to top executives, like the use of apartments, cars and school tuition, the people familiar with the matter told the Associated Press.
In a statement Thursday morning, a spokesperson for the Trump Organization said of the charges, "This is not justice; this is politics."
"Allen Weisselberg is a loving and devoted husband, father and grandfather who has worked at the Trump Organization for 48 years," the statement said. "He is now being used by the Manhattan district attorney as a pawn in a scorched earth attempt to harm the former president. 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."
Weisselberg’s lawyer, Mary Mulligan, declined to comment. The Manhattan district attorney’s office declined to comment.
Vance, who leaves office at the end of the year, has been conducting a wide-ranging investigation into a variety of matters involving Trump and the Trump Organization, such as hush-money payments paid to women on Trump’s behalf and truthfulness in property valuations and tax assessments, among other matters.
Vance fought a long battle to get Trump’s tax records and has been subpoenaing documents and interviewing company executives and other Trump insiders.
James assigned two lawyers from her office to work with Vance’s team on the criminal probe while continuing her own civil investigation.
Weisselberg, an intensely private man who lived for years in a modest home on Long Island, came under scrutiny of Vance’s investigators, in part, because of questions about his son’s use of a Trump apartment at little or no cost.
Barry Weisselberg, who managed a Trump-operated ice rink in Central Park, testified in a 2018 divorce deposition that the Trump Parc East apartment was a “corporate apartment, so we didn’t have rent.”
Barry’s ex-wife, Jen Weisselberg, has been cooperating with both inquiries and given investigators reams of tax records and other documents. In March, she told The New Yorker that some compensation for Trump Organization executives came in the form of apartments and other items and that “only a small part of your salary is reported.”
The Trump Organization is the business entity through which the former president manages his many entrepreneurial affairs, including his investments in office towers, hotels and golf courses, his many marketing deals and his television pursuits. Trump’s sons Donald Jr. and Eric have been in charge of the company’s day-to-day operations since he became president.
James Repetti, a tax lawyer and professor at Boston College Law School, said a company like the Trump Organization would generally have a responsibility to withhold taxes not just on salary, but other forms of compensation — like the use of an apartment or automobile.
Such perks wouldn’t be considered taxable income if they were required as a condition of employment, Repetti said, such as providing an apartment for the convenience of an employee who is required to be at the office or worksite at odd or frequent hours, or allowing the use of a car for business purposes.
Another prominent New York City real estate figure, the late Leona Helmsley, was convicted of tax fraud in a federal case that arose from her company paying to remodel her home without her reporting that as income.
The Trump Organization case involves possible violations of New York state tax laws.
“The IRS routinely looks for abuse of fringe benefits when auditing closely held businesses,” Repetti said. “The temptation for the business is that it claims a tax deduction for the expense, while the recipient does not report it in income.”
Michael Cohen, the former Trump lawyer who’s been cooperating with Vance’s investigation, wrote in his book “Disloyal,” that Trump and Weisselberg were “past masters at allocating expenses that related to non-business matters and finding a way to categorize them so they weren’t taxed.”
Weisselberg first started working for Trump’s real estate-developer father, Fred, after answering a newspaper ad for a staff accountant in 1973, working his way up.
Keeping a low profile — aside from a 2004 appearance as a guest judge on Trump’s reality TV show “The Apprentice” — Weisselberg was barely mentioned in news articles before Trump started running for president and questions arose about the boss’ finances and charity.
Cohen said Weisselberg was the one who decided how to secretly reimburse him for a $130,000 payment to porn actress Stormy Daniels. The finance chief made headlines again when it was revealed that his signature appeared on one of the reimbursement checks.
Barbara Res, who oversaw the construction of Manhattan’s Trump Tower, says she was surprised to learn about the seemingly large role Weisselberg has played in Trump’s business. She recalls him years ago just collecting rent, paying bills and doing Trump’s taxes.
“He was the chief accountant, but he wasn’t in the inner circle. He would come in with his head down, ‘Yes, Mr. Trump. No, Mr. Trump,’” Res said. “He’s the only person I knew who would call him Mr. Trump. Now he’s a big shot.”
The Associated Press contributed to this report.