Trump was not indicted, however, prosecutors pointed out that he had signed certain of the checks for compensation.
This first criminal case has been released by New York's two-year investigation of the business dealings of the former president.
The indictment states that the Trump Organization and its Chief Financial Officer Allen Weisselberg conspired to cheat the state and the city of taxes from 2005 to this year by conspiring with senior executives to get off the books through lucrative fringe benefits and other means.
Weisselberg was the only one accused of defrauding the federal, state and city of more than $1,000,000 in unpaid taxes and tax returns to which he wasn't entitled.
Grand larceny is the most serious charge against Weisselberg and can lead to five to fifteen years imprisonment. Tax fraud charges against Weisselberg are punishable with a fine equal to twice the amount of unpaid taxes or $250,000 depending on the severity.
Weisselberg, 73 years old, has been in close contact with the Trump Organization's financial transactions for nearly five decades. Prosecutors could use the charges against him to force him to cooperate in the investigation and reveal what he knows.
Weisselberg as well as the lawyers for Trump Organization pleaded guilty. Weisselberg was released on bail and ordered to surrender his passport. The courthouse was left empty handed.
Trump released a statement calling the case a "political Witch Hunt of the Radical Left Democrats." Weisselberg's lawyers stated that he would "fight these charges."
Manhattan District Attorney Cyrus Vance Jr., and New York Attorney General Letitia Jam (both Democrats) are leading the case.
Vance, who will be leaving office at the close of the year has been conducting an investigation into a variety of matters concerning Trump and the Trump Organization. These include hush-money payments made to women for Trump's benefit and whether Trump Organization falsified its property values to get loans or lower its tax bills.
This news comes as Trump is seriously considering a comeback bid for the presidency in 2024. Trump has increased his public appearances and held his first rallies since leaving White House.
Carey Dunne was the top prosecutor in District Attorney's Office. He announced the grand jury indictment.
Trump's former president runs his numerous ventures through the Trump Organization. This includes his investments in office towers and hotels, as well as his marketing deals and TV pursuits. Since Trump became president, his sons Eric and Donald Jr. have managed the day-today operations.
The criminal case could also expose the Trump Organizations for fines. This is a significant hit to the company, which already has lost business due to the coronavirus, backlash after the attack on the Capitol, and other factors.
Daniel Horwitz, a white collar defense attorney, stated that companies indicted, regardless of whether they are public or private, will face serious collateral consequences. They are not interested in doing business with companies in the financial service industry. Their access to capital is restricted or blocked, and they are unable to place liquid assets with banks or brokerages.
Weisselberg was under investigation partly because of questions regarding his son's use, at no cost or minimal cost, of a Trump apartment.
Barry Weisselberg, Barry's son and manager of a Trump-operated Central Park ice rink, paid no rent in 2018 while he lived in a Trump-owned apartment. He was also charged only $1,000 per month -- well below the typical Manhattan price -- while residing in a Trump apartment between 2005 and 2012, according to the indictment.
Prosecutors said that Allen Weisselberg, an extremely private man, maintained residency in Long Island's modest home for many years, even though he was living in a Manhattan apartment paid by his company.
Weisselberg hid his identity as a New York City resident. He avoided paying $900,000. In federal, state, and city income taxes. Instead, prosecutors claimed that Weisselberg received about $133,000 in refunds, to which he wasn't entitled.
According to the indictment Weisselberg paid rent for his Manhattan apartment using company checks. He also directed the company's payment of his utility bills, and parking. With checks signed by Trump, the company paid for Weisselberg’s grandchildren’s private school tuition, and also for Mercedes cars owned by Weisselberg and his spouse. Weisselberg was also given cash to give as tips around Christmas.
These perks were included in Weisselberg’s employee compensation, but they were not reported on W-2 forms. Prosecutors also stated that the company didn’t withhold taxes on their values.
At Weisselberg’s request, Trump’s company issued checks to pay personal expenses and to upgrade his home and apartment. These included new beds, flat-screen TVs and carpeting, as well as furniture and other items.
Barry Weisselberg's ex wife has cooperated with investigators, and provided them with reams tax records and other documents.
The indictment stated that two other Trump executives, who were not named, also received significant under-the-table payments, including lodging and payment of automobile leases.
Weisselberg is known for being a hardworking, deeply committed worker who has been devoted to Trump's interests. There is no indication that Weisselberg, who was described by Trump's daughter Ivanka to be a "fiercely loyal deputy", is about turn against the former president.
Trump claimed that his company's actions were a standard business practice and not a crime. Trump Organization claimed that Weisselberg was being used by the district attorney's office as a "pawn in a scorched earth attempt to harm former president". It stated that the DA's Office and IRS had never brought criminal charges against a company for employee benefits.
Vance waged a long fight for Trump's tax records. He has been subpoenaing documents, interviewing Trump executives, and conducting interviews.
James Repetti, a Boston College Law School professor and tax lawyer, stated that a company such as the Trump Organization would typically have to withhold taxes on all forms of compensation, not just salary.
Leona Helmsley (a prominent New York City realty figure), was convicted of tax fraud in federal court. This occurred because her company paid to remodel her house without her reporting it as income.
Repetti stated that "the IRS routinely examines for abuse of fringe benefits whenever auditing closely-held businesses."
Michael Cohen, a former Trump lawyer, has been cooperating in Vance's investigation. He wrote in his book "Disloyal” that Trump and Weisselberg were masters at allocating expenses related to non-business issues and finding a way of categorizing them so that they weren't taxed.
After answering a newspaper advertisement for an accountant, Weisselberg began his career working for Donald Trump's father, Fred.
Weisselberg kept a low profile, except for a 2004 appearance on "The Apprentice", a reality TV show hosted by Trump. Weisselberg was rarely mentioned in news articles prior to Trump's election. Questions were raised about his finances and charitable donations.
Cohen claimed that Weisselberg made the secret payment to Stormy Dans for $130,000. Stormy Daniels was the porn star who claimed she had sex only with Trump.
