Allen Weisselberg links Trump to illegal tax scheme
Donald Trump, Allen Weisselberg and Donald Trump Jr. (AFP)

Former Trump Organization financial chief Allen Weisselberg took the stand in Manhattan State Supreme Court on Tuesday in the company's criminal trial on tax fraud charges. He testified that he received $1.76 million in untaxed, off-the-books perks from the Trump Organization, confirming several aspects of the district attorney's case against the former president's company.

Prosecutors allege that the Trump Organization was involved in an illicit compensation scheme that lined the pockets of executives like Weisselberg. After pleading guilty to a 15-count indictment in August, Weisselberg agreed to "testify truthfully" against the Trump firm.

He testified that Trump suggested in 2005 that he move into a luxury Riverside Drive apartment using company funds, and even signed the lease for the property. In addition to paying for Weisselberg's rent, the Trump Organization covered his utility and parking fees, according to the indictment.

"It's your understanding that was authorized by Mr. Trump?" Assistant District Attorney Susan Hoffinger asked about the payment of utilities at the rent-free apartment on Tuesday.

"That was my understanding, yes," Weisselberg responded.

"He said it would help me be able to spend more time at the office rather than sitting on a train for three hours back and forth [from Long Island] … and make my life easier," Weisselberg told the jury.

Trump's companies also paid for Weisselberg's "homes and for an apartment maintained by one of his children," including "new beds, flat-screen televisions, the installation of carpeting, and furniture for Weisselberg's home in Florida," according to prosecutors.

Weisselberg admitted that he knew he owed taxes on the Upper West Side apartment, as well as leases on two Mercedes-Benz and his grandchildren's private school tuition. He confirmed that he underreported his income and thus knew his tax forms were false.

When asked if Trump paid for the private schools personally, Weisselberg said "correct" and added that he knew that these perks should have been taxed, but both he and the Trump Payroll Corporation did not treat them as reported income on his W-2s.

"Did you know at the time you owed taxes on those amounts, sir?" Hoffinger asked.

"Yes," Weisselberg replied.

Hoffinger then asked whether Jeffrey McConney, senior vice president and controller for Trump Corporation, helped Weisselberg in the tax fraud scheme.

"In my mind, I absolutely felt that [McConney] knew it should have been reported," Weisselberg said. "I asked Jeffrey McConney to back those amounts out of my bonus and salary."

Weisselberg also told prosecutors that Trump entities would often provide cash to him around Christmas so he could give out "personal holiday gratuities."

He said he knowingly withheld information about the perks from accountants because he knew they were inappropriate. "They may not have wanted to sign my tax return and prepare my taxes," he said in court.

Weisselberg attested that the tax fraud helped both him and the company, as the Trump Organization would have had to give him a raise that was double the amount that they spent on his personal expenses in order to provide the same benefit if taxes were withheld.

Trump authorized Weisselberg's compensation and that of other senior executives, and had an "open door policy" within the company according to Weisselberg's testimony.

"Who authorized executive compensation?" Hoffinger asked Weisselberg.

"Donald Trump," he responded.

"Did you authorize compensation for Matthew Calamari?" she asked.

"No," he responded.

"Jason Greenblatt?" Hoffinger asked, referring to the Trump Organization's general counsel.

"No," he repeated.

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As per the terms of his plea deal, after the trial ends, Weisselberg is expected to be sentenced to five months in Rikers Island prison, with an additional five years probation. However, if he violates the agreement, he could face up to 15 years, according to Judge Juan Merchan. He is also expected to return $2 million in unpaid taxes.

However, Weisselberg revealed that even after stepping down as CEO, pleading guilty, and testifying against the company, he is still receiving his full six-figure salary, and continues to show up to work in Midtown Manhattan. He still personally advises Eric Trump on business dealings and oversees company cash management.

Weisselberg even celebrated his birthday at Trump Tower after finalizing his plea deal. "It was a small cake. It was a cake. That was the party," he said of his birthday celebration.

Weisselberg is now on a paid leave of absence and told the jury that he will "hopefully" receive his $500,000 bonus in January in addition to his $640,000 yearly salary.

As for the Trump Organization, if convicted, they could be fined $1.6 million. Trump is not on trial, but prosecutors have closely connected him to the alleged illegal activity. In the opening statements on Oct. 31, prosecutors said that "when most of the criminal conduct occurred," between 2005 to 2017, the companies were "owned by Donald Trump."

Even after Trump became president, the enterprises "were still effectively owned by Donald Trump through a trust called the Donald J. Trump Revocable Trust," according to Hoffinger.

Trump's companies have pleaded not guilty, with his team dismissing the entire case as a political witch hunt. During her opening statement, Susan Necheles, who represents the Trump Corporation, said that Weisselberg was the guilty party when it came to the company's tax fraud, but that he was "paraded in front of cameras in handcuffs" and will endure "public humiliation."

"This was a man who had a beautiful life, he was a chief financial officer of a prestigious company, at his peak he made over $1 million a year and lived very well," Necheles said. "Allen Weisselberg had everything a man could want. But once he was arrested, he realized he was in danger of losing all of that and being sentenced to jail for years."

Necheles told the jury that the tax shenanigans "started with Allen Weisselberg and it ended with Allen Weisselberg."

"It was Allen Weisselberg who wanted to clean things up. Allen Weisselberg knew that he had been cheating on his personal taxes and all of a sudden the Trump Organization was going to get a lot of scrutiny," she claimed. "Donald Trump did not know that Allen Weisselberg was cheating on Allen Weisselberg's personal tax return[s]."

However, the prosecution dismissed this argument when they called Trump Organization controller Jeffrey McConney to the stand. Despite McConney's attempt to play dumb about his role in the tax scheme, assistant district attorney Joshua Steinglass was determined to get a straight answer out of him.

"You have a college degree in accounting, correct?" Steinglass asked. "You worked at an accounting firm for eight or nine years before you joined the Trump Organization, correct? You were in charge of payroll at a multi-billion dollar corporation for 30 years… you're a paid tax preparer. That requires at least some familiarity with the tax code, correct?"

McConney continued to insist that he wasn't aware the company needed to report untaxed corporate benefits.

Tensions have been rising since Monday, when McConney testified that he didn't know creating a fake job for Weisselberg's wife so that she could gain taxpayer benefits like Social Security was illegal.

"I knew it wasn't correct," McConney said. "Wasn't sure it was illegal."

Jurors also heard from Trump Organization accounts payable supervisor Deborah Tarasoff, who admitted that Weisselberg instructed her to go back and deleted evidence of a crime.

When asked why a copy of the company's ledger the DA's office obtained via a subpoena was missing the instruction "per Allen" next to a listed, untaxed company perk, Tarasoff responded: "somebody went in and deleted the name." Asked who, Tarasoff said "me." She also admitted that on Sept. 26, 2016, she and McConney deleted a dozen of those lines from the company's ledgers.