The false accusation of tax fraud, which was not sealed Thursday against Donald Trump’s longtime auditor Allen Weisselberg, threatens the 73-year-old director with many years in prison and puts great pressure on him to implicate the former US president.
Prosecutors allege that Weisselberg, the Trump Organization’s chief financial officer, avoided more than $ 900,000 in taxes by taking a portion of his annual salary in benefits, including apartments, luxury cars and a cash bonus during the holiday, described in financial records as “holiday entertainment.”
Judges are often reluctant to convict older defendants without prior registration of jail time, said Ethan Greenberg, a retired New York judge who is now a defense attorney. But the indictment – which describes a deliberate scheme to avoid taxes of $ 1.7 million in income over 16 years – “convinces me and should convince Weisselberg that a substantial prison sentence is possible,” Greenberg said.
And that’s the point: convincing Weisselberg. The case, filed by Manhattan District Attorney Cyrus Vance, will provide an acid test of Weisselberg’s loyalty to the family he has served for nearly five decades. Prosecutors moved to indict the accountant after months of unsuccessful attempts to secure his cooperation in the far-reaching investigation into possible financial fraud at the Trump Organization. Now they want to see if the prospect of crime and jail changes meaning.
Weisselberg pleaded guilty during a court appearance in Manhattan on Thursday. In a brief statement, his lawyers said he would fight the charges in court.
Trump was not indicted Thursday, but prosecutors charged fraud charges against the Trump Organization, which experts say could create headaches for Trump in connection with banks. The indictment involves others who are not charged, including Weisselberg’s son Barry, who worked for the Trump Organization, and an unnamed “Co-Conspirator Number 1.”
Trump released a statement calling the case a continuation of “the political witch-hunt of the radical left-wing Democrats, with New York now taking over the task.”
Vance’s office said the investigation will continue, as will New York City Attorney Letitia James, who is also investigating Trump’s case.
Weisselberg has been a key figure in Trump’s empire for decades. He began working for Trump’s father, Fred, at the company’s office in Brooklyn, before coming to his son when Donald Trump broke into Manhattan property. Weisselberg served with Trump’s children on the board of Trump’s now disbanded family fund and on the trust that governed his business when he became president.
While it is unusual for prosecutors to file criminal charges based on untaxed benefits, former prosecutors and other criminal justice experts say the allegations are more serious than most. The indictment describes a long-standing scheme from Weisselberg and the company to avoid tax by taking a portion of his $ 940,000 annual salary in apartments, cars and other unrecognized benefits. The untaxed compensation amounted to $ 1.76 million, according to the indictment.
Prosecutors allege that the Trump organization kept internal records that made it clear that all of these benefits were part of Weisselberg’s annual compensation – essentially a separate set of records that contradict Weisselberg’s tax return.
The most serious of the charges against Weisselberg, second-rate big fear, has a sentence of up to 15 years. Criminal law experts said it was unlikely Weisselberg would get a sentence for that long. Daniel Alonso, Vance’s former deputy, said a $ 900,000 tax fraud charge would more often lead to a sentence of one to three years, but possibly more.
State law allows for probation in such cases, Alonso said, “but I do not see a judge giving him probation.”
Weisselberg faces 14 other charges, including tax fraud and conspiracy. The Trump organization was charged with ten counts of crimes including tax fraud and forgery of business records, which could lead to financial sanctions.
The indictment alleges that Weisselberg accepted more than $ 133,000 in federal and state tax refunds, which he did not owe.
He also goes affirmatively into the federal treasury and says: Give me money that was not his. It’s called theft, ”said John Moscow, a former prosecutor in the Manhattan District Attorney’s Office.
Dan Horwitz, defense attorney and former prosecutor in Manhattan, said the charges increase pressure on Weisselberg to provide investigators with information about Trump.
Is it a sufficient hammer for someone to think of cooperation? I would believe it, ”he said.
The case is based in part on information from Jennifer Weisselberg, ex-wife of Allen’s son, Barry. The son worked for the Trump Organization as the leader of ice rinks and a carousel in Central Park under contracts with New York City.
Jennifer Weisselberg spoke several times with prosecutors and provided tax returns and other records documenting apartments, private schooling and other benefits that were not reported as income.
Any legal threat to Weisselberg’s son can also be an incentive for the father to cooperate.
In particular, the indictment contains no charges related to a key focus of Vance’s investigation – whether the Trump Organization’s illegally manipulated values of Trump’s property holdings – inflate them to receive loans for example or lower them to avoid property taxes.
Weisselberg’s testimony could be crucial to a case based on these valuations. Trump was questioned in a civil lawsuit in 2007 about how he assigned values to his properties on the financial statements. He said he would give his opinion – but left the final decisions on values to Weisselberg.
Both Vance’s office and attorney general obtained records and testimony of some Trump properties, most notably the Seven Springs property north of New York City. Trump agreed to give up building luxury homes on part of the property, entitling him to a $ 21.1 million charity deduction. Vance summoned development records for three cities and from Trump representatives about the deal.
Jessica Roth, a former federal prosecutor and now a professor at the Benjamin N. Cardozo School of Law, said she was affected by the specifics of the prosecution – and the fact that Weisselberg was not the only person to receive such benefits.
“I think it is reasonable to expect that these will not be the last charges we see in this case,” she said.
(Reporting by Joseph Tanfani and Jan Wolfe; Additional Reporting by Tom Bergin; Editing by Brian Thevenot)