NEW YORK — Donald Trump’s company and its longtime finance chief were charged Thursday in what prosecutors called a “sweeping and audacious” tax fraud scheme in which the executive collected more than $1.7 million in off-the-books compensation, including apartment rent, car payments and school tuition.
Trump himself was not charged with any wrongdoing, but prosecutors noted he signed some of the checks at the center of the case. And one top prosecutor said the 15-year scheme was “orchestrated by the most senior executives” at the Trump Organization.
It is the first criminal case to come out New York authorities’ two-year investigation into the former president’s business dealings.
According to the indictment, from 2005 through this year, the Trump Organization and Chief Financial Officer Allen Weisselberg cheated tax authorities by conspiring to pay senior executives off the books by way of lucrative fringe benefits and other means.
Weisselberg alone was accused of defrauding the federal government, state and city out of more than $900,000 in unpaid taxes and undeserved tax refunds.
The most serious charge against Weisselberg, grand larceny, carries five to 15 years in prison. The tax fraud charges against the company are punishable by a fine of double the amount of unpaid taxes, or $250,000, whichever is larger.
The 73-year-old Weisselberg has intimate knowledge of the Trump Organization’s financial dealings from nearly five decades at the company. The charges against him could enable prosecutors to pressure him to cooperate with the investigation and tell them what he knows. Both Weisselberg and lawyers for the Trump Organization pleaded not guilty. Weisselberg was ordered to surrender his passport and was released without bail, leaving the courthouse without comment.
In a statement, Trump condemned the case as a “political Witch Hunt by the Radical Left Democrats.” Weisselberg’s lawyers said he will “fight these charges.”
The case is being led by Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James, both Democrats.
Vance has been investigating a wide range of matters involving Trump and the Trump Organization, such as hush-money payments made to women on Trump’s behalf and whether the company falsified the value of its properties to obtain loans or reduce its tax bills. The news comes as Trump has been more seriously discussing a possible comeback run for president in 2024. He has ramped up his public appearances, including holding his first rallies since leaving the White House.
In announcing the grand jury indictment, Carey Dunne, a top deputy in Vance’s office, said: “Politics has no role in the jury chamber, and I can assure you it had no role here.”
The Trump Organization is the entity through which the former president manages his many ventures, including his investments in office towers, hotels and golf courses, his many marketing deals and his TV pursuits. Trump’s sons Donald Jr. and Eric have been in charge of day-to-day operations since he became president. In addition to exposing the Trump Organizations to fines, the criminal case could make it more difficult for the business to secure bank loans or strike deals — a hit that comes at a particularly bad time, with the company already reeling from lost business because of the coronavirus and the backlash over the Jan. 6 attack on the Capitol.
“Companies that are being indicted, whether they are private or public, big or small, face serious collateral consequences,” said Daniel Horwitz, a white-collar defense attorney. “Companies in the financial services industry are reluctant to do business with them. Their access to capital is limited or cut off.”
Weisselberg came under scrutiny in part because of questions about his son’s use of a Trump apartment at little or no cost.
Weisselberg’s son Barry — who managed a Trump-operated ice rink in Central Park — paid no reported rent while living in a Trump-owned apartment in 2018, and he was charged just $1,000 per month — far below typical Manhattan prices — while living in a Trump apartment from 2005 to 2012, the indictment said.
