Trump Was ‘Explicitly Sanctioning Tax Fraud,’ Prosecutor Says
The former president is responsible for financial crime within his organization, a Manhattan prosecutor told jurors Friday
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Donald Trump was “explicitly sanctioning tax fraud” when he green-lighted a salary reduction for an executive who would make up for this cut by pocketing plum, untaxed benefits, Manhattan prosecutors claimed Friday.
Joshua Steinglass made the accusation during the second day of his closing argument in the criminal tax-fraud trial against several of Trump’s companies. Steinglass referred jurors to a 2012 document autographed by the former president himself, where he approved a $72,000 salary reduction for Trump Organization chief operating officer Matthew Calamari.
The prosecution has contended that Trump and his companies were well aware that Calamari, former chief financial officer Allen Weisselberg, and chief financial officer Jeffrey McConney were engaging in practices to secure untaxed income for executives vis-a-vis benefits such as gratis pads.
Steinglass’ comment prompted the Trump companies’ defense team to object — one of the many times they opposed points during his closing — and judge Juan Merchan called them to the bench. When their contentious confab came to an end, Steinglass continued in this vein.
Steinglass pushed back against what he described as the defense’s “narrative that Mr. Trump was blissfully ignorant” of his executives’ wrongdoing — and that the controversial mogul was a victim of Weisselberg and Calamari’s deception.
“He is not on trial,” Steinglass said of Trump, “but that does not mean that you should believe the defense’s narrative that Allen Weisselberg and Matt Calamari went rogue.”
“There’s been a lot of back and forth in this trial about the involvement of Donald Trump and other Trump family members,” Steinglass said at one point, contending the corporations would be legally liable whether any company owners knew. “We don’t have to prove a thing about what he knew or he didn’t know.
“Ultimately, it doesn’t matter.”
Steinglass’ first day of closings went into similar territory, with him telling jurors Thursday: “The Trump organization … cultivated a culture of fraud and deception.”
“It’s not that the folks at the Trump Organization didn’t know what they were doing was illegal — it’s just that they didn’t care,” Steinglass also said.
This line of argument hearkened to prosecutor Susan Hoffinger’s opening, which closely linked Trump to an alleged illegal compensation scheme that purportedly lined the pockets of Weisselberg, his longtime moneyman, and other company honchos.
During defense closings on Thursday, two Trump company lawyers squarely placed the blame on Weisselberg while also casting him as a sort of tragic figure — a man whose admirable loyalty was no match for subsuming avarice.
“Mr. Weisselberg dedicated his life to the Trump family … to Fred, to Don, to Don Jr. He helped grow the Trump Organization into the company it is today,” said defense attorney Susan Necheles. “But along the way, he messed up, he got greedy — and once he started, it was difficult for him to stop.”
“Mr. Weisselberg admitted that during this long scheme, no member of the Trump family knew about his ongoing efforts to evade taxes. He was ashamed of what he was doing: You saw him on the witness stand, almost crying,” Necheles told jurors. “He knew he was doing something wrong and he was ashamed of it, and he kept it secret. When his wrongdoing came to light, the Trump family did not fire him, they did not kick him to the curb after nearly 40 years. How do you fire a member of your own family?” Necheles asked. But, “Mr. Weisselberg broke the law … Mr. Weisselberg is paying for his own wrongdoing.”
And while Weisselberg turned state’s evidence to save himself from a lengthy prison sentence — agreeing to testify in exchange for a shorter jail term — he didn’t say anything that implicated Trump’s companies in wrongdoing, Neceheles argued. “He’s atoning for his sins, but as part of the plea deal, the prosecution forced him to testify against the company he helped to build. Now the prosecution’s case rests on one thing: trying to convince you, the jurors, that Mr. Weisselberg’s actions were done in behalf of the company.” Weisselberg, Necheles said, said “they were done solely to benefit himself — and that is the critical issue in this case.”
Necheles stressed that the key point hinges on who Weisselberg wanted to benefit. He wasn’t trying to help his employer, meaning that the Trump Organization wasn’t on the hook for criminal liability, Necheles contended. “Over and over again, Allen Weisselberg and [Comptroller] Jeffrey McConney testified that Allen Weisselberg committed these crimes solely to benefit himself … in other words, no intent to benefit the corporation,” Necheles claimed. “That is the critical issue in this case.”
The Manhattan District Attorney’s Office’s 2021 indictment of several Trump companies, including his eponymous Trump Organization, alleged a 15-year-long tax-fraud scheme. The purported financial misconduct stemmed from alleged untaxed benefits to Weisselberg, in a “sweeping and audacious illegal payments scheme.”
Prosecutors said that Weisselberg — who for decades was Trump’s top moneyman — benefited greatly for his nearly five decades of fealty to the family. Beginning in 2005, Weisselberg lived in a free apartment on Manhattan’s West Side. The Trump Corporation, which had the lease on this pad, paid Weisselberg’s rent, as well as his utility bills and parking garage fees, the indictment claimed.
These benefits didn’t stop at gratis living: Trump’s company allegedly paid for the leases on two Mercedes Benzes that Weisselberg and his wife allegedly used as their personal rides. Several of Trump’s companies also gifted cash to Weisselberg during the holiday season, so he could provide “personal holiday gratuities,” per prosecutors’ previous statements. Altogether, these plum perks amount to $1.7 million in untaxed benefits.
Weisselberg pleaded guilty in August to a 15-count indictment involving these payouts. Weisselberg responded “yes, your honor” when Merchan asked whether he “engaged in a scheme” with the Trump Organization “to defraud federal, New York state, and New York City tax authorities.” Weisselberg’s bombshell admission seemed to directly implicate Trump’s businesses in criminal activity, such as tax fraud and falsifying business records. Weisselberg testified for the prosecution at trial; the plea deal stipulated that he had to “testify truthfully” if called to the stand.
Indeed, Weisselberg was the prosecution’s star witness. Over several days of testimony, Weisselberg tied Trump’s companies — and to some extent the ex-president himself — to illegal tax shenanigans. He said “the rent was authorized by Donald Trump,” when asked about the free apartment. Weisselberg also told jurors that the Trump Corporation paid his utility bills there. “It’s your understanding that was authorized by Mr. Trump?” Hoffinger asked. Weisselberg said: “That was my understanding, yes.” Weisselberg also testified that Trump paid his grandchildren’s private-school tuition. Prosecutors contend this constituted a benefit that also should have been taxed.
Weisselberg’s second day on the stand was far more dramatic, with him saying that he and other execs worked to scrub fishy financial practices from several Trump companies’ books when the real-estate mogul became president. “We were going through an entire cleanup process at the company after Mr. Trump became president so that everything was done properly,” Weisselberg testified. “When Mr. Trump became president and everybody was looking at our company at every different angle,” Weisselberg continued, they went through “all the practices we’d been utilizing over the years and … we corrected everything we had to correct.”
Weisselberg won’t be sentenced until after the trial concludes, “to ensure compliance” with his end of the bargain. He also has to pay about $2 million in unpaid taxes and penalties. With compliance, Weisselberg’s sentence would be five months in jail followed by five years probation. Notably, the arrangement is not a cooperation deal; Weisselberg had to provide testimony if asked, and wound up doing so.
Necheles also insisted that Weisselberg’s changing pay after Trump became president — he stopped taking untaxed benefits and, in 2018, got a real raise — did not indicate financial wrongdoing on the company’s part.
“After Donald Trump became president of the United States, the Trump Corporation and its employees went through some very tough times,” Necheles said. “They were overworked and understaffed.” They couldn’t hire people whom they didn’t know and trust. “Life had become very difficult for the employees,” Necheles said. “Jeffrey McConney told you it was no longer a fun job.”
Eric Trump, who was effectively running things at Trump Org, “was far more generous with raises than his father.” This — not wrongdoing — explained Weisselberg and McConney’s raises some four years ago.
Trump Payroll Corporation lawyer Michael van der Veen similarly blamed Weisselberg. “Weisselberg did it for Weisselberg,” he said at various points during closings. At times, van der Veen struck the lectern to drive home his point with a loud noise. Weisselberg turned on the companies, he said, because he had no other choice. “The prosecutors had him by the balls,” van der Veen said.
While Necheles’ depiction of Weisselberg had a clear and familiar narrative arc — Icarus-meets-financial-crime, if you will — it’s unclear how this landed on jurors. Indeed, it appeared that two panelists were having some trouble keeping their eyes open.
Necheles did deserve credit, though, for recognizing the lugubrious nature of a trial where purported smoking guns take the form of ledgers and receipts. “It’s a tax case, and I know that some of the evidence, testimony has been deadly boring,” Necheles said while thanking jurors for their service. Several chuckled.
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