Prosecutors accuse Trump Organization of ‘greed and cheating’ in tax fraud trial
For years, as Donald Trump was soaring from reality TV star to the White House, his real estate empire was bankrolling big luxury perks for some of his top executives.
Now Trump’s company, the Trump Organization, is on trial for criminal tax fraud – on the hook for what prosecutors say was a 15-year scheme by his most trusted lieutenant to avoid paying taxes on those fringe benefits.
The seminal trial in New York got truly underway on Monday with prosecutors arguing that the company fraudulently evaded tax by paying a key executive $1.76m through such perks as a free apartment, a leased Mercedes and tuition fees for his grandchildren.
The case could land the Trump Organization’s sprawl of 500 business entities with a criminal conviction that will make it harder for the former president’s company to do business. It could also be hit with $1m in fines.
“This case is about greed and cheating – cheating on taxes,” prosecutor Susan Hoffinger said during an opening statement, as the Manhattan district attorney’s office began to build its case. The court will hear from key former executive and prosecution witness Allen Weisselberg, the former chief financial officer at the Trump Organization, who has separately already pled guilty to 15 counts of tax fraud.
Hoffinger said that evidence would show that Weisselberg’s fraud implicates the Trump corporations, the Trump Organization and Trump Payroll Corp. From 2005 to 2017, “when most of the criminal conduct occurred”, the prosecutor noted, these companies were “owned by Donald Trump”.
“We all know that corporations aren’t people – they can’t think or act on their own,” Hoffinger argued. But even after Trump was inaugurated as president in 2017 and the companies placed in a trust, she said, they “were still effectively owned by Donald Trump”. It was only then that the companies “finally had to clean up these fraudulent tax practices”.
But defense attorneys for the organization asserted that blame for Weisselberg’s tax fraud lay solely with him. Trump Organization lawyer Susan Necheles told the jury that the fraud scheme started with Weisselberg “and it ended with Allen Weisselberg”.
“So when the prosecutor said the Trump Organization did something illegal for Allen Weisselberg, what they really mean is that Allen Weisselberg did something illegal,” Necheles said. “The evidence will show the prosecutors’ entire theory of the case makes no sense.”
Michael van der Veen, a personal injury lawyer representing Trump Payroll was a member of Trump’s defense during his historic second impeachment for inciting the 6 January 2021, insurrection at the US Capitol, when extremist supporters wanted to overturn the certification of his loss to Joe Biden. On Monday van der Veen argued that Weisselberg had betrayed the Trump companies.
“He was trusted by everyone, he was trusted to protect this company,” van der Veen said. “He was like family to the Trump family, and no employee was trusted more than he, but he made mistakes.”
The case, one of three Trump-related hearings before state judges in three New York courthouses this week, is the first relating to the former president’s businesses to come to trial since he left office.
A separate civil case, which names Trump, his three eldest children and the Trump Organization, in a sprawling indictment alleging “significant fraudulent and illegal business activity”, has been brought by New York attorney general Letitia James.
Weisselberg, only agreed to testify as part of his plea deal, he is not formally a co-operating witness.
Judge Juan Manuel Merchan anticipates the trial will last four weeks. A hearing is due in the pending civil fraud trial brought by the attorney general and, in another case, jury selection began in a civil case brought by protesters who say they were assaulted by security guards outside Trump Tower.
Separately, Trump petitioned the US supreme court on Monday to block Congress from gaining access to his elusive tax returns.