Trump’s company “misled” the tax authorities, the prosecutor says in the lawsuit

NEW YORK, Oct 31 (Reuters) – Former President Donald Trump’s real estate company misled tax authorities for 15 years, a prosecutor said on Monday in his opening statement in the federal tax fraud trial. ‘Trump Organization, while defense lawyers contested that the long-time head of the company. The financial officer had acted for his own benefit.

The company paid some executives — including former CFO Allen Weisselberg — in perks like rent and cars without reporting those benefits to tax authorities, and falsely reported bonuses as non-employee compensation, prosecutor Susan Hoffinger said. of the Manhattan district attorney’s office.

“This case is about greed and cheating, cheating on taxes,” Hoffinger said. “The scheme was carried out, directed and authorized at the highest levels of the accounting department in the company.”

The case is one of many legal problems face the 76-year-old Trump as he considers another bid for the presidency after losing in 2020.

Trump has not been charged in the case.

Weisselberg, who worked for Trump for nearly half a century, pleaded guilty in August to tax evasion on $1.76 million in personal income and agreed to testify in the trial as part of a deal for him to receive a sentence of five months in prison. He paid back nearly $2 million in taxes, penalties and interest, Hoffinger said.

The two Trump Organization units charged — the Trump Corporation and the Trump Payroll Corporation — have pleaded not guilty. His lawyers argued Monday that Weisselberg is not acting on behalf of the company.

“Weisselberg did it for Weisselberg,” Michael van der Veen, a lawyer for the Trump Payroll Corporation, said in his opening statement. “Greed made him cheat on his taxes, hide his deeds from his employer, and betray the trust built up over almost 50 years.”

Hoffinger said Weisselberg was “a prime beneficiary” of the scheme. But she said he acted as an executive of the Trump Organization, and that the company benefited by keeping top executives happy and saving on taxes.

Hoffinger said Trump paid for Weisselberg’s grandchildren’s private tuition, adding that the jury will see checks signed by Trump himself as evidence.

Van der Veen sought to shift the blame to accounting firm Mazars, which handled the company’s and Weisselberg’s tax returns.

Mazars did not immediately respond to requests for comment. In February, the firm dropped the Trump Organization as a client and said the financial statements it prepared for the company from 2011 to 2020 should no longer be relied upon.

FIRST TESTIMONY

If convicted, the Trump Organization — which operates hotels, golf courses and other properties around the world — could face $1.6 million in fines. It could also further complicate the real estate firm’s ability to do business.

The process is expected to last more than a month. Twelve jurors reached a unanimous verdict of guilty on each count of tax fraud, conspiracy to defraud, and falsifying business records.

She said that when Trump was elected president in late 2016, Weisselberg and the company “had to clean up these fraudulent tax practices” because of concerns about additional scrutiny. Companies stopped paying for their employees’ undeclared personal expenses, and Weisselberg began paying for his grandchildren’s tuition himself, Hoffinger said.

Susan Necheles, a lawyer for the Trump Corporation, said it was Weisselberg — not the company — who wanted to clean things up.

The prosecution’s first witness, Trump Organization controller Jeffrey McConney, testified that Weisselberg received a portion of his compensation as non-employee bonuses up to a certain point.

Prosecutor Joshua Steinglass asked him if he stopped when Trump was elected.

“I think it was a coincidence,” said McConney, who was granted immunity from prosecution because he testified before the grand jury that indicted Weisselberg and the companies.

“Did you say by coincidence?” Steinglass replied. McConney, who prosecutors see as a hostile witness, said yes.

Weisselberg stepped down as CFO when he was indicted, but remained on the payroll as a senior adviser. After his guilty plea, he continued to be paid but was placed on furlough.

The case is separate from a $250 million civil lawsuit filed by the New York attorney general against Trump, three of his adult children and his company in September, accusing him of lying to banks and insurers by overstating the his real estate assets and Trump’s net worth.

Trump is also facing a federal criminal investigation into the removal of government documents from the White House when he left office last year.

Reporting by Karen Freifeld and Luc Cohen in New York Editing by Noeleen Walder, Alistair Bell and Howard Goller

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