The Trump Organization will face criminal tax fraud charges in New York on Monday in a trial that could begin to tease out the many charges against the company and extend to its patriarch, Donald J Trump.
The former U.S. president faces legal troubles and mounting costs as he tries to reverse his 2020 election loss and remove government documents from the White House — his leadership is estimated to have Pacs cost close to $4 per month. House on his departure and a defamation case related to rape allegations.
Monday’s case centers on allegations that his Manhattan-based real estate firm defrauded New York tax authorities by offering company executives 15 years of “off-the-books” compensation, including car rental fees, apartment rents and tuition for relatives. Some wages enable companies to avoid paying payroll taxes.
If found guilty, the company run by Donald Trump Jr. and Eric Trump could face a $1.6 million fine and find its ability to operate hotels, golf courses and other assets hampered.
But what may be most interesting about this trial is its subplot and how it intersects with a separate civil investigation by New York State Attorney General Letitia James, which was obtained last month. A 200-page indictment accused the Trump Organization, Trump and his three adult children of or inflating property values and Trump’s net worth to obtain favorable bank loans and insurance.
The Manhattan investigation into the Trump company is on a rocky road to a jury trial. It started with District Attorney Cyrus Vance Jr and is now in the hands of his successor, Alvin Bragg. Two prosecutors leading the investigation resigned in February, one of whom said felony charges should be brought against the former president.
Lawyers for the Trump Organization have claimed the case was a “selective prosecution” motivated by opposing Trump’s political views — a claim that Judge Juan Merchan, who oversaw the case, rejected. They also said prosecutors were seeking to punish Trump’s company for allegedly failing to report fringe benefits on their individual tax returns.
But the stakes are high on both sides — prosecutors and defendants. Unlike Trump’s struggling efforts to challenge the 2020 election result, the Trump Organization has hired a team of A-level lawyers to deal with a series of matched prosecutors’ claims in a criminal trial against high-evidence responsibility.
The testimony of Trump Organization’s then-CFO Allen Weisselberg, 75, who was charged in the DA’s 2021 indictment but has since pleaded guilty 15 counts ranging from grand larceny to tax fraud to falsifying business records in exchange for his testimony.
Weisselberg has been called to testify, but he is not a cooperating witness. Still, the five-month sentence he agreed with prosecutors was contingent on true testimony. Crucially, the Manhattan district attorney made sure Weisselberg’s sentencing would be delayed until after the case was heard.
To prove the company’s guilt, the government has the power to hold accountable not only Weisselberg, but also other executives at the company, possibly Donald Trump himself, who may have tried to show they knew about the alleged tax plan.
“This is a very difficult case strategically for both Weisselberg and Trump because they could end up winning the battle and losing the war,” said a former federal prosecutor who now teaches law at New York University Andrew Weisman said.
“If they do the typical defensive cross-examination of Weisselberg and find him lying, then his deal is over and he’s under pressure to come back [on Trump] will be bigger. “
In this case, Weissmann noted, Trump Organization lawyers cannot simply try to undercut Weisselberg’s credibility without giving investigators evidence that their larger quarry Trump himself knew about rewarding executives tax-free compensation arrangement.
“The idea that Trump doesn’t know will be the key question Weisselberg is asked. If he denies that Donald Trump knows, you can see the judge say, ‘I don’t believe it, I’ll consider it when sentencing you to this point.'”
In that case, Merchan could have sentenced Weisselberg to up to 15 years in prison, rather than five months on Rikers Island – a hefty sentence for a 75-year-old.
In addition, Letitia James’ civil lawsuit alleges that Weisselberg committed fraud by making false statements to Zurich North American Insurance Company. In theory, Weisselberg could still be charged by Bragg if his testimony is deemed untrue.
“Obviously, they still want Weisselberg to cooperate,” Weisman said.
But as the trial begins next week, there’s a sense that Bragg’s case may be easier to prove than James’ complaint, which centers on establishing valuations but requires a lower burden of proof.
“Bragg’s allegations are more specific in that they claim the payments were clearly part of that person’s wages and track them, but only report the wages listed,” Weisman said.
“The problem for the defense is that if they say it’s a gray area and not a crime, they have to say Weisselberg is lying. If the judge agrees, Weisselberg is in a tough spot.”