Tax fraud trial: Trump Org. Attorneys point finger at Allen Weisselberg in closing argument



CNN

The closing arguments began Thursday in the Trump Organization’s tax fraud trial, in which defense attorneys blamed the alleged criminal tax systems on former CFO Allen Weisselberg, who has already pleaded guilty to 15 counts in the case.

“Weisselberg did it for Weisselberg,” defense attorney Michael van der Veen told jurors Thursday — a mantra defense attorneys have recited throughout the trial.

The crux of the trial of two Trump Organization companies ultimately asks the jury to decide whether Weisselberg and the company’s controller acted illegally to benefit the company, defense attorney Susan Necheles told jurors Thursday morning. She acknowledged that the defense team and prosecutors do not argue about most of the illegal acts alleged in the case, but disagree on whether the company is criminally responsible for the crimes committed by its employees.

“The evidence establishes beyond a reasonable doubt that Allen Weisselberg or Jeffrey McConney had intent to benefit Trump Corporation when Allen Weisselberg cheated on his personal tax returns and Jeffrey McConney assisted him,” Necheles told the Trump Organization controller. “You will see that there was no such intention.”

Coming to a formality in the bylaws at issue in this case, the defense attorney also told the jury not to consider McConney a “high management agent” for the company since he was micromanaged by Weisselberg, who really ran the show.

“The purpose of Mr. Weisselberg’s crimes was to benefit Mr. Weisselberg,” Necheles said. “He admitted under oath that these crimes were the result of his own greed.”

Two Trump Organization companies are charged with tax fraud and falsifying business records in what prosecutors say was a 15-year plot to defraud tax authorities by failing to report and pay taxes on compensation paid to employees.

Weisselberg pleaded guilty in August to failing to pay taxes on approximately $1.7 million in extra-budgetary compensation he received in the form of a company-sponsored New York City apartment and other expenses.

“He helped make the Trump Organization what it is today, but he screwed up along the way. He got greedy,” said the defender. But Weisselberg hid his crimes from the Trump family, she said.

“He knew he was doing something wrong and was ashamed of it and kept it a secret,” Necheles said.

Necheles stressed that Donald Trump never knew of Weisselberg’s plans and trusted the longtime associate so much that the former president appointed him trustee of his Revocable Trust, which was created when he took office.

The defense attorney also noted that Mazars USA, the accounting firm that prepared the organization’s taxes, and its chief accountant, Donald Bender, have never reported illegal behavior to the company’s owners, the Trump family.

Weisselberg, who pleaded guilty to 15 counts in the case and will serve some jail time, “is now atoning for his sins,” Necheles said. The plea deal also required his testimony in court, she reminded the jury.

“He’s worried that he’s going to Rikers Island,” she said. “He worries he could get a lot more time if prosecutors accuse him of lying.”

“Prosecutors forced him to testify against the company he helped build,” Necheles said.

Weisselberg never calculated the financial benefit the company would derive from its plans the way he meticulously tracked his own personal taxes, defense attorneys said.

“He has obsessively planned his own personal taxes and dishonestly and honestly figured out how to pay the lowest possible taxes,” Necheles said.

Van der Veen spoke on behalf of Trump Payroll Corporation Thursday afternoon.

The defense attorney accused prosecutors of bringing the charges against the two Trump Organization organizations because Weisselberg wasn’t enough. “They wanted something that the Trumps were attached to,” he said.

Van der Veen pointed out that the prosecutors had not produced any corporate tax returns from the defendant companies, only personal tax returns from Weisselberg. The trial evidence proved Weisselberg’s greed but not the company’s, the attorney said.

“It showed us that Weisselberg is a flawed man with a very human history,” said van der Veen.

The Trumps trusted the longtime associate that he was careful to avoid situations like the criminal charges at issue in this trial, the defense attorney said.

The Trump Payroll Corporation is a “pass-through” entity used to pay Trump employees and always ends up with zero balances, van der Veen said. “It has no profit. It never will.”

Van der Veen also noted that any payroll tax savings that the company could conceptually have benefited from via Weisselberg’s tax systems compare to the company’s massive outlays, including more than $250 million in payroll costs over eight years , would be minimal.

Prosecutor Joshua Steinglass began his closing arguments Thursday afternoon, telling jurors that the Trump Organization has “cultivated a culture of fraud and deception” by squandering perks on executives and failing to report the perks to tax authorities.

The company aims to “put more money in the pockets of executives while keeping their own costs as low as possible,” Steinglass said.

The prosecutor summed up the company’s benefits from alleged plans as a “win-win.”

“They pay less, and executives take home more,” Steinglass said. “This is conspiracy.”

Over the years, the companies have saved hundreds of thousands of dollars in unpaid Medicare taxes and raises they didn’t have to give their executives, the prosecutor said, pushing back defense efforts to pin the plans solely on Weisselberg.

“Here the interests of Allen Weisselberg and the corporations are perfectly aligned. The fraud scheme was not a betrayal of Trump Corporation — it was colluded with Trump Corporation,” Steinglass said.

Steinglass acknowledged Weisselberg’s balancing act in court, given his loyalty to the company and his plea for the deal with the state. He suggested that Weisselberg may not be the prodigal son of his longtime employer, as defense attorneys have described, but rather was chasing his January bonus check, which the company is “dangling” to keep him close until the end of the trial.

“Don’t say too much, Allen, or you won’t get half (a million dollars) — you know you have to pay the state back now,” Steinglass scoffed.

Steinglass also resisted the defense narrative that McConney was only a micromanaged employee of Weisselberg and could not be considered a “high management agent” in the alleged tax systems — a key element discussed at trial.

The corporate controller acknowledged that he knew some tax actions he had taken on behalf of Weisselberg were illegal at the time, Steinglass reminded the jury.

“He knew he was cooking the books, and he did it anyway,” he said.

Steinglass showed the jury a table detailing 1,099 bonuses for Weisselberg and other senior executives, including fringe benefits not reported on tax records.

The chart should be titled “‘How I did it’ by Jeff McConney,” Steinglass quipped.

The prosecutor wondered aloud if the fraud would ever have been exposed if McConney hadn’t put it in writing.

However, McConney was an unreliable witness on the stand who clearly favored the defense team during his testimony, Steinglass said.

The corporate controller never reported to Trump the fraudulent business practices that Weisselberg had accused him of because he assumed the company owner already knew about them, Steinglass suggested to the jury.

“He undoubtedly knew what you all must at least suspect — that Donald Trump knew exactly what was going on with his top executives,” Steinglass said.

Trump Organization executives like Weisselberg and McConney began “cleansing” the company’s internal business practices in 2016, around the time Trump first ran for president and eventually took office. The defense has claimed the Trump family was unaware of the questionable accounting practices until an internal review was conducted at the time.

Steinglass also said the defense team scapegoated Bender, Mazars’ accountant, who said he was unaware that Weisselberg had underreported his taxable income for years.

“If you want to keep committing tax fraud, don’t ask your accountant for his blessing,” Steinglass said.

Prosecutors will continue their closing arguments on Friday morning. Judge Juan Merchan said the jury could hear the case next Monday.

This story has been updated with additional developments.

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