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Trump Organization, CFO are charged in 'sweeping' 15-year tax fraud

EconomyJul 02, 2021 12:19AM ET
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2/2 © Reuters. FILE PHOTO: Trump Organization chief financial officer Allen Weisselberg looks on as then-U.S. Republican presidential candidate Donald Trump speaks during a news conference at Trump Tower in Manhattan, New York, U.S., May 31, 2016. REUTERS/Carlo Allegri/ 2/2

By Karen Freifeld, Jonathan Stempel and Jan Wolfe

NEW YORK (Reuters) -Donald Trump's namesake company and longtime financial chief pleaded not guilty on Thursday to what a New York prosecutor called a "sweeping and audacious" tax fraud, arising from a probe into the former U.S. president's business and its practices.

The indictment against the Trump Organization and its chief financial officer Allen Weisselberg is the first in a nearly three-year investigation by Manhattan District Attorney Cyrus Vance, which New York Attorney General Letitia James joined in May.

It could undermine the Trump Organization's relationships with banks and business partners, and complicate Trump's political future as the Republican resumes addressing rallies and mulls a 2024 White House run.

Trump himself has not been charged, and renewed his claim that the probe was a political "witch hunt." Vance and James are Democrats.

Prosecutors accused the Trump Organization and Weisselberg of having since 2005 defrauded tax authorities by awarding "off the books" benefits to company executives.

Weisselberg, 73, was charged with concealing $1.76 million of income, including rent for a Manhattan apartment, lease payments for two Mercedes-Benz vehicles and tuition for family members, with Trump signing checks for the tuition himself.

Prosecutors said this enabled Weisselberg, who has worked for Trump for about 48 years, to evade roughly $900,000 in taxes and collect $133,000 in refunds he did not deserve.

"To put it bluntly, this was a sweeping and audacious illegal payments scheme," Assistant District Attorney Carey Dunne said at the defendants' arraignment in Manhattan Criminal Court. "This is not a standard practice in the business community, nor was it the act of a rogue or isolated employee."

The 15-count indictment charged the defendants with scheming to defraud, tax fraud and falsifying business records.

Weisselberg was also charged with grand larceny, which carries a maximum 15-year prison term. The Trump Organization could face fines and other penalties if convicted.

"If the allegations in the indictment are true, this was pants-on-fire tax evasion," said Daniel Hemel, a tax law professor at the University of Chicago. "It is very hard to believe that this could have happened without the man on top knowing."

'WITCH HUNT'

Thursday's charges could increase pressure on Weisselberg to cooperate with prosecutors, which could be crucial to any future case against the former president.

Ross Garber, a lawyer who teaches at Tulane Law School in New Orleans, said the indictment "appears to be a further effort to coerce Weisselberg to cooperate against Trump. Time will tell whether it works."

In a statement, Trump said: "The political Witch Hunt by the Radical Left Democrats, with New York now taking over the assignment, continues. It is dividing our Country like never before!"

Vance and James attended Thursday's arraignment.

"This investigation will continue, and we will follow the facts and the law wherever they may lead," James, who had been conducting a related civil probe, said in a statement.

Weisselberg wore handcuffs as he was led to the courtroom, and after being released was driven away in a black SUV. "You're going to prison," an onlooker shouted.

"He will fight these charges in court," Weisselberg's lawyers Mary Mulligan and Bryan Skarlatos said in a joint statement before the charges were announced.

Alan Futerfas, a lawyer for the Trump Organization, told reporters that the company was "very optimistic" the charges would not significantly hurt its business.

"If the name of this company was something else, I don't think these charges would have been brought," he said.

In a separate statement, the Trump Organization accused Vance of using Weisselberg as "a pawn in a scorched earth attempt to harm the former president.

"This is not justice; this is politics," the company said.

BROAD PROBE

Trump's company operates hotels, golf courses, and resorts around the world.

Before entering the White House in January 2017, Trump put the organization into a trust overseen by his adult sons Donald Jr and Eric, as well as Weisselberg.

It is unclear what role Trump now has at the company.

Vance's probe got a boost in February when he obtained eight years of Trump's tax returns.

Trump had spent 18 months, including two trips to the U.S. Supreme Court, to keep Vance from seeing them.

Vance has been examining an array of potential wrongdoing, including whether the Trump Organization manipulated the value of its real estate to reduce taxes and secure favorable loan terms.

He has also been examining hush money payments made before the 2016 presidential election to two women who said they had sexual encounters with Trump, which he has denied.

Michael Cohen, a former Trump lawyer who turned against his former boss, has said Weisselberg was involved in reimbursing him for payments to one of the women, adult film actress Stormy Daniels.

Cohen is cooperating with Vance's investigation.

Jennifer Weisselberg, the former wife of Weisselberg's son Barry, is also cooperating, and provided boxes of tax and other financial records.

Vance has been district attorney for 11-1/2 years. He leaves office at the end of the year.

Trump Organization, CFO are charged in 'sweeping' 15-year tax fraud
 

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Comments (38)
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Ad Cline Jul 03, 2021 1:07PM ET
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Trump is a carbon copy Mugabe(Zimbabwe). Trump tried to use his Justice Department to punish his enemies, at the same time, corrupting the goverment and enriching himself and his cronies. because we're a Democracy, and not a third world country, he was stopped, Trump and his cronies now face a criminal investigation, and legal action for their crimes.
Eudon Hickey
Eudon Hickey Jul 03, 2021 12:28AM ET
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What is happening now in the USA, is what Robert Mugabe(Zimbabwe) did to his opposition. So i think it is fair to say USA is 3rd world now
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jul 02, 2021 3:38AM ET
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Case closed. bye bye
Kaveh Sun
Kaveh Sun Jul 02, 2021 2:56AM ET
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The main fish is Trump. They will try to cut him a deal so he can talk against Trump. Or after his trial is over, he cant plead the 5th. He has to talk. Sooner or later, Dem prosecutors will get Trump.
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jul 02, 2021 2:34AM ET
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A cheats B and B cheats C; that is the American way. This is not even an infarction or may be misdemeanor. Garden variety kid stuff.
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Ad Cline Jul 02, 2021 2:34AM ET
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muralikrishna ...have the goverment find out you have been committing tax fraud and see what happens to you.
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jul 02, 2021 2:31AM ET
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Being a world class crook is not a crime. Judge will drop the case citing, let's get civil.
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Ad Cline Jul 02, 2021 2:31AM ET
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being a world class crook is a crime and you could go to jail.
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Ad Cline Jul 02, 2021 2:18AM ET
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Donald Trump is a crook. he is being investigated for fraud. banking fraud, Tax fraud, and election fraud. he was a crook before he was President, while he was President and now is still a crook. this grand jury is still in session ...its not over for Trump and his cronies, its just beginning.
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jul 02, 2021 1:55AM ET
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Cyrus will be fired and sent back to Law school. This is a civil court case.
Ominous Owl
Ominous Owl Jul 02, 2021 1:43AM ET
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Attack on Free Speech is real. One of the intrinsic qualities of Socialism is curb on dissenting voices because Socialism cannot be supported with reasons. Clearly, a witchhunt. As a foreigner, I see that America looks like a whining nation under Biden. Ironfists like Chinese/Russians have everything to love about him. They know the long term effects of radical liberalism & cuckoldry is death. Its a time game.
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Ad Cline Jul 02, 2021 1:43AM ET
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owl ..I see your still trying to rationalize your attempt to promote lies and muzzle the truth and the first amendment rights of a free press to tell the truth about you little tin god Donald Trump, serial liar, thief, bully, coward and self admitted sexual pervert. a President that tried to end democracy in America, that tried to steal an election through inserection and lies, supporting sidition and authoritarianism. trump is now being investigated for tax fraud banking fraud and election fraud. now, you apparently need to learn to read a dictionary since you don't know how to use the word "socialism". Trump is a crook has always been a crook. that's who you support.
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Ad Cline Jul 02, 2021 1:43AM ET
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the Russians and the Chinese loved Donald Trump. Trump was doing their job do them destroying America's reputation as a Democracy, and using divisiveness to destroy American unity; making America weak and feeble.
Light Bringer
Light Bringer Jul 02, 2021 1:21AM ET
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I am not surprised by the crimes only that the USA will actually sink their teeth into the depths of the trump orgs(and senior trump himself) criminality.
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jul 02, 2021 12:54AM ET
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Case closed: Facts are wrong, law doesn't match, assumptions unfounded, conclusion flawed. Go to civil court for collection or appoint collection agency to collect unpaid taxes, if any. Don't forget to share with Long Island
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jul 02, 2021 12:50AM ET
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Final Judgement: This whole thing is and belongs in a civil court, not a criminal matter. Cyrus and IRS may file case in Manhattan civil court. Let's get civil here.
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Ad Cline Jul 02, 2021 12:22AM ET
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hickey... Trump's actions makes Clinton look like choreboy. then there's Trumps twice annual trips to Epstein's parties at his compound.
Eudon Hickey
Eudon Hickey Jul 02, 2021 12:14AM ET
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Shows you how low the standard is, in getting the real truth out
Eudon Hickey
Eudon Hickey Jul 02, 2021 12:13AM ET
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Journalist will report of a tax issue of ~$1m, but will say nothing about the pe doph rings of Bidens and Clintons
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Ad Cline Jul 02, 2021 12:13AM ET
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Hick ey... I see your still trying to change the subject with things you make up.
Kelly Mayer
Kelly Mayer Jul 01, 2021 9:33PM ET
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reuters cannot survive without Trump.
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Ad Cline Jul 01, 2021 9:33PM ET
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Kelly Mayer.. you seem to be the one who's having trouble living without Trump.
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Ad Cline Jul 01, 2021 8:02PM ET
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corporations and their executives that break the law and commit tax fraud can go to jail. there have been scores of corporate executives who have done less and gone to jail. corporations don't get away with tax fraud. What makes this case so interesting is the level of fraud and corruption. and the way trump's corporation used the trump foundation not only as a slush fund to pay off politicians and personal problems but its use to avoid taxes on benifits to "friends" and "special executives".
Dionte Edwards
Dionte Edwards Jul 01, 2021 7:55PM ET
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Amen
Silence Dogood
Silence Dogood Jul 01, 2021 6:55PM ET
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"Sweeping" lmao.. more feeble Reuters excrement. Lodging and transportation are provided to millions of employees nationally.. that doesn't constitute compensation. This has nothing to do with President Trump. It's not "sweeping". It's another embarrassing left wing poke at the man who won the last election. Pendulum's swinging.. 2022, 2024..
Benjamin McIntire
Benjamin McIntire Jul 01, 2021 6:55PM ET
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Triggered?
James Andrews
James Andrews Jul 01, 2021 6:28PM ET
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Wow Trump must be SQUEAKY clean if they can't get him on ANYTHING after trying so desperately
Don Getty
Don Getty Jul 01, 2021 6:28PM ET
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they just got his taxes not that long ago - mr clean won't be so when they've finished investigating - you don't go to the SCOTUS twice to block if there's nothing there to find!
Joel Schwartz
Joel Schwartz Jul 01, 2021 6:26PM ET
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I love all the Trump supporters who usually yell about immigrants and taxes supporting a rich man not paying taxes. Great double standard, you guys.
Paul Smith
Paul Smith Jul 01, 2021 6:26PM ET
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Republicans should go after Hillary for her Clinton foundation. she funneled millions of dollars through that foundation. and I'll bet there's a lot of tax frauds going on within the Clinton camp.
Silence Dogood
Silence Dogood Jul 01, 2021 6:26PM ET
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Conservatives are very pro legal immigration. It's also the fascist dems who are obsessed with taxing Americans. Nice try though.
Joel Schwartz
Joel Schwartz Jul 01, 2021 6:26PM ET
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Silence Dogood Americans are supposed to pay taxes, especially rich americans and corporations. That’s how government provides for citizens. Look at our national debt. Your grandparents said “HEY, MAKE THE KID PAY FOR IT LATER.”
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Ad Cline Jul 01, 2021 6:26PM ET
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Paul smith ...let's stay focused, there is plenty of proof that the Trump foundation was a political slush fund, and used to commit tax fraud.
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Ad Cline Jul 01, 2021 6:26PM ET
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Dogood ... Trump Republicans do not like immigrants. they like the idea of a fascist strongman keeping immigrants out of America.
Dan Hodel
Dan Hodel Jul 01, 2021 4:34PM ET
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“Allen Weisselberg? I don’t think I ever met the guy. Does he work in the janitor staff? Never heard of him.” - Donald Trump
Silence Dogood
Silence Dogood Jul 01, 2021 4:34PM ET
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rrrrright.. When you have nothing actual, just make up stuff. Classic dem move..
Tom Lemon
Tom Lemon Jul 01, 2021 4:26PM ET
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starts at the top. and the guilty always cry "witcg hunt" to distract.
Tom Lemon
Tom Lemon Jul 01, 2021 4:26PM ET
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witch hunt *
Dan Hodel
Dan Hodel Jul 01, 2021 3:18PM ET
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Law & order! Is that right red hats?
Silence Dogood
Silence Dogood Jul 01, 2021 3:18PM ET
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Danny don't cry when this turns out to be another embarrassing dem stunt.
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Ad Cline Jul 01, 2021 3:18PM ET
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what's the dogygood did Dan hit a nerve.
palmer gossett
palmer gossett Jul 01, 2021 3:11PM ET
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wow, taxes on 1.7 million
 
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