Politics

Prosecutor says Donald Trump knew about his company’s alleged tax fraud scheme

Donald Trump was in on his company’s alleged tax scheme, said a New York prosecutor during closing arguments in the state’s criminal fraud and tax evasion case against two Trump Organization companies Friday.

The former president was not charged in the Manhattan District Attorney’s effort to prosecute the Trump companies, but his name was invoked frequently at the monthlong trial, by both sides.

On Friday morning before jurors were brought to the courtroom, defense attorneys argued that New York judge Juan Merchan should limit the prosecution’s ability to mention Trump in its closing arguments. Prosecutor Joshua Steinglass said he needed to talk about Trump in order to rebut defense arguments made “throughout the trial, and especially during their summations, this was happening without Mr. Trump’s knowledge, this was part of a betrayal.”

The two Trump Organization companies, called the Trump Corporation and Trump Payroll Corporation, were indicted in July 2021 and accused of using a variety of methods to reduce payroll liability from executive salaries with untaxed bonuses and luxury perks worth millions. 

“The fact is this was sanctioned, and that the practice was known to Mr. Trump, directly rebuts that incorrect narrative that the defense has been spinning since day one of this trial,” Steinglass said to the judge.

Merchan agreed.

“I think Mr. Steinglass has made out a fair argument for why it is necessary to bring up the name Donald Trump. I do not think it was gratuitous,” Merchan said.

The Trump Organization’s lawyers said in their closing arguments Thursday that Trump and his company were “betrayed” by Allen Weisselberg, the former chief financial officer who entered a guilty plea in the case in August. They portrayed Trump and two of his sons, Eric and Donald Trump Jr., as unaware of Weisselberg’s efforts to convert benefits — including hundreds of thousands of dollars a year in bonuses, rent, luxury car expenses and private school tuition — into untaxed compensation. The Trumps have not been accused of any crimes.

The company’s lawyers frequently repeated what Steinglass called a “mantra” Thursday: “Weisselberg did it for Weisselberg.” They argued that Weisselberg misled the company and other executives.

Weisselberg spent several days on the stand testifying about the scheme. He and two witnesses who received immunity during prior grand jury proceedings — current company controller Jeffrey McConney and outside accountant Donald Bender — described a series of methods used by Trump Organization executives to avoid taxes, and payroll liability, on large bonuses and luxury benefits. 

Weisselberg testified that when Trump first signed a tuition check for a private school Weisselberg’s grandchildren attended, he told Trump he’d pay the money back, and did so by reducing his salary.

Steinglass on Thursday pointed to several instances in which Trump signed off on luxury untaxed benefits — such as more than $195,000 in high end cars for Weisselberg and his wife — and signed executive bonus checks worth hundreds of thousands, logged as if they were payments to independent contractors. 

Steinglass displayed on the screen a chart presented by defense attorney Susan Necheles that she said showed “this started with Allen Weisselberg and ended with Allen Weisselberg.”

“But you know what she left out? The part about Donald Trump,” Steinglass said.

Prosecutors must prove that Weisselberg and McConney were “high managerial agents” acting “in behalf of” the company and “within the scope of their employment,” according to New York law. After much debate, Merchan said that means they had to have intended “some benefit” for the company with their actions.

Steinglass pointed to Weisselberg’s knowledge of the scheme’s effects on payroll liabilities, as well as his efforts to repay the company, as proof that he intended to help the company.

“The evidence is crystal clear that he had at least some intent to benefit the corporation, and that means that he was acting in behalf of it,” Steinglass said.

After Steinglass concluded, defense attorney Susan Necheles asked to reopen arguments, claiming Steinglass misled the jury about an email shown in the case. Merchan rejected that motion.

Michael van der Veen, another defense attorney, then asked for a mistrial, arguing that Trump was invoked too frequently by Steinglass during his closing.

“We….picked a jury believing that he wasn’t going to say Donald Trump sanctioned tax fraud,” van der Veen said. “The fact is that he, in his closing, said Donald Trump sanctioned tax fraud. He made him a co-conspirator. He made him an unindicted co-conspirator.”

Merchan denied that request.

Merchan plans to spend at least an hour Monday morning instructing the jury on the laws they must consider, before turning the case over to them for deliberations.

The jurors were called for service on Oct. 24, a week before the trial began. Prosecutors, attorneys and the judge whittled down a group of 130 to 12 jurors and six alternates, who were asked to promise they could set aside their biases about Trump.

Both sides reminded jurors of that promise this week, and asked them to remember it on Monday.

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