Trump Organization CFO Allen Weisselberg surrenders to authorities

File photo: Trump Organization chief financial officer Allen Weisselberg. (REUTERS)
File photo: Trump Organization chief financial officer Allen Weisselberg. (REUTERS)

Summary

  • Former President Donald Trump’s company and top accountant are set to face tax-related charges in New York

The Trump Organization’s finance chief Allen Weisselberg surrendered to New York prosecutors Thursday morning as he and the company’s lawyers prepared to face the first criminal charges stemming from a multiyear investigation into former President Donald Trump’s business affairs.

Mr. Weisselberg voluntarily turned himself in at 6:15 a.m. ET Thursday, his lawyer said. The district attorney’s office filed an indictment Wednesday against the Trump Organization and Mr. Weisselberg on charges that will be made public Thursday afternoon, The Wall Street Journal has reported.

The defendants are expected to be arraigned on allegations that the company and Mr. Weisselberg, the company’s chief financial officer, illegally evaded taxes on fringe benefits, the Journal has reported. Prosecutors’ investigation has included perks such as car leases, Manhattan apartments and private-school tuition, the Journal has reported.

Mr. Weisselberg and the Trump Organization, represented by its lawyers, are expected to plead not guilty, as is typical in most arraignments. The judge is unlikely to set bail, since New York law mandates that most defendants be released without conditions except when accused of certain violent crimes.

The charges stem from an investigation by the office of Manhattan District Attorney Cyrus Vance Jr., which has been working with New York State Attorney General Letitia James on the probe.

Mr. Trump has accused the prosecutors, both Democrats, of being politically motivated. Earlier this week, he said the case comprises “things that are standard practice throughout the U.S. business community, and in no way a crime." Mr. Trump isn’t expected to face charges at this time, his lawyer has said.

The Trump Organization in a statement Thursday called Mr. Weisselberg a “loving and devoted husband, father and grandfather" and accused the district attorney of using him “as a pawn in a scorched-earth attempt to harm the former president."

“The district attorney is bringing a criminal prosecution involving employee benefits that neither the IRS nor any other district attorney would ever think of bringing," a company spokeswoman said. “This is not justice; this is politics."

Lawyers for Mr. Weisselberg said he intends to plead not guilty and fight the charges in court.

The charges are the culmination of prosecutors’ efforts to pressure Mr. Weisselberg into cooperating with their investigation, the Journal has reported. He has so far declined to cooperate, but some defendants do change course when faced with the possibility of prison time, former prosecutors said.

“Everyone has different levels of tolerance for potential consequences," said Sean Hecker, a white-collar defense attorney and partner at Kaplan Hecker & Fink LLP.

A case solely focused on fringe benefits would be unusual, former prosecutors said. Charging an individual or company for failure to pay taxes on employee benefits alone is rare, though such charges are used as part of larger cases.

The charges expected Thursday could usher charges in the future, particularly if prosecutors are able to gain Mr. Weisselberg’s cooperation to bolster the broader investigation, former prosecutors said.

Prosecutors are also seeking the cooperation of Matthew Calamari, Mr. Trump’s former bodyguard turned chief operating officer, according to people familiar with the matter. Investigators have examined whether Mr. Calamari received perks such as cars or an apartment from the Trump Organization as part of an effort to evade paying taxes. Nicholas Gravante, a lawyer for Mr. Calamari, said he didn’t expect his client to be charged at this time.

Prosecutors are expected to continue pursuing their broader investigation into potential bank, insurance and tax fraud at the Trump Organization. They have subpoenaed Mr. Trump’s lenders, an insurance broker and New York towns and secured the former president’s tax returns after a legal battle that went to the U.S. Supreme Court twice.

Finance chiefs like Mr. Weisselberg face broad liability under civil and criminal laws and can be held liable for actions taken by both their superiors and employees who work below them in accounting or operational roles, even if they had no direct knowledge of wrongdoing, according to Nick Morgan, a partner at Paul Hastings LLP who has previously defended CFOs.

“It’s an amazing amount of potential exposure depending on the size of the company," Mr. Morgan said of CFO’s liabilities.


This story has been published from a wire agency feed without modifications to the text

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
more

MINT SPECIALS

Switch to the Mint app for fast and personalized news - Get App