Allen Weisselberg, the Trump Organization’s longstanding chief financial officer, surrendered to authorities early Thursday ahead of a scheduled court appearance on the first criminal indictment in a two-year probe of Donald Trump’s business activities.
At roughly 6:20 a.m., Weisselberg was photographed with his lawyer entering the structure that houses criminal courts and the Manhattan district attorney’s office.
On Thursday, New York authorities were poised to issue an indictment accusing Weisselberg and Trump’s namesake company of tax fraud involving employee fringe benefits.
Prosecutors may use the case against Weisselberg, a close sidekick of Trump and his real estate developer father, Fred, to prod the CEO into cooperating and telling them what he knows about Trump’s financial practices.
Weisselberg’s attorneys, Mary Mulligan and Bryan Skarlatos, stated in a statement that he “intends to plead not guilty and will fight these charges in court.”
The Trump Organization issued a statement supporting Weisselberg, saying the 48-year employee is being exploited as a “pawn in a scorched-earth attempt to harm the former president” by the Manhattan district attorney’s office. According to the report, neither the IRS nor any other district attorney would consider filing such charges over employee benefits.
The company stated, “This is not justice; this is politics.”
According to two people familiar with the situation, the allegations against the Trump Organization and Weisselberg were announced ahead of an afternoon arraignment at a state court in Manhattan.
The sources spoke on the condition of anonymity because they were not authorized to speak about an ongoing investigation.
At this point in the investigation, led by Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James, there was no indication that Trump would be charged.
During his visit to Texas on Wednesday, Trump did not respond to reporters’ shouted questions about the New York case, but earlier in the week, the Republican had blasted the New York prosecutors as “rude, nasty, and totally biased,” and said his company’s actions were “standard practice throughout the United States business community and in no way a crime.”
According to persons acquainted with the situation, the intended costs are tied to advantages provided by the corporation to top employees, such as usage of residences, automobiles, and school tuition.
Vance, who is set to leave the office at the end of the year, has been investigating a wide range of Trump and the Trump Organization issues.
His office has looked into hush-money payments made to women on Trump’s behalf, as well as the accuracy of the company’s property appraisals and tax assessments.
Vance has been subpoenaing papers and interrogating company executives and other Trump associates as part of a long effort to obtain Trump’s tax returns.
After her office discovered evidence of suspected criminal activity while conducting a separate civil investigation of Trump, James assigned two lawyers from her office to collaborate with Vance’s team.
Weisselberg, 73, had come under fire in part because of questions regarding his son’s free or low-cost usage of a Trump apartment.
In a 2018 divorce deposition, Barry Weisselberg oversaw a Trump-operated ice rink in Central Park said that Trump’s Parc East condo was a “corporate apartment, so we didn’t have rent.”
Jen Weisselberg, Barry’s ex-wife, has been cooperative with both investigations and has provided investigators with reams of tax records and other documentation.
The Trump Organization is the commercial company through which the former president administers his numerous entrepreneurial endeavors, such as his interests in office skyscrapers, hotels, golf courses, and his numerous marketing deals and television endeavors. Since Trump became president, his sons Donald Jr. and Eric have been in charge of the company’s day-to-day operations.
Although Trump isn’t likely to face charges on Thursday, allegations against the corporation that bears his name raise questions about his knowledge of — or involvement in — improper business practices.
According to James Repetti, a tax lawyer and professor at Boston College Law School, a corporation like the Trump Organization would be required to withhold taxes not only on income but also on other types of remuneration, such as the use of an apartment or automobile.
Providing an apartment for the convenience of an employee who is required to be at the office or worksite at odd or frequent hours, or allowing the use of a car for business purposes, are examples of perks that would not be considered taxable income if they were required as a condition of employment, according to Repetti.
Leona Helmsley, another renowned New York City real estate player, was convicted of tax fraud in a federal lawsuit stemming from her company paying to refurbish her home without her reporting the money as income.
The Trump Organization is suspected of breaking New York state tax regulations.
“The IRS routinely looks for abuse of fringe benefits when auditing closely-held businesses,” Repetti said. “The temptation for the business is that it claims a tax deduction for the expense, while the recipient does not report it in income.”