Tax law experts see ‘strong’ case against CFO for Trump organization

Perks such as condos and cars go well beyond the level of compensating a valued employee.


National News

July 2, 2021 - 2:44 PM

Allen Weisselberg, Trump Organization CFO, leaves Manhattan Criminal Court after his arraignment in State Supreme Court on July 1, 2021. (Michael M. Santiago/Getty Images/TNS)

NEW YORK (AP) — Companies give perks to their employees all the time. Many top executives at Fortune 500 companies have access to a corporate jet for personal use, a company apartment, or an expense account for fancy meals. Even lower-level employees regularly get access to perks like tuition reimbursement or cash to join a gym.

The indictment alleges that this wasn’t just a matter of Weisselberg failing to report his pay properly. It says the Trump Organization, as a company, was complicit.

But the extravagant perks prosecutors say the Trump Organization lavished onto its CFO Allen Weisselberg — apartments, cars, cash for holiday tips, tuition for his grandchildren to name a few — are well beyond the level of compensating a valued employee, some tax law experts said.

And the case against Weisselberg appears to be much stronger than was originally expected by those watching the progress of the Manhattan District Attorney’s investigation of the Trump Organization, its employees, and its namesake leader.

“This is an overwhelmingly strong case,” said Daniel Hemel, a law professor at the University of Chicago.

According to the indictment unsealed Thursday, Weisselberg cheated tax authorities by taking a hefty chunk of his annual compensation in fringe benefits. They say that over 15 years these off-the-books perks were worth nearly $1.8 million.

Weisselberg alone was accused of defrauding the federal government, state and city out of more than $900,000 in unpaid taxes and undeserved refunds. He is pleading not guilty.

“Mr. Weisselberg intends to plead not guilty and he will fight these charges in court,” Weisselberg’s lawyers, Mary Mulligan and Bryan Skarlatos, said in a statement.

Trump Organization finance chief Allen Weisselberg appears in a New York court after turning himself in to authorities on July 1, 2021 in New York City. (Seth Wenig-Pool/Getty Images/TNS)

Meanwhile, former President Trump and his allies have tried to frame the indictment against Weisselberg and the Trump Organization as a “witch hunt” by Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James, both Democrats. They have said the perks involved were standard for successful American companies.

But the case against Weisselberg is not necessary unusual. Some compared the indictment to a tax fraud case involving another real estate tycoon from 30 years ago: Leona Helmsley, the so-called “Queen of Mean” who tried to get her real estate empire to pay for a $3 million home renovation in the 1980s.

The dollar figures and the charges are more serious than what we had thought. … In particular, the tax loss alleged is $900,000. That is a fraud amount that is definitely in the jail range for typical cases of that magnitude.Daniel R. Alonso, former chief assistant district attorney, Manhattan District Attorney’s Office

Trump himself called Helmsley a “disgrace to humanity” for fraudulently avoiding taxes all those years ago.

“The dollar figures and the charges are more serious than what we had thought over the last few days with the little information we had,” said Daniel R. Alonso, a former chief assistant district attorney in the Manhattan District Attorney’s Office. “In particular, the tax loss alleged is $900,000. That is a fraud amount that is definitely in the jail range for typical cases of that magnitude.”

Melissa Jampol, who as a former assistant district attorney in Manhattan specialized in prosecuting white-collar crimes, said the indictment’s allegations stretched far beyond the allegations of fringe benefit abuse that some had presumed would be the crux of the case.

“I think the major takeaway is that there’s a lot more going on here that’s alleged in the indictment than people were aware of previously,” said Jampol, an attorney at the law firm of Epstein Becker Green.