Prosecutor Names, Blames, Shames Trump for Company’s Kickback Scheme
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When the criminal trial against several of Donald Trump’s companies started in earnest Monday, prosecutor Susan Hoffinger closely linked him to an alleged illegal compensation scheme that illicitly lined the pockets of his longtime moneyman Allen Weisselberg and other top execs. The defense, of course, painted Trump in a different light — even comparing the family’s forgiveness of Weisselberg to a story from the Bible.
From 2005 to 2017, “when most of the criminal conduct occurred,” these companies were “owned by Donald Trump,” Hoffinger said in her opening statements. And after Trump became president in 2017, these companies “were still effectively owned by Donald Trump through a trust called the Donald J. Trump revocable Trust.”
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“The evidence will show that when Donald Trump was elected president at the end of 2016, these companies finally had to clean up these fraudulent tax practices,” Hoffinger also said in her opening statement. “There was concern about extra scrutiny of these companies because of Donald Trump’s election.”
The trial stems from the 2021 indictment of several Trump companies, including The Trump Organization, for an alleged 15-year-long tax fraud scheme. The alleged financial misconduct involved untaxed benefits to Weisselberg in a “sweeping and audacious illegal payments scheme,” according to the prosecution.
Prosecutors said that Weisselberg reaped many a benefit for his loyalty to the Trumps, for whom he worked for about 50 years. Starting in 2005, Weisselberg lived gratis in an apartment on Manhattan’s West Side. The Trump Corporation, which held the lease on this apartment, covered Weisselberg’s rent on the home, in addition to his utility bills and parking garage fees, the indictment claimed.
The perks extended to other personal expenses. Trump’s company allegedly covered the leases on two Mercedes Benzes that Weisselberg and his wife used as their personal cars. Trump’s companies also gifted cash to Weisselberg around Christmas, so the exec could give out “personal holiday gratuities,” according to prosecutors’ past statements.
Trump’s business also paid expenses related to Weisselberg’s “homes and for an apartment maintained by one of his children,” such as “new beds, flat-screen televisions, the installation of carpeting, and furniture for Weisselberg’s home in Florida,” prosecutors previously said.
The jury also heard about Trump’s role in the alleged fraud. Prosecutors have said The Trump Corporation also footed the bill for private school tuition for Weisselberg’s grandkids. Hoffinger said during her opening that Trump paid said tuition “personally.”
Amid concerns of extra scrutiny following the 2016 election, Trump stopped paying tuition for Weisselberg’s grandkids. “You’ll also hear that around the time of this so-called cleanup, Allen Weisselberg directed the company’s accounts payable supervisor to remove all notations with his name to all entries she had made to Donald Trump’s…ledger,” Hoffinger also said.
“Allen Weisselberg no longer wanted his fingerprints” on anything showing that Trump paid questionable perks, she also claimed.
“Except for Donald Trump,” nobody had greater financial authority at Trump’s companies than Weisselberg did. Post-election, when company assets were transferred to the trust, Weisselberg was appointed trustee—with the only other trustee being Donald Trump Jr, Hoffinger said.
Hoffinger told the jury of eight men and four women that some of the evidence in this case would include Trump’s “personal general ledgers,” kept by a company accountant. Other evidence will include checks signed by Trump to pay the private school tuition.
Receiving enviable benefits isn’t against the law, of course, but prosecutors maintained that Weisselberg didn’t declare them on his taxes. This, in turn, meant he kept $1.7 million in illicit payments.
In August, Weisselberg pleaded guilty to a 15-count indictment related to these illegal payouts. Weisselberg answered “yes, your honor” when judge Juan Merchan asked him whether he “engaged in a scheme” with the Trump Organization “to defraud federal, New York state, and New York City tax authorities.”
Weisselberg’s shocking admission appeared to directly implicate Trump’s companies in criminal activity, including tax fraud and falsifying business records. It also spells potential trouble for Trump’s companies, as he is poised to be the prosecution’s star witness.
Under Weisselberg’s plea deal, he “must testify truthfully” if called at trial. He also must pay almost $2 million in unpaid taxes.
If Weisselberg holds up his end of the deal, his sentence under the plea agreement is five months in jail followed by five years probation. But if Weisselberg breaks his agreement, Merchan warned, he could get hit with a far harsher sentence.
Indeed, Weisselberg’s plea agreement includes a provision that he won’t be sentenced until after the Trump Organization trial wraps, “to ensure compliance” with the testimony requirement.
Although Weisselberg’s guilty plea seemed to directly place Trump’s businesses at the center of criminal activity, they have maintained their not guilty pleas. The trial is a gamble for everyone involved.
If a jury sides with the prosecution, Trump’s companies could see potentially ruinous fines and penalties. But, attorneys for the Trump companies can use the trial to cross-examine Weisselberg—and directly ask whether Trump was involved in his fraud. This gives Weisselberg an opening to deny Trump’s involvement in criminal wrongdoing.
Trump’s camp has previously painted the proceedings as a politically driven witch hunt against the former president.
“Allen Weisselberg, a long time, trusted employee of The Trump Organization, is a fine and honorable man who, for the past 4 years, has been harassed, persecuted and threatened by law enforcement, particularly the Manhattan District Attorney, in their never ending, politically motivated quest to get President Trump. In the history of our country, no prosecutor has ever brought a criminal case against a person for failing to report a company car, a company apartment or so-called ‘fringe benefits’,” a rep for the Trump Organization said after Weisselberg’s plea. “
“Yet, the Manhattan D.A. not only seized upon this opportunity, but went so far as to threaten Mr. Weisselberg’s children (who have done nothing wrong) in an attempt to pressure Mr. Weisselberg to say bad things or make up lies about President Trump. Mr. Weisselberg, who just turned 75, in an effort to put this matter behind him and get on with his life, decided that the best course of action—for himself and his family—was to plead guilty.”
The spokesperson also said Trump’s companies wouldn’t take a plea “for the simple reason that they have done nothing wrong” and that they “now look forward to having our day in court.”
The unwavering support expressed in the past didn’t quite wane during today’s proceeding, but came with caveats. The buck stopped at Weisselberg who, as one lawyer argued, hurt Trump’s feelings.
When Trump Corporation attorney Susan Necheles presented her opening this morning, she laid all the blame on Weisselberg—albeit with a dose of sympathy. Weisselberg was “paraded in front of cameras in handcuffs” upon his arrest, and realized that he didn’t just face “public humiliation,” but a potentially lengthy jail sentence as well.
“This was a man who had a beautiful life, he was a chief financial officer of a prestigious company, at his peak he made over $1 million a year and lived very well…Allen Weisselberg had everything a man could want,” Necheles continued. “But once he was arrested, he realized he was in danger of losing all of that and being sentenced to jail for years.”
The crime, Necheles argued, “started with Allen Weisselberg and it ended with Allen Weisselberg.” Trump’s companies aren’t accused of accounting acrobatics with their own corporate taxes, she said.
As for trying to hide any financial wrongdoing, Necheles hit back at Hoffinger’s characterization of a “clean up.”
“It was Allen Weisselberg who wanted to clean things up. Allen Weisselberg knew that he had been cheating on his personal taxes and all of a sudden the Trump Organization was going to get a lot of scrutiny,” Necheles said, adding shortly thereafter. “Donald Trump did not know that Allen Weisselberg was cheating on Allen Weisselberg’s personal tax return[s].”
Michael Thomas van der Veen, an attorney for Trump Payroll Corporation, went further in his opening—almost casting Trump and his family as victims of Weisselberg’s deception. “This case is about individual personal greed and the abuse of trust necessary to feed that greed,” Van der Veen said. “Allen Weisselberg is a man who has fallen to his greed.”
“Greed, greed made him cheat on his taxes,” he said, raising his voice when he repeated the word ‘greed.’” Avarice made Weisselberg “hide his deeds from his employer and betray a trust built over nearly 50 years.”
Nobody was trusted more than Weisselberg, Van der Veen said. Despite this, the Trumps have treated him with grace. “He was trusted and although he has breached that trust and committed a crime, he has not been thrown out of the company. He has not been thrown out of the family.”
After his crimes were discovered, the Trumps have acted toward him as one would toward a family member who made a “serious and criminal” mistakes. Then came scripture.
“We all know the Bible story of the [prodigal] son,” van der Veen said. “A man who put his own goals and desires ahead of his family’s and when it all falls apart, he is taken back in by that same family.”
“Forgiveness, however, comes with some restrictions,” the lawyer said of Weisselberg. “He still gets some pay, albeit not [to] the same extent, and not at the same benefits he had before.”
The first witness to testify following openings was Jeffrey McConney, senior vice president and controller for Trump Corporation, whom prosecutors claim helped Weisselberg in the tax fraud scheme.
McConney’s testimony hinted at roadblocks for the prosecution down the road. Not only is McConney still employed by Trump Corporation — whom he’s testifying against — but the company is footing his legal bills.
Other prospective witnesses also remain in Trump’s oft-lucrative financial web. In other words, prosecutors’ case might hinge on people who would be willing to abandon their loyalty to Trumpworld and kill their golden goose on the stand.
“So the defendant is paying your lawyer?” asked prosecutor Joshua Steinglass.
“Yes, sir,” said McConney, who was seized by coughing spells at various points during his testimony. McConney, with a white walrus-like mustache and deep New York brogue, said that he was Weisselberg’s subordinate from the time he started with Trump’s company some three decades ago.
They became friends. “We had lunch everyday, so I would see him everyday at lunch.” They’d been to their sons’ respective bar mitzvahs and attended funerals together.
Steinglass tried to double down on McConney’s ongoing ties — and fealty to Trump. Had he ever met Necheles? When McConney answered in the affirmative, Steinglass asked him when was the last time.
“Sunday,” McConney said. Did Necheles go over the questions prosecutors might ask? That she might ask on cross? Did she tell McConney to not phrase anything in a particular way?
Steinglass asked Merchan to treat McConney like an “adverse” witness—also known as a “hostile witness. This designation allows attorneys to cross-examine their own witnesses if they’re being particularly ornery and testifying against the side that called them.
“He has met with the defendants while refusing to meet with us,” Steinglass said to Merchan, outside the jury’s presence. “He didn’t even answer the question about what [a] CPA is. His attorney is in fact paid by the Trump corporation. I think that is pretty much the textbook difference of adverse.”
Necheles objected to this request, and noted that McConney—now testifying with immunity — had previously been threatened by the past prosecutor on this case. A then-prosecutor who had been on this case, Necheles said, threatened McConney with a perjury rap.
Merchan didn’t grant Steinglass’s request, saying the prosecutor’s questions were leading; that is, intending to produce a certain answer. “I haven’t had an opportunity to see [the] witness refuse to answer a question,” Merchan said.
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