Trump Organization charged with tax fraud, CFO Allen Weisselberg also charged with grand larceny

Criminal charges unsealed Thursday against the Trump Organization and its chief financial officer, Allen Weisselberg, detailed an alleged tax evasion conspiracy spanning more than a decade, representing the most serious threat yet to the Trump family real estate enterprise long managed by Donald Trump.

The Trump Organization and Weisselberg were charged in a 15-count indictment alleging criminal tax fraud, conspiracy and falsifying business records.

Weisselberg, the CFO who was walked to the courtroom in handcuffs, was also charged with grand larceny in connection with failing to pay taxes on $1.7 million in fringe benefits from the company.

"Mr. Weisselberg intends to fight these charges in court," attorney Bryan Skarlatos said in a written statement Thursday. Weisselberg, who pleaded not guilty, was released on his own recognizance.

TRUMP ORG CHARGED: Donald Trump's peril falls on the legal side, not political

Grand larceny

State prosecutors alleged that the Trump Organization and Weisselberg participated in an "off the books'' compensation operation that funded luxury car leases, family members' tuition payments and apartment rent starting in 2005 and running through this year.

According to court documents, Weisselberg regularly submitted requests for payment to the corporation to fund improvements for his homes in New York and Florida, along with those of his children. The expenses included new carpeting, flat screen televisions and furniture that was never claimed as compensation for tax purposes.

"The scheme was intended to allow certain employees to substantially understate their compensation from the Trump Organization so that they could and did pay federal, state and local taxes in amounts that were significantly less than the amounts that should have been paid," according to court documents.

In all, Weisselberg avoided $556,385 in federal tax payments; $106,568 in state taxes; and $238,159 in local New York City taxes. At the same time, prosecutors allege that the longtime executive accepted $94,902 in federal tax refunds and $38,222 in state tax refunds that he was not entitled to receive.

According to court documents, the corporation maintained internal spreadsheets that tracked the direct and indirect compensation provided to Weisselberg over the years. While Weisselberg's direct compensation for years was capped at $940,000, prosecutors assert that the Trump Organization – at Weisselberg's direction – did not include the indirect payments as taxable income.

The corporation, prosecutors alleged, "falsified" the executive's compensation records.

The grand larceny charge represents the most serious threat to Weisselberg, an offense which carries a maximum punishment of five to 15 years in prison. The Trump Organization, meanwhile, faces fines of hundreds of thousands of dollars if convicted as a criminal enterprise.

Perhaps more ominous was the message sent by prosecutors who signaled that the 25-page indictment did not mark the end of their investigation.

“Today is an important marker in the ongoing criminal investigation of the Trump Organization and its CFO, Allen Weisselberg," New York Attorney General Letitia James said. "In the indictment, we allege, among other things, financial wrongdoing whereby the Trump Organization engaged in a scheme with Mr. Weisselberg to avoid paying taxes on certain compensation. This investigation will continue, and we will follow the facts and the law wherever they may lead.”

Trump, who was not charged Thursday, referred to the legal action in now-familiar flourish, calling it a "witch hunt by radical left Democrats."

"It is dividing our country like never before," Trump said in a statement.

The charges are part of a long-running inquiry headed by the Manhattan district attorney and New York's attorney general into the operations of the Trump family real estate business.

The charges come just days after Trump Organization attorneys met with local prosecutors in a failed attempt to persuade them not to proceed with their case, Trump Organization lawyer Ron Fischetti said.

Fischetti told USA TODAY last week that prosecutors had not succeeded in securing the cooperation of Weisselberg, though the new charges are likely to place additional pressure on the former Trump executive to cooperate in the continuing investigation.

Cyrus Vance, Letitia James leading investigations

For more than two years, Manhattan District Attorney Cyrus Vance has been digging deep into the operations of the Trump family business for possible fraud involving banks, insurance companies and taxing entities with a focus on whether the company manipulated property values to obtain favorable loans and reduced tax rates.

Prosecutors also have been weighing hush-money payments made to women on Trump's behalf and how that money was documented.

Last month, James announced that a parallel civil inquiry had escalated to a criminal probe and that state authorities had joined Vance's investigation.

The New York prosecutor won a major public victory in February when Trump's accounting firm was forced to turn over eight years of tax records as part of a protracted legal battle that ended at the Supreme Court.

Vance's investigation appeared to have accelerated last month with the disclosure that a special grand jury had been convened to consider possible evidence of criminality by the president, his business associates or the company itself.

Jennifer Weisselberg, Michael Cohen cooperating in Trump Organization probe

Among those cooperating in the inquiry are Jennifer Weisselberg, the former daughter-in-law of the Trump Organization executive, along with former Trump personal attorney and fixer Michael Cohen.

Duncan Levin, the attorney representing Jennifer Weisselberg, said his client has provided at least 10 boxes of information to prosecutors and has pledged to provide testimony to a grand jury or at trial, if needed.

Levin also said his client was present during conversations in which Trump discussed providing fringe benefits, including school tuition and apartment renovations, in lieu of salary for the Trump executive. Levin said Jennifer Weisselberg has provided accounts of those conversations to prosecutors.

Cohen, meanwhile, has acknowledged meeting with New York prosecutors multiple times in cooperation with their investigation.

Cohen has told USA TODAY that he would not comment on any aspect of the case, citing the ongoing investigation and his potential role in it as a key witness for the prosecution. But he has commented extensively on Twitter on how grand jury proceedings significantly accelerate the investigation.

Cohen, who pleaded guilty in 2018 to federal charges that included campaign-finance violations for paying hush money to women who claimed to have had sex with Trump and for lying to Congress, has repeatedly pointed to Weisselberg as most knowledgeable of the former president's business operations.

This article originally appeared on USA TODAY: Trump Organization, CFO Allen Weisselberg charged with tax fraud