Trump org. Manager says he helped colleagues dodge taxes

NEW YORK — One of Donald Trump’s top moneymen admitted Thursday that he broke the law to help other Trump Organization executives avoid taxes on company-paid housing and other perks, including by preparing misleading tax returns and failure to report benefits to tax authorities.

Jeffrey McConney, senior vice president and controller, testified in the company’s criminal tax lawsuit that he filed false tax returns on behalf of a father-son executive duo whose Manhattan apartment rents were being paid for by the Trump Organization.

McConney, who was granted immunity to testify as a prosecution witness, also testified that a few years before Trump’s presidency, the company’s accountant raised concerns about the way it paid out vacation pay — an issue that consumed hours of trial testimony took.

According to McConney, the accountant warned that the Trump Organization’s dubious and since-defunct practice of splitting bonus payments between an executive’s salary and one-off payments from subsidiary independent contractors could jeopardize the legal license of one such executive: their top attorney.

The Trump Organization, the company through which Trump owns hotels, golf courses and other assets, is accused of helping some top executives avoid income taxes on compensation they receive on top of their salaries.

The company, which could be fined more than $1 million if convicted, has denied wrongdoing. His lawyers allege that another executive — longtime CFO Allen Weisselberg — went rogue, hatched the plan without Trump or the Trump family’s knowledge, and lied to the company about his actions.

Trump Organization attorney Susan Necheles kept the jury’s attention on Weisselberg when she cross-examined McConney Thursday afternoon and showed emails suggesting McConney had to seek permission from Weisselberg to perform even simple tasks , like approving a $100 issue or writing a few sentences to describe the ice rinks the company managed in Central Park.

McConney said that Weisselberg, his longtime boss, has a lot of latitude over the company’s operations and even quoted him as saying Trump hired him to essentially run the company. Weisselberg has pleaded guilty to accepting $1.7 million in damages and has agreed to possibly testify as a prosecution witness next week in exchange for a five-month jail sentence.

The Trump Organization trial resumed Thursday after an eight-day delay while McConney and Judge Juan Manuel Merchan recovered from COVID-19. The trial was abruptly halted on November 1, just the second day of testimony, when McConney tested positive for the virus during a lunch break.

Merchan wore a blue surgical mask on the bench. About half of the jurors also wore masks. McConney, who coughed occasionally during his testimony last week, didn’t do it nearly as often on Thursday and said he was feeling “a lot better”.

McConney, who said he prepares taxes for a handful of clients on the side, told jurors he ticked “no” questions on state tax forms asking if Chief Operating Officer Matthew Calamari Sr. had living quarters in New York City retained, even though he knew he had, so both can avoid paying city payroll taxes

McConney said he did the same with Matthew Calamari Jr.’s tax forms and didn’t file any amended tax returns when he learned he, too, was living in a company-funded apartment in the Big Apple.

“Have you been intentionally trying to help people dodge their income taxes?” prosecutor Joshua Steinglass asked.

“Dodge is a very strong word,” McConney replied. “I’ve tried to help them in any way I can with some suggestions.”

The Trump Organization also paid for Weisselberg’s Manhattan apartment, Mercedes-Benz cars for him and his wife, furnishings, and utilities. Trump personally paid the school fees for his grandchildren.

McConney testified on his third day on the witness stand that he deducted the cost of some executives’ perks from their salaries and further reduced their tax liability. Trump has approved the pay cuts. Prosecutors showed a 2012 memo noting such an agreement for Calamari Sr., which bore the former president’s initial — a D resembling a treble clef — and the handwritten notation “OK.”

A message was left with a Calamaris attorney for comment.

Picking up where he left off before the COVID shutdown, McConney testified that the Trump Organization changed some payroll practices and financial arrangements after hiring a Washington attorney to review its tax practices following Trump’s election in 2016 check. Steinglass called the changes a “cleanup.”

But McConney testified that the company was warned years earlier by its own accountant, Donald Bender, that its decades-old way of handing out vacation pay saves money on taxes by paying full-time employees as freelancers and potentially posting the payout as an expense — could jeopardize then-General Counsel Jason Greenblatt’s ability to practice law.

“It had something to do with losing his legal license,” McConney testified.

In 2015, after Bender spoke up, Greenblatt’s bonus was paid in full as salary.

Greenblatt, who served as the president’s assistant and Trump’s special envoy for Middle East negotiations from 2017 to 2019, left a message asking for comment.

McConney tried to justify the split-pay arrangement by saying the company would split its bonuses based on the work an executive had done for that company, such as Trump’s Mar-a-Lago estate in Florida. However, he later acknowledged that such work is part of the normal duties of a CFO like Weisselberg.

When asked why the company didn’t do away with the bonus payment system altogether after Bender said it could cost Greenblatt his career, McConney said, “He tells me to stop one and not the other, it’s not me once came to mind. … If Donald Bender had had a reason to tell us to stop, we would have stopped.”

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Follow Michael Sisak on Twitter at twitter.com/mikesisak. Submit confidential tips by visiting https://www.ap.org/tips/.



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