Trump Organization Tax Fraud Trial in Manhattan: Live News Updates

Early in Donald J. Trump’s presidency, his family business seemed primed for a windfall: It introduced new hotel lines, held ribbon cuttings around the world, and lured major tournaments to its golf clubs, enough for Eric Trump, who ran the company during his Dad was in the White House to remark, “The stars have all aligned.”

Five years later, those stars have faded. The former president’s company, which is grappling with legal and political scrutiny, has halted its expansion to focus on its existing properties. It even sold the Trump Hotel in Washington, once the center of the MAGA universe.

This week will bring home that stark reversal of fortunes as the company faces a highly public reckoning: a criminal trial in Manhattan where prosecutors will charge it with tax fraud and other crimes.

Although Mr. Trump himself has not been indicted, he is synonymous with the company he ran for decades, a company that bears his name and served as the launch pad for his presidency.

The Supreme Court trial will present an embarrassing scene for the former president and bring to the fore one of several criminal investigations swirling around him.

This case revolves around special perks given by the former president’s business, the Trump Organization, which spans a universe of more than 500 companies. Last year, prosecutors charged two of those companies — Trump Corporation and Trump Payroll Corp. – Granting exceptional benefits such as rent-free housing and leased luxury vehicles to some top executives who failed to pay taxes for the perks.

As jury selection begins Monday, District Attorney Alvin L. Bragg appears to have the upper hand. The Trump Organization’s 75-year-old chief financial officer, Allen H. Weisselberg, recently pleaded guilty to conspiring with the two companies to carry out the plan – and agreed to testify at their trial and tip the case in favor of Mr. Bragg, a Democrat.

The prosecutors’ agreement with Allen Weisselberg (centre) put the Trump organization in a difficult position in court.Recognition…Jefferson Siegel for the New York Times

“Having the company’s chief financial officer as a key witness is every prosecutor’s dream,” said Daniel J. Horwitz, a former prosecutor in the DA’s office who is now a partner at McLaughlin and Stern, where he defends companies in white-collar crime cases.

Mr. Bragg’s tax case arose out of a broader investigation into the former President and whether he had fraudulently inflated the value of his real estate in order to obtain favorable offers from lenders and insurers. In their search for an insider to testify against the former president, prosecutors turned to Mr. Weisselberg, a staunch lieutenant who started with Mr. Trump’s father half a century ago and served as the company’s financial gatekeeper for decades. When he resisted their print campaign, the office sued Mr. Weisselberg and the two companies for the perks.

During the trial, which is expected to last more than a month, attorneys for the Trump corporations will say Mr. Weisselberg acted behind the Trump family’s back to avoid paying taxes on the perks and did not associate with the company has conspired.

“Weisselberg’s actions were for his benefit and not the company’s benefit, and we expect to prove this at trial and be acquitted,” said one of the company’s attorneys, Susan R. Necheles. (While prosecutors could argue that the system saved money for the company, which didn’t pay payroll taxes on the perks, the defense is expected to argue that the company did in fact lose money from the arrangement.)

Lawyers could also argue that Mr. Weisselberg agreed to testify under duress, noting that he could have faced years in prison. The pleading is that he will serve five months in prison, but if he behaves well he will likely only serve 100 days.

However, should he lie on the witness stand, the judge overseeing the case could face up to 15 years in prison, according to his attorney Nicholas A. Gravante Jr., a partner at Cadwalader, Wickersham & Taft, who said his client met with both prosecutors and the company’s attorneys “to ensure his testimony goes smoothly.”

Mr. Weisselberg, who is on paid leave from the company, has still refused to cooperate in the broader investigation into the former president.

Mr. Trump, who has not been accused of involvement in the benefit scheme, has chalked up case a “Witch Hunt” against him, echoing the refrain he uses to turn legal troubles into a rallying cry for his political base.

And for his family business, a conviction would hardly be a deathblow.

A company, of course, cannot be jailed, and Mr Trump’s companies are not publicly traded, so there will be no run on the company if the jury convicts. The possible penalties are also relatively small: the two Trump companies are going to court, Those who employ and pay the former president’s top executives face fines of up to about $1.7 million, a rounding error for Mr. Trump, who typically generated hundreds of millions of dollars in revenue during his presidency .

While a guilty verdict may deter some potential lenders and business partners, the former president’s deal has endured years of scrutiny by prosecutors and lawmakers. It also recovered from the pandemic and recently raised hundreds of millions of dollars from the sale of the Washington hotel, which along with other deals allowed it to refinance or pay down a significant portion of its debt.

But with its owner distracted by his political activities — and a drum roll of investigations — the company appears to be staying put, tending to properties it’s owned for years, including office and apartment buildings in New York, a handful hotels and 16 golf courses it owns or manages. Though the company won’t remain neutral forever, a conviction could further hamper its growth.

The stakes are high for Mr. Bragg, too. The process is the most high-profile process of his young term in office. And while a conviction may help endear him to his liberal Manhattan base, the trial will also serve as a daily reminder that he has not secured the greater prize in this investigation: an indictment against Mr. Trump.

For Alvin Bragg, the Manhattan District Attorney, a conviction could ease the criticism he received after his office failed to indict the former president earlier this year. Recognition…Sarah Blesener for the New York Times

Shortly after Mr Bragg took office in January, he balked at charging Mr Trump in the broader probe into how he valued his wealth in financial statements. Mr. Bragg’s decision, which halted ongoing evidence before a grand jury, prompted the resignations of two senior prosecutors and fueled public outrage, even among some supporters of the new district attorney.

As Mr Bragg’s investigation faded from public view, New York Attorney General Letitia James stepped up her own civil investigation into Mr Trump’s financial reports, recently filing a lawsuit accusing him, his children and his company of fraud “smuggled in” as they “grossly inflated” his fortune. The lawsuit aims to prevent the former president, as well as his children Donald Jr., Eric and Ivanka, from ever running a business in the state again.

Attorneys from Ms James’ office are also attending Mr Bragg’s trial and criminal investigation, which the district attorney recently described as “active and ongoing”.

It’s one of several investigations emerging into Mr. Trump, whose final days in office have come under widespread scrutiny. In August, the FBI raided his Florida compound for sensitive documents he took from the White House, while prosecutors in Washington and Georgia are investigating whether he unlawfully interfered with the 2020 election results.

The turbulent time after the election also caused headaches for his company. After the attack on the US Capitol on January 6, 2021, banks and insurers fled.

It was a far cry from before his presidency, which saw the company expand for years. It opened five-star hotels in Chicago and Las Vegas and used some of Mr. Trump’s newfound fortunes from The Apprentice to conquer golf courses. He also used his rising fame to license his name on properties that other companies were developing.

Growth continued through the end of the 2016 presidential campaign, when Mr. Trump opened his Washington hotel, which soon became a magnet for Republican lobbyists and lawmakers.

But two years into Mr Trump’s presidency, the company withdrew. Two proposed hotel brands were discontinued, and within a year, the Trump name was popping up on hotels in Panama, Toronto, and Lower Manhattan.

They blamed self-imposed ethical restrictions, including swearing off new foreign developments, and investigations by Congress and law enforcement.

The Manhattan investigation began in earnest in the summer of 2019 when then-district attorney Cyrus R. Vance Jr. subpoenaed Mr Trump’s accounting firm for his tax returns, sparking a fight that reached the Supreme Court and resulted in a victory for prosecutors in early 2021 .

Later that year, prosecutors charged Mr. Weisselberg with approximately $1.76 million in undisclosed compensation from the benefits — including rent for his Upper West Side apartment, leased Mercedes-Benz vehicles and private school tuition for his grandchildren — stolen and evaded almost a million dollars in taxes . Together, he and the company faced charges of fraud, conspiracy, tax evasion and falsifying business records.

Given his rank, Mr. Weisselberg is known as a senior official of a company – an employee whose behavior generally reflects the behavior of the company. Under New York law, if someone like Mr. Weisselberg committed a crime “in the course of his employment and on behalf of the corporation,” the Trump corporations are guilty.

While a conviction would represent a major symbolic victory for Mr Bragg, even his success is unlikely to have any serious consequences.

“It’s a reputation hit, but does that even matter to Trump and his family?” said Jason Berland, an attorney who previously worked in the prosecutor’s office. “It’s not like he’s going to jail for that. It’s almost like the Teflon Don.”

Eric Lipton contributed reporting.

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