Prosecutors described all three as evidence in a sweeping 15-count indictment alleging that Allen Weisselberg, the longtime chief financial officer of the Trump Organization, was part of a 15-year scheme to defraud tax authorities by failing to pay taxes on $1.7 million in compensation he received in the form of those benefits.
Tax lawyers and former prosecutors say the references to his family members are a not-so-subtle tactic to suggest to Weisselberg that he should cooperate with the ongoing investigation into the Trump Organization.
Based on the allegations in the indictment — including an internal spreadsheet and a crossed-out notation — the evidence appears strong against Weisselberg, and Manhattan District Attorney Cy Vance Jr has laid the groundwork for potential charges in the future, the lawyers and former prosecutors said.
“Prosecutors are not showing their entire hand yet. This is obviously designed to convince Weisselberg they have enough to put him in jail and it’s going to get worse, and he should really think about cooperating,” said Frank Agostino, a defense lawyer and former tax prosecutor.
“I think (Vance) sent a message that this is an exit ramp for Weisselberg that he should have taken already and, if he doesn’t, everything he knows and loves in this world is fair game,” Agostino said. “And I think he’s sending a message to the Trump Organization: Your people should come in and talk with us earlier rather than later if you want a business that you can leave to your children. It’s traditional, old-school hard ball, which is what New York does almost better than anybody.”
The cooperation of Weisselberg, a top executive who has worked for the Trump Organization for 48 years, could help prosecutors in the current case and other areas that are still under investigation.
Former President Donald Trump doesn’t use email and Weisselberg was a trusted ally. If Weisselberg cooperated, he could walk prosecutors through the intent behind some decisions made at the Trump Organization and Trump’s role, if any, in the alleged tax scheme or other areas. Trump was not accused of any wrongdoing.
Lawyers with Vance’s office said their investigation is ongoing. New York Attorney General Letitia James echoed those sentiments. Her office teamed up with Vance on the investigation and is also conducting a civil investigation into the Trump Organization, which, if they file a lawsuit and prevail, could result in fines against the company.
Last week, Weisselberg pleaded not guilty to the charges and his attorney said he will fight the allegations in court.
A spokeswoman for Weisselberg’s lawyer declined to comment.
The Trump Organization has vigorously denied any wrongdoing and said Vance’s office is using Weisselberg “as a pawn in a scorched earth attempt to harm the former President.” A lawyer for the company said the indictment was the result of a political vendetta. The lawyer declined to comment for this story.
A spokesman for the district attorney’s office declined to comment.
Before the indictment, prosecutors sought to ratchet up the pressure on Weisselberg to cooperate, even dangling that his son Barry, an executive at the Trump Organization who lived at Trump-owned buildings for discounted or free rent, might have exposure, one person familiar with the matter said.
No charges were brought against Barry Weisselberg, but he was obliquely referred to in the indictment. Prosecutors alleged in the indictment that “The value of the lodging provided to Weisselberg’s family member constituted income to that family member.” To charge any of Weisselberg’s family members with a crime, prosecutors would need to show that they knew they should have paid taxes on the income they received.
Barry Weisselberg said in a 2018 deposition taken as part of divorce proceedings from his now ex-wife, Jennifer, that his father paid for their children’s school tuition. Jennifer Weisselberg, who has assisted the district attorney’s investigation with testimony and documents, has told CNN she believes the tuition was paid in part by Trump and in part by Allen Weisselberg.
A lawyer for Barry Weisselberg did not respond to requests for comment.
Prosecutors have charged spouses in tax fraud cases before to try to win someone’s cooperation. Federal prosecutors charged Lea Fastow, the wife of Enron CFO Andrew Fastow, for failing to pay taxes on “gifts” that she, her husband and their children received from Enron six months after they first charged her husband. Her lawyer said at the time that “Mrs. Fastow is being charged in order to put pressure on her husband of 18 years.” Both Fastows later pleaded guilty.
Even the suggestion of charges against a family member, however, could be enough to change a resistant defendant’s mind, said Brian E. Klein, a criminal defense attorney.
“Prosecutors have a lot of tools at their disposal to try to get someone to cooperate. One tried and true method is to just charge someone and hope that will shake them up and they’ll change their mind and cooperate,” he said.
“Usually, prosecutors don’t directly threaten to charge a family member, but it’s not uncommon that that implicit threat hangs out there, is in the air. And it can’t be lost on Allen Weisselberg or his lawyers, from reading the indictment, that family members might be witnesses or come under investigation.”
The continuing investigation is digging into whether the Trump Organization manipulated the value of some of its properties to obtain loans, insurance or tax benefits, people familiar with the matter said.
Investigators are also looking into fees paid to consultants, including TTT Consulting, an entity controlled by Trump’s three grown children — Donald Trump Jr., Ivanka Trump and Eric Trump — and whether appropriate taxes were paid on the income, the people said.
A lawyer for the Trump Organization has previously said everything was done in compliance with the law and under the advice of counsel and tax experts. He also said all taxes were paid and no party received any undue benefit.
A test of loyalty
Pressure has been mounting on Weisselberg for months as prosecutors interviewed Jennifer Weisselberg and have gone through boxes of financial records she provided them and have brought the Trump Organization controller Jeffrey McConney before the grand jury and questioned him about compensation.
To date, Trump and Weisselberg have been aligned, and Weisselberg refused to cooperate before being charged despite pressure from prosecutors to do so. In an interview the day the indictment was unsealed, Trump told The New York Times, “I’m with him all the way.”
Weisselberg’s cooperation could help prosecutors examining other areas. It could also make him an invaluable and credible witness for the government, noted Agostino, who said it was a smart move to charge the company now rather than wait to see if the other investigative areas lead to charges.
“By making him a beneficiary and a dispenser of the illegal loot they put him in as a co-conspirator. If they have him doing it by himself, he’s not as good as a witness if they’re all serving the master,” Agostino said.
With no email trail, authorities would need someone to explain what role, if any, Trump had in the decisions about compensation and taxes.
“We don’t know what they have on Trump. I’m pretty sure Allen Weisselberg didn’t dream this up and start paying off his own personal expenses without Trump knowing about it,” said Eric Green, an attorney who represents clients before the Internal Revenue Service and Justice Department.
Green called the alleged scheme “so blatant.”
“I don’t see how Weisselberg has any legitimate defense,” he said, adding, “Whether he can flip on Trump and give them anything … we don’t know.”
One unknown factor, said Adam S. Kaufmann, a former Manhattan assistant district attorney, is simply the mental toll that being a criminal defendant takes, especially for someone likely at the end of their career, like Weisselberg.
“There’s a difference, psychologically, between saying you’re never going to cooperate and finding yourself being charged with the crime. Part of it is, ‘Oh, my God, I might go to jail.’ But part of it is, this just takes over your life and it just gnaws at you,” he said.
“Clients call me at night, they text me at 1 in the morning. And I just wonder, why not make a deal, spend the next couple of years cooperating with the DA and play with your grandkids?”