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Former CFO links Trump to illegal tax scheme

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(NewsNation) — Former Trump organization Chief Financial Officer Allen Weisselberg linked former President Donald Trump to illegal tax practices during his testimony in a Manhattan court.

Weisselberg pled guilty to 17 felonies and is testifying in a criminal tax fraud case being brought against the Trump Organization. His testimony is part of the deal he made to avoid a long prison sentence. If he testifies truthfully, he is expected be sentenced to five months in prison and could serve as few as 100 days.

Weisselberg is still on the Trump Organization’s payroll with a $640,000 salary despite no longer holding the CFO title.

Weisselberg said he conspired with a subordinate to hide more than a decade’s worth of extras from his taxable income, but that neither Trump nor his family were involved in the scheme.

In his second day of testimony, Weisselberg said the practice of using 1099 forms to pay executive bonuses began before he took on the role in 1986. Using the 1099 form instead of W-2s allowed the company to avoid paying taxes on bonuses and meant executives didn’t have any of the money withheld by the IRS.

He said the practice stopped in 2017, around the time Trump took office.

Weisselberg also said Trump or his sons liked to sign bonus checks handed out to key employees at Christmas.

He also testified that Trump, or sometimes Trump Jr. or Eric Trump, wrote him a check for his grandchildren’s private school tuition, totaling about $100,000, an amount which was later deducted from his salary, lowering his tax burden.

Weisselberg also received other fringe benefits including rent, car leases and personal expenses. Those were deducted from his salary as well. He is accused of using such practices to avoid paying $2 million in taxes.

Had the Trump organization paid out these types of benefits using a W-2, they would have needed to pay him twice as much to account for taxes, Weisselberg testified.

He said other executives had similar arrangements, but the practice stopped after an internal review as done when Trump was elected.

When the company stopped paying benefits like rent, Weisselberg asked for a $200,000 raise.

Two entities associated with the Trump Organization, the Trump Corporation and the Trump Payroll Corporation, are facing nine counts of tax fraud, grand larceny and falsifying business reports.

Prosecutors must prove that Weisselberg was improperly directed by a high-ranking executive and was acting on behalf of the company to make their case.

The Trump Organization denies wrongdoing. The company could be fined more than $1 million if convicted, but a guilty verdict could also hamper the company’s ability to get loans and make deals and lead to attempts by governments, such as New York City, to cancel contracts with Trump entities.

In court, the company’s lawyers have portrayed Weisselberg as a loyal lieutenant who went rogue and concocted the tax dodge scheme on his own without Trump or the Trump family’s knowledge.

Trump is not being individually charged in the case.

The Associated Press contributed to this report.


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