WASHINGTON — Manhattan prosecutors accused the Trump Organization of evading taxes on executive compensation for years as they unveiled the first criminal charges Thursday from their investigation into former President Donald Trump’s company.
The company is charged with scheming to defraud and with criminal tax fraud. Allen Weisselberg, Trump’s longtime accountant and keeper of his financial secrets, faces the same charges plus grand larceny and falsifying records, according to the indictment.
“This was a 15-year-long tax fraud scheme,” Carey Dunne, an assistant district attorney, said in the courtroom Thursday. Weisselberg allegedly avoided taxes on $1.7 million of income that he received in the form of leased Mercedes-Benz vehicles, private school tuition for family members and rent-free apartments.
The 73-year-old Weisselberg appeared in court wearing handcuffs after surrendering at the courthouse early Thursday morning. Weisselberg and the Trump Organization pleaded not guilty.
The indictment was returned by a grand jury on Wednesday. Trump is not expected to face charges himself, although a spokesman for the Manhattan district attorney’s office said there’s an “active, ongoing investigation.”
The Trump Organization issued a statement criticizing the decision to bring criminal charges, saying “this is not justice; this is politics.”
The district attorney has spent years scrutinizing the Trump Organization, even obtaining the former president’s closely guarded tax returns in February after a legal battle that went all the way to the U.S. Supreme Court.
The company is a sprawling yet tightly held enterprise that includes golf courses, hotels, real estate and licensing deals, and it’s served as an international showcase for gaudy wealth that helped make Trump a household name long before he entered politics.
Trump’s business dealings have been mired in controversy and scandal before, including infamous bankruptcies in Atlantic City, fraud lawsuits over the Trump University training program and election-year hush money payments to women who said they had slept with Trump.
But the new indictments are the first time the Trump Organization has faced criminal charges, and a conviction or even an extended prosecution of the former president’s namesake company could damage his financial future, further undermining his ability to find business partners and obtain loans from banks.
There may also be more legal trouble ahead. The Manhattan district attorney has been working with the New York state attorney general, who is also probing whether Trump improperly inflated the value of his properties to obtain loans or deflated them to avoid taxes.
Trump has accused prosecutors of pursuing a political “witch hunt,” saying they were “in search of a crime” and investigating “things that are standard practice throughout the U.S. business community.”
Weisselberg has been under pressure to cooperate with the investigation, but he appears unwilling to help prosecutors. He has spent nearly five decades working for the Trump family, originally being hired by Trump’s father, Fred, to work in the company’s Brooklyn office in 1973.
The Trump Organization issued a statement Thursday calling Weisselberg a “loving and devoted husband, father and grandfather” who is “being used by the Manhattan district attorney as a pawn in a scorched earth attempt to harm the former president.”
Weisselberg’s life is deeply intertwined with the Trumps. One of his sons works for Ladder Capital, an important lender to the Trump Organization, and the other worked for the company itself, managing an ice skating rink in Central Park. When Trump became president, he left his company in the hands of his eldest sons, Donald Jr. and Eric, and Weisselberg.
Although Weisselberg never became known for emulating Trump’s flashy behavior, his work was lucrative, and prosecutors have been looking into whether it violated tax law. In particular, they have been scrutinizing whether private school tuition payments and rent-free apartments should have been reported as compensation and subject to taxes.
Daniel Alonso, a former top prosecutor in the Manhattan district attorney’s office, said these kinds of off-the-books “fringe benefits” could add up to hundreds of thousands of dollars in tax evasion.
“It’s ultimately the same as cash in a bag, subsidized by legitimate taxpayers,” he tweeted.
The indictments’ impact on Trump’s political stature is uncertain. His supporters have stuck with him through all manner of scandals and controversies that would have crippled another politician, including his being caught on video saying crude and demeaning things about women and multiple allegations of sexual assault.
While president, he maintained loyalty from Republicans while battling investigations into Russian support for his candidacy and hush money payments, as well as two impeachments over his push for Ukraine to investigate Joe Biden and his incitement of the Jan. 6 attack on the Capitol. He was acquitted in both instances in the Senate.
New criminal charges, even those that reach into Trump’s namesake company, are unlikely to shake the faith of his die-hard supporters. He’s already flirted with the possibility of running for president again, holding a rally in Ohio last week to support a primary challenge to a House Republican who voted to impeach him. And he traveled to the U.S.-Mexico border in Texas on Wednesday to criticize Democrats’ immigration policy and revisit his false claims that the last election was stolen from him.
But the indictments could provide more ammunition to the minority of Republican leaders who have grown weary of Trump’s influence on the party. And they could become a costly and embarrassing distraction at a time when Trump is laboring to maintain his political relevance since being replaced in the White House and being banned from Twitter, Facebook and other powerful social media platforms that were key to his political rise and dominance of the public stage.
