MANHATTAN (CN) — Arriving to the courthouse at least eight hours before his 2:15 p.m. arraignment alongside the Trump Organization, Allen Weisselberg pleaded not guilty to long-expected fraud charges.
In addition to grand larceny and other charges against Weisselberg, the 24-page indictment charges the Trump Organization with first-degree fraud and scheme to defraud — alleging that they kept tax authorities in the dark about more than $1.7 million of indirect compensation, thereby unlawfully evading hundreds of thousands of dollars in federal, state, and local taxes.
Weisselberg, 73, entered the court in handcuffs, surrounded by court officers, shortly before his arraignment began.
The 15-count indictment accuses the Trump Organization of flouting tax obligations by letting Weisselberg and other top executives collect nonmonetary “fringe” benefits and perks, including free or basically free use of apartments in the Trump real estate empire, as well as private school tuition, Mercedes Benz leases and end-of year holiday bonuses, all of which were not reported to tax authorities.
“The scheme was intended to allow certain employees to substantially understate their compensation from the Trump Organization, so that they could and did pay federal, state, and local taxes in amounts that were significantly less than the amounts that should have been paid,” the indictment states.
“The scheme also enabled Weisselberg to obtain tax refunds of amounts previously withheld and remitted to federal and state tax authorities. Further, the scheme involved the failure of the Trump Corporation and Trump Payroll Corp. to withhold income taxes on wages, salaries, bonuses and other forms of compensation paid to certain employees. The scheme also allowed the Trump Organization to evade the payment of payroll taxes that the Trump Organization was required to pay in connection with employee compensation.”
Weisselberg's attorneys Mary Mulligan and Bryan Skarlatos emphasized in a statement Thursday morning that they "will fight these charges in court.”
The former president himself is not named in the newly unsealed charges filed by a Manhattan grand jury, which mark the first criminal case to arise from the two-year probe led by Manhattan District Attorney Cyrus Vance Jr., a Democrat who leaves office at the end of the year.
To the Trump Organization, though, its namesake is the elephant in the room. A representative for the organization called Weisselberg “a pawn in a scorched-earth attempt to harm the former president.”
"Make no mistake — this is not about the law; this is all about politics," the organization added later, calling it unprecedented that a company should face criminal charges either from a district attorney or the IRS over employee benefits.
Assistant Manhattan District Attorney Solomon Shinerock rebuffed that claim in court Thursday.
“Politics has no role in the grand jury chamber, and I can assure you it played no role here,” he said.
The Trump Organization refused to comply with subpoenas or allow prosecutors to speak with employees, he said, and cannot turn around and demand leniency in the ongoing investigation. Shinerock hammered the point as well that the schemes driving today's charges are not standard businesses, “nor was it the act of a rogue or isolated employee.”
He said Weisselberg, who is still CFO, failed to pay taxes on $1.7 million of income, and directed the deletion of company records to conceal his participation in the scheme. According to the indictment, that money went to benefits like rent payments and related expenses.
On behalf of the Trump Corporation, attorney Alan Futerfas entered a plea of not guilty.
The government turned over two hard drives, one to the company's counsel and the other to Weisselberg's, with millions of initial discovery documents. Judge Juan Merchan signed a protective order that both parties are in agreement about today, but they are reserving the right to request changes to its conditions in the future.
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