Trump accountant eschews liability for tax fraud in NY trial  | Courthouse News Service
Tuesday, November 28, 2023
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Trump accountant eschews liability for tax fraud in NY trial 

Seeking to shift blame away from the former U.S. president for decades of tax crimes at his company, the Trump Corporation wants a jury to find that the responsibility lay with the company's longtime tax preparer to raise red flags.

MANHATTAN (CN) — Attorneys for the Trump Organization grilled the company’s longtime outside tax preparer Tuesday as the first defense witness in the trial about executive-compensation tactics that saved the company money illegally. 

Already granted immunity as grand jury witness, Donald Bender, a partner at Mazars USA who prepared the Trump Organization’s taxes for years, repeatedly asserted on the stand that he was unaware of any tax-dodging arrangement and that he had conducted proper due diligence when working with the Trump Organization's finance chief Allen Weisselberg to prepare Weisselberg's personal taxes based on information that Weisselberg relayed to him directly.

“We would have had a serious conversation about continuing with the client,” Bender testified during cross-examination this afternoon when asked what he would he have done if he uncovered Weisselberg's misreporting.

“It was not my obligation to go beyond the obligations of IRS publication 220,” the witness testified about why he accepted Weisselberg’s representations about the company's financials. “We had client conversations. He said he felt it was appropriate. It was his 1099.”

Weisselberg was indicted alongside the two corporate Trump entities that are on trial in Manhattan. As part of an August guilty plea to his entire 15-count indictment, including charges for grand larceny and tax fraud, Weisselberg admitted that he received more than $1.7 million in off-the-book compensation from Trump-owned companies. 

The Trump Organization’s defense attorneys argue that Weisselberg went rogue when he cheated on his personal taxes, acting for his own benefit and not the company’s.  

Prosecutors have spent the last four weeks meanwhile laying out their case that Trump’s namesake company is criminally liable for a scheme in which executives evaded taxes on company-paid apartments and other perks, including by preparing misleading tax returns and failing to report the benefits to tax authorities. 

If convicted, the company could be fined over $1 million and face obstacles making future deals. The case is the only trial to arise so far from the Manhattan district attorney’s three-year investigation of Trump and his business practices.

Bender, who prepared tax returns for both Weisselberg and former President Donald Trump, has been the only fact witness for the Trump Corporation’s defense case. 

Donald Bender, left, a former accountant for Donald Trump, arrives at Manhattan criminal court on Nov. 21, 2022. Prosecutors in the Trump Organization's criminal tax fraud trial rested their case that afternoon, earlier than expected, pinning hopes for convicting Donald Trump's company largely on the word of two top executives who cut deals before testifying they schemed to avoid taxes on company-paid perks. (AP Photo/Michael Sisak)

Seeking to shift blame away from the former president, attorneys for the Trump Corporation accused the tax preparer of failing to advise the company which fringe benefits need to be included on employees’ taxes and neglecting to raise red flags about reporting Weisselberg’s New York City residency in a Trump-branded condominium on the Upper West Side.

Bender said he likened Weisselberg reporting purported consulting services outside of the normal course of his position as chief financial officer on 1099 tax forms — intended for use by independent contractors — to a building superintendent getting additional compensation for snow removal.

On cross-examination, Assistant District Attorney Susan Hoffinger asked Bender about an engagement letter between Mazars and the Trump Organization that memorialized the firm’s employment for tax preparation services.

Bender explained to jurors how the engagement letter asserts that Trump's company, on behalf of CFO Weisselberg, bore the responsibility for the accuracy of the financial records that the decades of tax preparation.

Bender testified that he prepared the personal tax returns of Weisselberg’s and other lower-level staffers at the Trump Organization for free as an accommodation for the company's significant contract, but he needed to be paid for his preparation of Donald Trump’s voluminous personal tax paperwork. 

"It's a big return. It's a really big return. It's like this high," the bespectacled accountant said excitedly, lifting his left hand above his head to illustrate the height of stacks of Trump’s personal finance documents. "It takes a while."

Weisselberg’s paperwork was much smaller and straightforward by comparison, Bender said, estimating that it could be prepared in about an hour.

Bender testified that he was never aware that Trump was paying for Weisselberg’s grandchildren’s private school tuition, which he said should likely have been reported as Trump Corp. income for either Weisselberg or his son, Barry Weisselberg.

On his Truth Social platform last week, Trump himself blamed his companies' troubles on Bender and Mazars, writing: “The highly paid accounting firm should have routinely picked these things up — we relied on them. VERY UNFAIR!” 

Prosecutors had considered calling the accountant as a government witness, even prepping him for six hours during a Zoom conference on Saturday but decided to leave him for the defense. 

Bender’s firm, Mazars, severed ties with Trump in February. After New York Attorney General Letitia James said that the annual financial statements it prepared for the former president regularly misstated the value of assets, Mazars said they “should no longer be relied upon.”

Weisselberg was the star attraction among the five witnesses who testified for the government in the first part of the trial.  

“There was some benefit to the company,” the 75-year-old testified Friday, “but primarily it was, you know, my greed.”  

Separately on Tuesday morning, a block away from the criminal trial, a Manhattan Supreme Court judge set a tentative October 2023 trial date in the New York Attorney General’s civil financial fraud case against Donald Trump and the Trump Organization for illegally inflating the value of his assets. 

Trump, who has refused to accept he was legitimately defeated in his 2020 reelection bid, officially announced his long-expected bid for the 2024 presidential race last week. 

After a break for Thanksgiving, the tax fraud trial in Manhattan will resume next week with closing summations expected as early as Tuesday, Nov. 29.

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Categories / Business, Criminal, Trials

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