Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Thursday, December 7, 2023
Courthouse News Service
Thursday, December 7, 2023 | Back issues
Courthouse News Service Courthouse News Service

Verdict watch begins in trial on corporate tax scheme at Trump Organization 

Defense arguments embraced two themes: that there was no intent to benefit the company, and that Trump's accountants dropped the ball.

MANHATTAN (CN) — Lawyers for the Trump Organization pushed for an acquittal Thursday, delivering closing arguments in what has been a monthlong criminal trial over corporate perks that employees earned in lieu of inflated salaries. 

Luxury cars, a Manhattan apartment and school tuition payments are just a few of the ways that Trump Payroll and the Trump Corporation, two subsidiaries of the parent organization, compensated some top executives beyond what it gave them in paychecks.

The two corporate entities were indicted alongside Allen Weisselberg, the Trump Organization's longtime chief financial officer, who pleaded guilty over the summer to collecting more than $1.7 million in off-the-books compensation between 2005 and 2021.

Even with Weisselberg as a star prosecution witness, however, the government faces a tricky eyehole to thread the needle between individual employee crimes and corporate liability.

“Weisselberg did it for Weisselberg,” said Michael Van Der Veen, a Philadelphia-based lawyer for Trump Payroll, reprising exact lines from the trial’s opening arguments on Oct. 31. 

“The prosecutors have him by the balls,” Van Der Veen said bluntly of the star witness’s plea agreement. “When he says, ‘I did this solely for myself,’ you know he’s telling the truth.” 

Weisselberg's employment by the Trumps dates back to the 1970s, when their namesake company belonged to the former president's father. Despite his guilty plea, the 75-year-old remains on Trump payroll and is considered one of Donald Trump's most trusted and loyal executives.

Van Der Veen insisted that any tax savings that Trump Payroll reaped from Weisselberg's tax schemes were incidental, perhaps in the tens of thousands of dollars, because the CFO operated “on such a small scale as to only benefit himself."

“De minimis,” the lawyer continued, emphasizing the millions of dollars in business the Trump Organization conducts annually. 

Susan Necheles, who represents Trump Corp., similarly told the jury that Weisselberg's tax evasion scheme was not carried out "in behalf of the corporation."

“There was no such intent. The purpose of Mr. Weisselberg’s crime was to benefit Mr. Weisselberg," she said. 

Necheles directed jurors to transcripts of Weisselberg’s own testimony at trial, where he replied “no” when asked separately whether he had schemed or conspired with members of the Trump family when he was concealed untaxed fringe benefits from the company on his personal tax returns. 

“No mention of intent to benefit the Trump Corporation,” she reiterated numerous times through her nearly two-hour summation. “The intent here was to benefit Allen Weisselberg, not the Trump Corporation.” 

Necheles heaved blame at Mazars USA, the international accounting firm that prepared tax returns for the Trump Corporation, Donald Trump, Weisselberg and other top executives — and at Donald Bender, the firm’s partner who handled Trump’s accounts for years. 

“Bender… was either totally negligent or he turned a blind eye,” Necheles said of the tax preparer who was also the only fact witness the Trump Corporation called during the defense case. 

Necheles noted that Bender was such a “problematic” player in Weisselberg’s scheme that prosecutors declined to call him as a witness as trial, despite granting him immunity as a grand jury witness and prepping him for seven hours one weekend during trial. 

“Mazars saw no evil, heard no evil,” the lawyer accused. She noted that the Trump Org paid Mazars around $2.7 million each year, she said, “and the wool was pulled over their eyes.” 

Trump himself railed against Bender and Mazars for the company’s troubles, writing on his Truth Social platform during the trial last month: “The highly paid accounting firm should have routinely picked these things up — we relied on them. VERY UNFAIR!” 

About halfway into Necheles’ closing argument, Judge Juan Merchan sent jurors away for a morning break. Prosecutors raised an angry objection to the Trump Org displaying slides of transcripts in their closing argument that included trial testimony that was stricken from the record after a sustained objection. 

Judge Merchan called the Trump Organization team’s mistake “problematic” and briefly paused the summations while the defense lawyers reviewed all transcripts contained in their closing presentation to jurors. 

For his change of plea, Weisselberg agreed to a five-month sentence in state prison with five years of probation, and to repay nearly $2 million in back taxes. He faces a sentence of five to 15 years in prison if he violates the terms of his plea agreement, which required him to give truthful testimony in the Trump Org trial. 

On the stand, Weisselberg testified he and Jeff McConney, a Trump Org senior vice president, conspired to conceal accurate reporting of his income by manipulating payroll records to deduct their cost from his salary and issuing falsified W-2 forms.  

“It was my own personal greed that led to this,” an emotional Weisselberg testified. 

The CFO also admitted, however, that his employer would have had to pay twice as much in salary to reach the level of compensation he earned in untaxed perks.  

Just before closing arguments commenced on Thursday morning, Trump took to Truth Social again to attack the criminal trial as “ridiculous” and “a continuation of the greatest Witch Hunt of all time.” 

“The D.A.s Office should focus on Murders & Violent Crime, not "Bullshit!,” the former president wrote. 

Closing arguments from the prosecution is expected to take up to five hours and conclude on Friday, Dec. 2.

Follow @jruss_jruss
Categories / Business, Criminal, Employment, Trials

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.