By Karen Freifeld and Luc Cohen
NEW YORK (Reuters) -Lawyers for former U.S. President Donald Trump’s real estate company on Monday accused its former chief financial officer of betraying the Trump Organization’s trust and succumbing to greed, during opening statements at the company’s criminal tax fraud trial.
Prosecutors have charged two Trump Organization units with cheating tax authorities over a 15-year period. The case is among the mounting legal troubles facing the 76-year-old Trump as he considers another bid for the presidency after losing in 2020.
Former CFO Allen Weisselberg, who has worked for Trump for nearly half a century, in August pleaded guilty and agreed to testify as a prosecution witness at trial as part of a plea agreement for him to receive a sentence of five months in jail.
Lawyers for the two Trump Organization units said Weisselberg cheated on taxes to benefit himself, not the company. Both the Trump Corporation and the Trump Payroll Corporation have pleaded not guilty. Trump has not been charged in the case.
“Weisselberg did it for Weisselberg,” Michael Van Der Veen, a lawyer for the Trump Payroll Corporation, said in his opening statement. “Greed made him cheat on his taxes, hide his deeds from his employer, and betray the trust built over nearly 50 years.”
The Manhattan district attorney’s office last year charged the Trump Organization with paying executives including Weisselberg – in perks such as rent and car leases without reporting those benefits to tax authorities, and falsely reported bonuses as non-employee compensation.
To prove the Trump Organization is guilty, prosecutors must show that a “high managerial agent” of the company – in this case, Weisselberg – acted in his official capacity.
Weisselberg “was a prime beneficiary of this scheme,” Susan Hoffinger, a prosecutor with the Manhattan district attorney’s office, said in her opening statement.
But, she added, the “long-term scheme to defraud the tax authorities was carried out…as way to further compensate top company executives and managers without reporting that income to the tax authorities.”
She said the scheme took place between at least 2005 and 2021 and was “conducted, directed and authorized at the highest levels of the accounting department at the company.”
Hoffinger said the company benefited from the scheme by keeping executives including “their trusted chief financial officer happy” and avoiding some taxes.
“Everybody wins here,” Hoffinger said. “Of course, everybody but the tax authorities. The problem with doing it this way is that it’s not legal.”
If convicted, the Trump Organization – which operates hotels, golf courses and other real estate around the world – could face up to $1.6 million in fines. It could also further complicate the real estate firm’s ability to do business.
The trial is expected to last over a month. A unanimous verdict is required for conviction on each count of tax fraud, scheming to defraud, and falsifying business records.
Weisselberg, was charged along with the company last year, and admitted in August to scheming with the Trump Organization and others not to report or to misreport substantial amounts of his and other employees’ income.
Weisselberg avoided taxes on $1.76 million in personal income himself through luxury perks, such as rent for a Manhattan apartment. He and others also got paid bonuses from other Trump Organization entities as contractors, rather than as employees.
Weisselberg stepped down as CFO when he was indicted but remained on the payroll as a senior advisor. After his guilty plea, he continued to be paid but was put on leave.
The day he pleaded guilty, the Trump Organization called Weisselberg a “fine and honorable man” who had been harassed by law enforcement in a “politically motivated quest” to get Trump.
But in a pretrial hearing this month, a Trump Organization lawyer accused Weisselberg of lying.
Justice Juan Merchan, the judge overseeing the case, has rejected the argument that the Trump Organization was targeted for selective prosecution.
Two top prosecutors on the case resigned in February, with one saying felony charges against Trump, a Republican, were warranted but that Manhattan District Attorney Alvin Bragg indicated doubts. Bragg, a Democrat, has said the investigation is ongoing.
The case is separate from a $250 million civil lawsuit filed by New York’s attorney general against Trump, three of his adult children and his company in September, accusing them of lying to banks and insurers by overvaluing his real estate assets and Trump’s net worth.
Trump also faces a federal criminal investigation into the removal of government documents from the White House when he left office last year.
