Franklin, Andrews, Kramer & Edelstein

[scion]

The Daily 202: Trump Org allegedly kept spreadsheets of grift

By Olivier Knox National Political Correspondent and Anchor of The Daily 202
July 2, 2021 at 4:11 p.m. GMT+1
with Mariana Alfaro
https://www.washingtonpost.com/politics/2021/07/02/daily-202-trump-org-allegedly-kept-spreadsheets-grift/

Imagine regularly engaging in potentially illegal activities online for years, and saving a detailed record of them in a computer folder marked “Red Flags.”

The indictment against former president Donald Trump’s eponymous business and its 73-year-old chief financial officer, unveiled yesterday, makes for riveting reading, partly because of its portrayal of scrupulously unscrupulous record-keeping.

One of the accusations against Trump Organization CFO Allen Weisselberg, detailed on page nine, describes a relatively simple scheme for that executive to pocket cash he allegedly did not report to the Internal Revenue Service.

In the charging document’s narrative, the business cut checks to an employee, who cashed them, then gave the cash to Weisselberg.

“The Trump Corporation booked this cash as ‘Holiday Entertainment,’ but maintained internal spreadsheets showing the cash to be part of Weisselberg’s employee compensation,” the indictment says.

In another section, the indictment says the Trump Organization was paying Weisselberg’s rent, electricity, telephone services, Internet, cable TV and garage fees.

“These payments were not booked in the Trump Corporations’ general ledger as employee compensation, but were instead labeled and deducted as ‘rent expense’ in the general ledger. However, for certain years, the Trump Organization maintained internal spreadsheets that tracked the amounts it paid for Weisselberg’s rent, utility, and garage expenses.”

It goes on to say “[s]imultaneously, the Trump Organization reduced the amount of direct compensation that Weisselberg received in the form of checks or direct deposits to account for the indirect compensation that he received in the form of payments of rent, utility bills, and garage expenses.”

In another section, the indictment says, Weisselberg requested the Trump corporation pay for items for his homes and the apartment of one of his children.

“These requests included such items as new beds, flat-screen televisions, the installation of carpeting, and furniture for Weisselberg’s home in Florida.

When Weisselberg made such requests, the Trump Corporation issued checks to pay the expenses and tracked the payment of the expenses internally as part of Weisselberg’s annual compensation.”?

Those are just some of the things prosecutors detailed as they accused Trump’s business of a “scheme to defraud” the government and Weisselberg of larceny and tax fraud by ducking IRS payments on more than $1.7 million of income.

My colleagues Shayna Jacobs, David A. Fahrenthold, Josh Dawsey and Jonathan O’Connell report:

“In charging papers, prosecutors alleged that the Trump Organization effectively kept two sets of books. In one — for internal use — it carefully tallied the value of benefits given to executives as part of their compensation: apartments, cars, furniture, tuition payments, even money for holiday gifts.

But in the documents that the Trump Organization sent to tax authorities, prosecutors said, those benefits were omitted. Prosecutors said the result was that the Trump Organization and its executives avoided taxes on their full compensation: [Weisselberg], they said, avoided paying more than $900,000.”

How much trouble there is for Trump’s company and Weisselberg – both pleaded not guilty – isn’t clear.

Here’s Josh:

“Whether charges that his company evaded taxes by hiding payments to employees will do any political damage to Trump is unclear as he teases another presidential run in 2024 and looks to play a starring role in the 2022 midterm elections. He has retained the strong support of the Republican Party through a series of potentially damaging episodes, including bragging of sexual assault on tape, being impeached twice and spreading falsehoods about the 2020 election that served as fuel for the mob that attacked the Capitol on Jan. 6.

But Trump weathered those political storms by fighting back with the power and the staff of the White House behind him as well as a Twitter account that could immediately set the news agenda for the day. Those resources are now gone, testing Trump’s ability to turn allegations against him into political rallying cries. Current and former advisers also said that Trump was often most disturbed by threats to his businesses as opposed to political showdowns.”

And here are Shayna, David, Josh and Jonathan again:

“The most serious charge against Weisselberg, grand larceny in the second degree, carries a maximum sentence of five to 15 years in prison. But none of the charges carry a mandatory prison sentence, meaning that — even if convicted on all counts — he would not necessarily face jail.

If Trump's companies were convicted, they could face hundreds of thousands of dollars in fines.”

Over at NPR, Andrea Bernstein, Ilya Marritz, Brian Naylor, and Hansi Lo Wang report:

“Of the charges levied in New York State Supreme Court, the most serious one facing Weisselberg is second-degree grand larceny, a Class C felony that carries a maximum sentence of 15 years.

The most serious charge for the Trump Organization is criminal tax fraud. A corporation found guilty of criminal tax fraud?under New York law?may be fined ‘double the amount of the underpaid tax liability resulting from the commission of the crime’ or $250,000” whichever is larger.

At the Associated Press, Bernard Condon reports:

“The criminal tax fraud charges unsealed against Donald Trump’s company Thursday are a blow to a business already reeling from canceled deals following the insurrection at the U.S. Capitol and the impact of the coronavirus pandemic on hotels and clubs.

The indictment may make it harder for Trump to strike new deals, get back loans and bring in new money to his sprawling and indebted business.”

Bernard strikes this cautionary note:

“Although some companies have collapsed after criminal indictments, others have survived or even thrived, including Bank of America, which was convicted for reckless mortgage lending practices. Others that received what’s called deferred criminal charges have done well afterward, including drug giant Bristol-Myers Squibb, which was accused of accounting fraud, and JPMorgan Chase & Co., which was caught up in connection with Bernard Madoff’s massive fraud.

Stocks in all three companies are at or near all-time highs.”


https://www.washingtonpost.com/politics/2021/07/02/daily-202-trump-org-allegedly-kept-spreadsheets-grift/