clearn.png
Friday January 27th, 2023 7:57PM

Ex-CFO says Trump kids raised pay after learning of scheme

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — How did Donald Trump’s oldest sons — entrusted to run his company when he became president — react when they learned that a top executive was scheming to dodge taxes on lavish corporate perks?

They gave him a raise, according to testimony Friday at the Trump Organization’s criminal tax fraud trial.

Allen Weisselberg, the company's longtime chief financial officer, testified that Eric Trump raised his pay $200,000 after an internal audit spurred by Trump’s 2016 election found that he'd been reducing his salary and bonuses by the cost of the perks.

The raises boosted Weisselberg’s annual pay to $1.14 million, extra cash he said he used to pay for things Trump and the company previously had: Manhattan apartment rent, Mercedes-Benz cars for him and his wife, his grandchildren's school tuition, and more.

The company continues to pay Weisselberg $640,000 in salary and $500,000 in holiday bonuses and punished him only nominally after his arrest in July 2021, reassigning him to senior adviser and moving his Trump Tower office. He's now on paid leave.

“Now, even after you pled guilty in this case did the company reduce your salary one penny?” prosecutor Susan Hoffinger asked Weisselberg on his third and final day of testimony.

“No,” he said.

“Even with your betrayal of their trust?” she asked.

“Correct.”

Weisselberg testified that Eric and Donald Trump Jr., both Trump Organization executive vice presidents, knew from the audit that Weisselberg had not reported his apartment as taxable income, as required by law.

Weisselberg told jurors he stopped scheming after the audit and soon asked Eric Trump for a raise, conveying to him that “since the practice was no longer going on I would need some additional income to pay for those expenses.”

Weisselberg said Eric Trump, who handles the company’s day-to-day operations, signed off on his raise and is now in line to approve another $500,000 holiday bonus — even as Weisselberg prepares to shuffle off to New York City’s infamous Rikers Island jail complex.

Other executives accused of scheming to avoid taxes also kept their jobs and pay, Weisselberg said. They include his son, former Central Park ice rink manager Barry Weisselberg, and the company's chief operating officer, Matthew Calamari Sr.

Weisselberg, 75, pleaded guilty in August to taking $1.7 million in off-the-books compensation. His plea agreement requires him to testify for the prosecution in exchange for a five-month jail sentence. Weisselberg, who had been facing up to 15 years in prison, said he previously rejected an offer of one to three years in prison.

Manhattan prosecutors allege that the Trump Organization helped top executives avoid paying taxes on company-paid perks and that it is liable for Weisselberg's wrongdoing because he was a “high managerial agent” acting on its behalf.

The tax fraud case is the only trial to arise from the Manhattan district attorney’s three-year investigation of Trump and his business practices. If convicted, the company could be fined more than $1 million and face difficulty making deals.

Weisselberg’s testimony Friday suggests that key Trump Organization executives — members of Trump’s family — condoned his behavior once it was discovered, rather than firing him and alerting authorities. Weisselberg said the scheme benefited the company because it didn't have to pay him as much in salary.

The company's lawyers, however, argue that the Trumps are deeply loyal, stressing how Weisselberg was “among the most trusted people they knew" and how they continue to stand by him, even as he acknowledged betraying them. His lawyers are being paid by the company.

Company lawyer Alan Futerfas, questioning Weisselberg on cross-examination, noted that even “in the worst time in your life” Trump has “not kicked you to the curb.” But, the lawyer asked, “you don’t understand that to mean that he approves of what you did, do you?”

“No,” Weisselberg said.

Trump, who announced Tuesday he is running again for president in 2024, is not expected to appear at the trial. But he signaled Friday that he has been following along, defending Weisselberg and bashing prosecutors in Truth Social posts.

Trump wrote that the case had “fallen apart” after Weisselberg testified Thursday, that neither Trump nor Trump’s family were involved in his tax avoidance scheme.

“Did a longtime executive pay tax on the use of a company car, or a company apartment, or payments (not even taken by us as a tax deduction!) for the education of his grandchildren. For this he get handcuffs and jail?” Trump wrote, describing the situation as “VERY UNFAIR!”

Trump was elected president in November 2016, bringing new scrutiny to his Trump Organization, a privately held entity through which he and his family manage its golf courses, luxury towers and other investments.

Weisselberg said he and another executive, Jeffrey McConney, decided around then that the company had to end some of its dubious pay practices. They brought in a Washington lawyer who conducted an audit and wrote a memo of her findings.

McConney, the senior vice president and controller, fudge payroll records to reduce Weisselberg's income taxes. He received immunity and testified earlier in the trial.

___

Follow Michael Sisak on Twitter at twitter.com/mikesisak. Send confidential tips by visiting https://www.ap.org/tips/.

  • Associated Categories: U.S. News, Associated Press (AP), AP National News, Top U.S. News short headlines, AP Business, AP Business - Corporate News
© Copyright 2023 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Ex-CFO says Trump kids raised pay after learning of scheme
The Trump Organization’s former chief financial officer has testified that Eric Trump hiked his pay by $200,000 after an internal audit spurred by Trump’s 2016 election found that he had been scheming to dodge taxes on lavish corporate perks
3:35PM ( 11 minutes ago )
Tennessee court: Juvenile life sentencing unconstitutional
Tennessee’s Supreme Court has ruled that a state law mandating life sentences for juvenile homicide offenders is unconstitutional
3:33PM ( 13 minutes ago )
Feds: Oath Keepers sought 'violent overthrow' of government
A federal prosecutor says Oath Keepers founder Stewart Rhodes and four associates discussed using violence to overturn the results of the 2020 election for weeks and saw an opportunity to do it when rioters started attacking the Capitol
3:31PM ( 15 minutes ago )
Associated Press (AP)
Twitter risks fraying as engineers exit over Musk upheaval
Elon Musk’s managerial bomb-throwing at Twitter has so thinned the ranks of the software engineers who keep it up and running that programmers who were fired or resigned this week say Twitter may soon fray so badly it could actually crash
2:44PM ( 1 hour ago )
EXPLAINER: What Griner may endure in Russian penal system
WNBA star Brittney Griner this week began serving her nine-year sentence for drug possession at a Russian penal colony
2:42PM ( 1 hour ago )
Elizabeth Holmes faces sentencing for her Theranos crimes
A federal judge on Friday will decide whether disgraced Theranos CEO Elizabeth Holmes should serve a lengthy prison sentence for duping investors and endangering patients while peddling a bogus blood-testing technology
2:27PM ( 1 hour ago )
AP National News
Biden says inflation help is coming but 'will take time'
President Joe Biden is cautioning that “it’s going to take time” for inflation to recede
2:56PM ( 49 minutes ago )
With Twitter in chaos, some ways to protect your account
Twitter is in chaos mode
2:45PM ( 1 hour ago )
Commanders settle with Md. over season-ticket holders' money
The Washington Commanders have agreed to return security deposits to former season ticket holders and pay a $250,000 penalty in a settlement with the state of Maryland
2:42PM ( 1 hour ago )
AP Business
US stocks gain ground, but still head for weekly losses
Stocks edged higher on Wall Street but are still heading for losses for the week after several days of bumpy trading
10:33AM ( 5 hours ago )
Wall Street opens higher but is still headed for weekly loss
Stocks are opening higher on Wall Street but are still heading for losses for the week after several days of bumpy trading
9:47AM ( 5 hours ago )
Elizabeth Holmes faces judgment day for her Theranos crimes
A federal judge on Friday will decide whether disgraced Theranos CEO Elizabeth Holmes should serve a lengthy prison sentence for duping investors and endangering patients while peddling a bogus blood-testing technology
2:36AM ( 13 hours ago )
AP Business - Corporate News
Tennessee court: Juvenile life sentencing unconstitutional
Tennessee’s Supreme Court has ruled that a state law mandating life sentences for juvenile homicide offenders is unconstitutional
3:33PM ( 13 minutes ago )
Feds: Oath Keepers sought 'violent overthrow' of government
A federal prosecutor says Oath Keepers founder Stewart Rhodes and four associates discussed using violence to overturn the results of the 2020 election for weeks and saw an opportunity to do it when rioters started attacking the Capitol
3:31PM ( 15 minutes ago )
US stocks edge higher, but on track to end week with losses
Stocks were mostly higher on Wall Street Friday afternoon, though major indexes remained on pace to finish lower for the week after several days of bumpy trading
3:31PM ( 15 minutes ago )
Driver arrested in sheriff's recruits crash is released
Authorities have released from custody a young man who was arrested on suspicion of attempted murder of a peace officer after an SUV veered into the wrong lane and crashed into a formation of Los Angeles County law enforcement recruits on a training run, injuring 25
3:27PM ( 18 minutes ago )
'Viral jambalaya': Early flu adding to woes for US hospitals
A rapidly intensifying flu season is straining U.S. hospitals already overburdened with patients sick from other respiratory infections
3:26PM ( 20 minutes ago )