The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Tag: trump organization indictment

Will Ivanka Be Indicted Next In Trump Organization Criminal Probe?

Reprinted with permission from Daily Kos

Back in November 2020, after investigations into decades of Donald Trump's tax returns revealed the former president didn't seem to ever pay any taxes, reports came out in The New York Times detailing inquiries being made by the New York district attorney's office concerning "consulting fees" Ivanka Trump pulled in over the years. A reported $747,622 of these fees were paid to Ivanka by way of a company she co-owned, and appeared within the $26 million in "deductions" claimed by Donald Trump over the years. Whether there were more "consulting fees" received by Ivanka or any of the other Trump offspring was not reported, but considering what we know about the Trumps, speculating that the answer is a resounding and very provable yes seems like a safe bet.

Now that prosecutors have charged the Trump Organization and its chief financial officer Allen Weisselberg with contributing to (and benefiting from) a tax fraud scheme, Weisselberg's financial compensation from the company he helped run seems to have been very clearly set up to hide taxable income. Prosecutors reportedly have two sets of books used by the Trump Organization over the years to delineate how they were scamming the government out of taxes. Since that time it has become clear that even more Trump tax information has been seized by investigators, and what those documents might detail remains to be seen. But one thing is for sure, to all who are paying attention: Ivanka Trump and other family members tied to the Trump Organization are clearly under investigation as well.

When the Times story came out in November 2020, Ivanka tweeted, "This is harassment pure and simple." Not unlike her father, Ivanka seems to use her Twitter account to whine about being persecuted while lying about things in general. One of the more problematic aspects of Ivanka's $747,622 consulting fee that appeared on a 2017 disclosure form is that"Ivanka was an executive officer of the Trump companies that made the payments." This means she received consultant tax breaks for a company of which she was also a full-time employee. It's an old-timey tax dodge.

On Monday, former federal prosecutor Cynthia Alksne gave MSNBC her opinions on what investigators were doing now that Weisselberg has been charged, saying, "Prosecutors went to an amazing amount of effort to show Weisselberg 'we have everything we need,' and they're really not only pressuring him to flip, but the amount of detail in this indictment tells me that they're trying to tell other people you have got to flip, because 'we have everything; we have the double books. We know what you told your tax accountants was a lie. We know that we're gonna be able to prove these cases.'" She went on to say that while we don't know exactly who the unnamed individuals inside of the Weisselberg indictments are, they are likely the next people who will receive the New York prosecutors' legal attentions. "We've heard a lot of this reporting about Ivanka Trump getting consulting fees, consulting fees for things she may or may not have done. That looks to be the next place," said Alksne. "We'll just have to see."

Donald Trump biographer Michael D'Antonio told CNN that the Trump Organization's dirty dealings don't take the highest level of investigation to uncover, calling much of the corruption "all so obvious." D'Antonio explained that the most shocking aspect of the multimillion-dollar organization's tax dodging is "how unsophisticated it is. This is just simple greed, the kind of things almost anyone could imagine, and the minute [prosecutors] went looking for it they found it."

"The other person who I think is in peril is Ivanka Trump. One of the things that Allen Weisselberg is in trouble for is taking money as a contractor and then claiming self-employed status so that he can get some of the retirement benefits that the tax code allows for self-employed people. Well, we know that Ivanka Trump got quite significant sums paid to her as non-employee compensation. That freed the Trump Organization from paying part of her taxes, and it put her in a status that I think the IRS would have lots of questions about. So, these folks don't know how to play the game straight. I think everything they do is crooked," D'Antonio said.

On Saturday, former personal lawyer Michael Cohen had this insight into Donald Trump.

You can watch Trump's biographer D'Antonio talking about the Trump family's legal problems on July 4, and below that you can watch former federal prosecutor Cynthia Alksne talking about what might be happening next for the Trump gang.

Trump biographer Ivanka's tax issues www.youtube.com


Former federal prosecutor Cynthia Alksne talks about the Trump family's potential tax fraud problems www.youtube.com

Ex-Trump Org Executive Confirms New York Indictment’s Charges

Reprinted with permission from Alternet

In a recent piece for the New York Daily News, former Trump Organization executive Barbara Res offered an insider's view of criminal charges against the ex-president's company and its CFO, Allen Weisselberg.

Res, who worked with Donald Trump on the construction of Trump Tower in the 1980s, has a grim assessment of his integrity and business practices from that era. And while it's been decades since she worked for the man, and her time at his company dates back well before the current charges, she argued that the allegations made against the Trump Organization and Weisselberg — which include a scheme to defraud the government out of taxes on the CFO's non-salary compensation benefits — rings completely true. Based on her view of the inside of Trump's operation, the prosecutor's story lines up exactly with his typical conduct.

"Flaunting and ultimately disobeying the tax laws was a way of life," she explained. "I was on salary, but some executives on the payroll were paid as independent contractors. That meant that Trump could avoid paying his share of payroll taxes and the employee could deduct all sorts of things to diminish his income that you can't do on salary. It was a win-win for everyone except the city, state and federal governments."

Her piece also provides answers to one of the mysteries that arose in the wake of the indictment. The prosecutors accuse the Trump Organization of avoiding taxes on $1.7 million of compensation to Weisselberg over more than a decade. This is a hefty sum from any average person's perspective, and it's certainly the kind of amount that can catch the eye of law enforcement if they're paying attention. But in the perspective of the Trump Organization's size, it's really not that much money. Why wouldn't Weisselberg and Trump just pay the proper taxes? Why take the risk of avoiding taxes when it wouldn't really affect the company's bottom line in any substantial way?

These were reasonable questions. But Res provides a compelling answer, and one that accords with the way Trump behaves in public: This is just how he acts. He tries to cut every corner and cheat at everything, because he thinks he's entitled to.

"If I know the way Trump thinks, and I do, Trump never gave a serious thought about what was legal, only to whether it could be gotten away with. And as far as he was concerned, he could get away with anything. As he has proven so far," she wrote. "The man's M.O. was bending and breaking the rules for maximum profit and advantage."

Another factor, too, helps explain the rationale behind this risky conduct. According to Res, it was about maintaining loyalty from people like Weisselberg:

Trump went to great lengths to make people loyal to him. The definitive example of this was giving a job to an employee's child. This was a default for Trump; it was easy and it cost him nothing. Often Trump "found" jobs, sometimes making them up. The employee then could not go against Trump because the child would lose his job. And he did this with his most loyal employees.
Trump went even further with Weisselberg's kids. Trump paid for one to live in a very expensive apartment and gave him a lucrative job. He helped the other get a prestigious job at a company he did business with. So that made Weisselberg even more loyal and his kids super loyal.

And inducing someone to break the rules with you — to be complicit in the crime of, say, defrauding the government by concealing the true extent of your compensation — binds them to you. They have an interest in protecting you, because you're all in on the same misdeeds.

Res argues that this may even be a force that could keep Weisselberg from flipping against Trump now. She suggests Trump may know about additional criminal conduct Weisselberg engaged in, or that Weisselberg's children may have engaged in, which the ex-president could expose if he feels betrayed. But Res ultimately argues that Weisselberg will cooperate with prosecutors against Trump.

Crucially, too, she says that Trump would've been aware of the illegal tax scheme the company has been charged with.

"In my experience, as with all facets of his business, major decisions like paying someone's rent or tuition were made by Trump and Trump alone. And with his other tax avoidance schemes, Trump had his minions to carry them out — but he was always in charge," she wrote. She told several anecdotes to illustrate the point, including:

The workers who did the demolition prior to the erection of Trump Tower were not paid fair wages and most of them were illegal immigrants. When this came up in court, Trump denied having any knowledge of it. In fact, he had a man on the job watching everything that happened and reporting it back to Trump, every day. Trump knew exactly what was going on.

All this would seem to make Trump himself criminally culpable, but he remains uncharged. One reason observers suspect prosecutors want to get Weisselberg to flip is so they can get him to testify about Trump's own intent to violate the law. Then they could bring criminal charges directly against the former president, rather than just against his company.

As I recently explained, Trump seems to be anticipating this. He is already trying to push the narrative that he was ignorant about the relevant tax laws — and in this case, ignorance of the law can be a legally useful defense. Prosecutors will likely have to prove Trump willfully and knowingly violated the law if they want to criminally charge him.

For those wondering, though, there's little chance Res's account on its own will change Trump's legal circumstances or help prosecutors make the case against him. It's a compelling narrative about his past, and can lead the casual observers to draw damning inferences, but it's not the type of evidence that will likely be allowed in court, as legal experts Eric Columbus and Joyce Vance explained:

Trump’s Criminal Defense Already Has A Big Problem

Reprinted with permission from Alternet

One section of former President Donald Trump's rally speech on Saturday night in Florida stood out to many observers: his response to last week's indictment of his company and its chief financial officere Allen Weisselberg.

Weisselberg and the Trump Organization were hit with a 15-count indictment from the Manhattan District Attorney, Cy Vance, alleging a scheme to defraud the government and avoid paying required taxes on more than a million dollars worth of non-salary compensation the CFO has received for over a decade.

Trump himself was not charged in the scheme, though many argue it's hard to believe he wasn't aware of this allegedly criminal conduct — and indeed, it's hard to believe this kind of criminality wasn't widespread under his leadership. But if Vance ever chooses to try and bring a case against the former president, Trump will likely try to claim he was unaware that these crimes were occurring, or that he was unaware that what was being done was illegal. On Saturday, he started roadtesting this type of defense — which, if true, would undermine the case that he had the criminal intent required to be found guilty of the crimes in question — for his fans:

"You didn't pay tax on the car or a company apartment...you didn't pay tax, or education for your grandchildren — I, don't even know what do you have to put? Does anybody know the answer to that stuff?"

Some legal commentators argued it was clear Trump was trying to establish this narrative to exonerate himself:

However, there's a big problem with this defense. It directly contradicts what Trump himself has said about his own understanding of tax law and his own company's finances. In 2017, he told the New York Times:

I know the details of taxes better than anybody. Better than the greatest C.P.A. I know the details of health care better than most, better than most. And if I didn't, I couldn't have talked all these people into doing ultimately only to be rejected.

And this wasn't just out of thin air — it literally followed his own discussion of businesses' tax liabilities:

The tax cut will be, the tax bill, prediction, will be far bigger than anyone imagines. Expensing will be perhaps the greatest of all provisions. Where you can do something, you can buy something. … Piece of equipment. … You can do lots of different things, and you can write it off and expense it in one year. That will be one of the great stimuli in history. You watch. That'll be one of the big. … People don't even talk about expensing, what's the word "expensing." [Inaudible.] One year expensing. Watch the money coming back into the country, it'll be more money than people anticipate.

His remarks aren't particularly articulate about the subject matter, but given his interest in the topic, it's a stretch to believe he was completely in the dark about what kinds of company expenses created tax obligations for him and which did not.

In 2016, too, he also suggested that he's able to pay low or no taxes because he's "smart." He also said: "As a businessman and real estate developer, I have legally used the tax laws to my benefit and to the benefit of my company, my investors and my employees. Honestly, I have brilliantly — I have brilliantly used those laws."

This could and should be interpreted as mostly candidate bluster, but it severely undermines his ability to later claim to a court that he's completely befuddled by the mechanics of paying taxes.

Regardless of these and similar comments, Trump might still get away with claiming that he didn't have a clue about the tax practices at his own company. The DA may feel he lacks the evidence to prove Trump's intent beyond a reasonable doubt, and he may be unwilling to go forward against such a high-profile defendant without a rock-solid case. But if charges are forthcoming, Trump has still undermined what would likely be his best defense with his boasting. And if he's allowed to skate free because he persuasively argues that he was clueless about his illegal tax practices, he'll undermine a pillar of his own ostensible political appeal. Though perhaps he's become such a symbolic figure for the right wing that the substantive case he made for his own political prowess is now largely irrelevant.

What Major Media Misunderstood About Trump Firm’s Fraud Indictment

Reprinted with permission from Alternet

Last Thursday, an unsealed indictment of the Trump Organization and its chief financial officer Allen Weisselberg revealed a long series of serious charges, including substantial tax fraud. Shortly after, former President Donald Trump's son Eric Trump conducted multiple interviews where he weighed in on the charges his family's organization is facing.

At one point during his appearance on Fox News, Eric Trump waved off the incentives as "fringe benefits." However, a comprehensive piece published by Just Security pushes back against Eric's claims explaining why the investigation covers much more area than that.

The pieces offers several specifics that highlight why the case is not as frivolous as the former president's son tried to suggest. It argues: "This is no mere fringe benefits case" but rather a "straight-out fraud case, claiming that the defendants kept double books: phony ones to show the tax authorities, and accurate ones to be hidden from view."

Offering an analogy of the charges brought against the organization, author Daniel Shaviro laid out an example scenario of what has allegedly been done in comparison to the diluted version of the allegations Trump's lawyers are trying to perpetuate:

"Suppose that your employer pays you monthly, through automatically deposited paychecks that end up being included on your annual W-2. But suppose that each month you could stop by the front office, request an envelope full of cash in unmarked bills, and have your W-2 reduced accordingly. So your true income would be the same as if you hadn't stopped by, but you'd be reporting less salary. If your employer kept careful records of all the cash it gave you, and also still deducted it all, we would basically have this case. That is far different from simple failure to pay taxes on fringe benefits, which is how the indictment has been widely misunderstood, thanks in part to Trump's defense lawyers' laying the groundwork before the charges were made public on Thursday."

As for "fringe benefits," the publication notes that the problem centers on the fact that the items Weisselberg received that were funded by the company "had no relationship whatsoever to the sort of items that, under appropriate circumstances, might potentially constitute tax-free employee fringe benefits."

The piece explained:

But the following items that the company paid for, on Weisselberg's behalf, most emphatically do not fit the profile of potentially excludable fringe benefits:
• private school tuition expenses for Weisselberg's family members (First Count ¶9).[2]
• a Mercedes Benz automobile that was the personal car of Weisselberg's wife (First Count ¶10).
• unreported cash that Weisselberg could use to pay personal holiday gratuities (First Count ¶11).
To treat cash as a "fringe benefit" would imply that the term covers all employee compensation. Does this mean that, whenever one is paid with cash off the books and does not report it, the IRS is merely quibbling over fringe benefits? Of course not.
• personal expenses for Weisselberg's other homes and an apartment maintained by one of his children; these included such items as new beds, flat-screen televisions, the installation of carpeting, and furniture for his home in Florida (First Count, ¶12).
• rent-free lodging and other benefits to a family member of Weisselberg (First Count, ¶13).

The extent of the charges in the indictment was also highlighted. The main charges include "New York State fraud, conspiracy, and grand larceny statutes." Other points to highlight include double bookkeeping, deceptive bookkeeping, "and fraudulent mischaracterization of employee compensation" which make the organization's actions appear to deliberate actions "conceal the fraud."

Some legal experts and observers believe the current charges are only the "first wave" for what appears to be an ongoing investigation. It's unclear yet how expansive any future charges may be.

Indictment: Trump Thinks He Can Choose Which Laws To Heed

Reprinted with permission from DC Report

The extraordinary indictment of the Trump Organization last Thursday prompted an extraordinarily awful response from its sole owner and its lawyer.

Trump asserted that he can pick and choose which laws he obeys. His lawyer, Alan Futerfass, says that prosecutors should have settled the Trump Organization tax fraud allegations in secret negotiations, not with criminal charges filed in public.

What's brazen is how Trump and Futerfass reveal support for two systems of justice, separate and unequal, with people like themselves getting special light treatment.

Pay close attention to the last words in this Trump Organization statement: "The district attorney is bringing a criminal prosecution involving employee benefits that neither the IRS nor any other district attorney would ever think of bringing."

The statement is a lie. Tax fraud cases involving unreported compensation get prosecuted.

Still, the Trump Organization statement may serve a useful purpose by awakening the public to how little prosecution there is against what the IRS says is rampant and growing tax evasion at the top of the economic ladder. Such inattention may cost the rest of us more than a trillion dollars a year.

The Trumpian assertion that prosecutors should not bring charges against thieves who steal from our governments reveals the entitled view among too many of the wealthiest and most privileged Americans. Many of the rich think money makes them special, so special that the criminal law shouldn't apply to them.

The 15-count indictments returned by a Manhattan grand jury are only the first in what l likely will be a series of charges. Ultimately, I anticipate that a grand jury will return a state-level racketeering enterprise indictment. That would allow a receiver to take control of the Trump Organization, ending its decades of cheating workers, vendors, governments and investors.

The richly detailed bill of particulars hints at other likely prosecutions.

Prosecutors charged Trump bagman Allen Weisselberg, chief operating office for the organization, only after he repeatedly rejected invitations to flip on Trump and turn state's evidence. Weisselberg, the indictment says, destroyed some evidence and maintained two sets of books to hide transactions from tax collectors.

This indictment is a tool to leverage Weisselberg, to get him to realize the awful fate that awaits him if he clings to Trump.

After 48 years of doing the Trump family's dirty work, Weisselberg has become a wholly owned psychological subsidiary of Trump's criminal mind. Breaking free would be difficult for Weisselberg, who is about to turn 74, but the prospect of dying in prison may clarify his thoughts about his moral and legal duty. Weisselberg could get 15 years, but he also might get probation.

Trump Textbook

Trump has long argued that he himself is above the law.

When Manhattan District Attorney Cyrus Vance was trying to get his accounting, business and tax records, Trump went to the Supreme Court twice. In 2019, Trump lawyer George Consovoy told a federal judge that if Trump actually shot someone on Fifth Avenue, the NYPD could not even investigate the murder.

Years earlier Trump endorsed a textbook for his scam Trump University. This is from Trump University Asset Protection 101: Tax and Legal Strategies of the Rich: "When you own your own business, you determine how much income tax you pay."

That's not true, but it sure tells you how Trump thinks.

Contrast Trump's cavalier attitude about breaking the law with how American law enforcement and the courts treat those born into poverty who commit petty nonviolent crimes.

Willie Simmons is serving life in an Alabama prison for stealing $9 in 1982. Alvin Kennard got the same life sentence for stealing $36 in 1984, though a judge freed him last year.

50 Years For A Pizza Thief

Jerry Dewayne Williams—broke, hungry and turned away when he begged for food—grabbed a slice of pizza from four children in Redondo Beach, California. Williams got 25 years to life, though a judge let him go after five years.

And then there's Leandro Andrade, another penniless man, who stole four videos in one store and five in another. The U.S. Supreme Court held that his consecutive 25-year sentences were "not unreasonable."

Yet the Trump Organization asserts that enabling its chief finance officer to steal $880,000 from the federal, state and New York City governments shouldn't be prosecuted.

Nine bucks, nine videos, one slice of pizza for a hungry man result in life sentences or damn close, but prosecutors should look the other way or allow tax fraudsters to negotiate in secret, pay some money and go on their way? That's Trumpian chutzpah.

Victor Hugo's 19th century novel Les Misérables about Jean Valjean, who stole bread for his starving sister and spent the next 19 years in prison, is not exactly fiction in modern-day America.

One law for peasants and another for the privileged is not in our Declaration of Independence or our Constitution. Still, it dwells in the hearts of a majority of our Supreme Court justices, as well as Donald Trump and his well-heeled white-collar criminal defense lawyers.

Expect More Indictments

You can be sure that the finely detailed case filed Thursday is far from a comprehensive indictment of Trump Organization tax cheating.

Barbara Res, who for many years oversaw Trump construction projects, told Ari Melber on MSNBC just hours after the arraignments about dubious $1,000 a week expense accounts.

"The first time I started working for Trump, one of the first things I encountered was, I was checking expenses of one of our top employees, and they were ridiculous," Res said.

Res said she spoke to Trump about the inexplicable expense money only to discover he was behind it. "Trump told me to just come up with just so much, I forget the amount, a thousand dollars a week or whatever it was in expenses, maybe not that much back then, and they'll be paid. And they'll be off the books."

What Res described is tax fraud, plain and simple. And if we applied to Trump the same standards applied to Simmons, Kennard, Williams and Andrade, then Trump would have started wearing an orange jumpsuit decades ago. But we don't have equal justice for all.

Notice that Trump's statement through the Trump Organization and lawyer Futterfas' statements aren't denials of tax fraud, just assertions that to prosecute for these crimes isn't fair.

Trump Firm Indictments May Signal Further Charges Soon

Reprinted with permission from Alternet

The Trump Organization is facing an onslaught of charges in connection with alleged tax fraud, and according to legal experts and observers, the indictments handed down this week may only be the beginning of what's to come for the real estate corporation, according to Talking Points Memo.

Speaking with the publication, Brian Galle, a former DOJ tax prosecutor offered his assessment of the indictment. While prosecutors have been relatively tight-lipped about the case, he noted that the indictment did offer a few "hints."

According to Galle, "the document contained allegations that other, unnamed executives participated in the same income concealment schemes of which Weisselberg is accused, and that at least two other employees received the same benefits: free leases on Mercedes-Benz cars and rent-free apartments."

"This looks like a pretty standard tax evasion case like you'd see in a lot of family-owned businesses," Galle said. "You'd see senior executives taking corporate money for heir own personal use and not reporting it as income."

With so much to unpack due to all of the details in this complex case, legal observers have taken the time to dissect all that has transpired over the last couple of days. Bennett Gershman, a current Pace University law professor and former prosecutor for the Manhattan District Attorney's Office, offered his take on the preliminaries of the case and the indictments.

"This is a preliminary charging document, as I see it," Gershman said. "You've got an ironclad case against Weisselberg, an ironclad case against the Trump Org, and they want to make that very clear right out front."

Michael Shapiro, a prosecutor and New York City attorney held similar views as he shared his own assessment. While charges have been filed against Allen Weisselberg, the Trump Organization's chief financial officer (CFO), Shapiro noted that the ultimate goal remains the same: to bring down Trump and possibly members of his family.

"This is just a first step," said Shapiro. "The DA's office is not particularly interested in having their ultimate goal be Allen Weisselberg; their ultimate goal was to go after Trump and members of his family."

So what does the future hold for the Trump Organization, collectively? Shapiro noted that while the organization is at the center of the alleged tax fraud scheme, it may be virtually impossible to incarcerate everyone.

"The potential penalties to the Trump Org are relatively small — all that they could do to an organization is fine it, and make it pay restitution," Shapiro said. "And the potential fines and restitution, in this case, are at most hundreds of thousands or low millions of dollars, which even to the Trump Organization, is probably not a big hit."

Shapiro added, "You can't put an organization in jail."

So will Weisselberg flip on his longtime business acquaintance? Facing 15 counts in the alleged tax fraud scheme, some believe there is a strong possibility that he will, considering all that he has at stake. "If Weisselberg faces not only his own incarceration, but that of his children, if there's that possibility, it's hard to see see how he can be loyal to Trump and throw his children into the gutter," Gershman said. "But we'll have to wait and see."

‘A Scheme To Defraud’: Manhattan DA’s 15-Count Indictment Hits Trump Inc. And Weisselberg

Reprinted with permission from Alternet

On Thursday, Allen Weisselberg, chief financial officer for the Trump Organization, officially faced a grand jury indictment on criminal charges in connection with Manhattan District Attorney Cyrus R. Vance, Jr.'s financial investigation of former President Donald Trump's company. Weisselberg entered a "not guilty" plea to charges that include grand larceny, criminal tax fraud and falsifying business records.

The Trump Organization itself was also indicted; under New York State law, companies as well as individuals can be indicted on criminal charges. Donald Trump, however, has not been indicted so far.

The indictment in New York State v. the Trump Organization reads, "Beginning from at least 2005 to on or about June 30, 2021, the defendants and others devised and operated a scheme to defraud federal, New York State, and New York City tax authorities. The purpose of the scheme was to compensate Weisselberg and other Trump Organization executives in a manner that was 'off the books': the beneficiaries of the scheme received substantial portions of their income through indirect and disguised means, with 'compensation that was unreported or misreported by the Trump Corporation or Trump Payroll Corp. 10 the tax authorities."

New York State Attorney General Letitia James has announced:

Michael Cohen, Donald Trump's former personal attorney, told CNN:

CNN legal reporter Erica Orden explained:

Other major legal experts have been quick to respond to the charges that Weisselberg and the Trump Organization are facing. Here's what some of them they have been saying: