Trump Organization and its CFO charged with tax crimes

By Melissa Macaya, Melissa Mahtani, Maureen Chowdhury, Veronica Rocha and Fernando Alfonso III, CNN

Updated 7:39 p.m. ET, July 1, 2021

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6:21 p.m. ET, July 1, 2021

Here's what happened in the case against the Trump Organization and others

Allen Weisselberg appears in court in New York, Thursday, July 1. Steven Hirsch//Pool/New York Post/AP

Today in New York City, prosecutors charged the Trump Organization and Trump Payroll Corporation with 10 counts and chief financial officer Allen Weisselberg with 15 felony counts in connection with an alleged scheme stretching back to 2005.

Here is what happened:

The charges: The indictment charged the Trump Organization, Trump Payroll Corporation and Weisselberg. Prosecutors in court described a 15-year tax scheme and said the charges include 15 felony counts, including a scheme to defraud, conspiracy, grand larceny and falsifying business records.
All three plead not guilty: Weisselberg pleaded not guilty to the charges as did the Trump Organization and Trump Payroll Corporation. Prosecutors said that Weisselberg attempted to conceal his participation in the scheme with the knowledge of the company.
Just the start: New York Attorney General Letitia James issued a statement Thursday calling the indictment against the Trump Organization and Weisselberg an, “important marker in the ongoing criminal investigation.” “Today is an important marker in the ongoing criminal investigation of the Trump Organization and its CFO, Allen Weisselberg. In the indictment, we allege, among other things, financial wrongdoing whereby the Trump Organization engaged in a scheme with Mr. Weisselberg to avoid paying taxes on certain compensation. This investigation will continue, and we will follow the facts and the law wherever they may lead.”
Trump reacts: Former President Trump released a statement, casting the indictments against the Trump Organization and its CFO as part of a “political Witch Hunt.” "The political Witch Hunt by the Radical Left Democrats, with New York now taking over the assignment, continues. It is dividing our Country like never before!" the statement read.
Big money: According to the indictment, the company paid for rent, utilities and garage expenses on a Riverside Boulevard apartment that Weisselberg and his wife occupy. The indictment says the company maintained internal spreadsheets tracking the amounts it paid for Weisselberg’s rent, utilities and garage expenses, and that it accordingly reduced the amount of direct compensation to account for the expenses it was paying for him. The company didn’t withhold income taxes on the indirect compensation, and Weisselberg reported only his direct compensation on his tax returns, according to the indictment. Though Weisselberg began living in a Riverside Boulevard apartment rented by the company for him in 2005, he didn’t say he was a New York City resident on his taxes until 2013, when he sold his home in Wantagh, New York, thereby avoiding paying city income taxes, according to the indictment. Between 2005 and June 2021, prosecutors said that Weisselberg received indirect employee compensation from the Trump Organization in the approximate amount of $1.76 million, the indictment said.

7:39 p.m. ET, July 1, 2021

Trump Organization controller is the unindicted co-conspirator named in the indictment, source says

From CNN’s Kara Scannell and Sonia Moghe

Prosecutors allege the scheme was carried out by the company, Allen Weisselberg and an unindicted co-conspirator, who a person familiar with the investigation told CNN is Jeff McConney, the Trump Organizations long-time controller.

From March 2005 to present, the indictment alleges, “the named defendants and others, including Unindicted Co-conspirator #1, agreed to and implemented a compensation scheme with the object of enabling Weisselberg to underreport his income to federal authorities, and thereby evade taxes and falsely claim federal tax refunds to which he was not entitled.”

McConney, who has worked for the Trump Organization for decades, recently testified before the grand jury, CNN has previously reported. McConney was questioned about how the Trump Organization operates and asked about compensation, people familiar with the matter told CNN.

In New York state, individuals called before a state grand jury receive transactional immunity, meaning they would not be prosecuted for their testimony unless they lie.

McConney could not be reached for comment. A lawyer for the Trump Organization didn’t respond to requests for comment.

6:17 p.m. ET, July 1, 2021

These are some of the key players in the Trump Org investigation

From CNN's Alyssa Kraus, Erica Orden and Kara Scannell

New York prosecutors on Thursday charged the Trump Organization and its chief financial officer with a 15-year alleged tax scheme.

Though former President Trump has faced multiple federal and state prosecutorial inquiries during his administration, the district attorney's indictment is the first to charge his namesake company, the Trump Organization, for conduct that occurred when he led it.

Here are some of the key players in the case:

Allen Weisselberg: Weisselberg, the chief financial officer for the Trump Organization, surrendered to the district attorney's office this morning before the indictments were unsealed. The Manhattan district attorney's office charged Weisselberg with 15 felony counts in connection with an alleged scheme stretching back to 2005. All told, the indictment alleged, Weisselberg evaded taxes on $1.76 million in income over a period beginning in 2005 and concealed for years that he was a resident of New York City, thereby avoiding paying city income taxes. Weisselberg pleaded not guilty Thursday afternoon, and was released on his own recognizance and told to turn in his passport. The indictment of Weisselberg would intensify the pressure for him to cooperate with prosecutors in their wide-ranging investigation of Trump, the company and its executives, an outcome prosecutors have been seeking for months but which his lawyers have told authorities he has rejected. Investigators' scrutiny of Weisselberg began late last year, as prosecutors gathered evidence on him with the assistance of his former daughter-in-law. Weisselberg has worked for Trump since 1973.

Allen Weisselberg, chief financial officer for the Trump Organization, in New York on May 31, 2016. Carlo Allegri/Reuters

Cyrus Vance Jr.: Vance Jr., the Manhattan district attorney, is leading the indictment of the Trump Organization, as it was his probe that questioned the accounting practices tied to hush-money payments made by former President Trump's lawyer Michael Cohen. Vance Jr.'s probe eventually led to a Supreme Court fight over a subpoena for Trump's tax documents. Vance Jr. announced earlier this year that he would not be seeking reelection. The winner of the Manhattan DA Democratic primary is poised to take over the Trump investigation.

Manhattan district attorney Cyrus Vance, Jr. arrives at the New York State Supreme Court on July 1, 2021. John Minchillo/AP

Letitia James: New York State Attorney General Letitia James is working with Vance Jr. to investigate the Trump Organization. For the past two years, James' office looked into matters – including whether or not the company improperly inflated assets on financial statements to secure loans and obtain economic and tax benefits – as well as how Trump Organization employees were compensated. In a statement released Thursday after the indictments were announced against the company, James said "this investigation will continue, and we will follow the facts and the law wherever they may lead.”
Barry Weisselberg: Allen Weisselberg's son, Barry Weisselberg, received thousands of dollars in payments for cars, rent, tuition, medical bills and more, from his father, according to documents from his divorce with Jennifer Weisselberg in 2018. In addition, Barry Weisselberg worked for the Trump Organization for more than a decade and was involved in managing two skating rinks and a carousel in New York's Central Park.
Jennifer Weisselberg: The former daughter-in-law of Allen Weisselberg, Jennifer Weisselberg assisted prosecutors with gathering evidence after her divorce from Barry Weisselberg. She has turned over boxes of financial records and has met with investigators multiple times, her lawyer Duncan Levin told CNN. According to Jennifer Weisselberg, she and her ex-husband lived in apartments rent-free.

Jennifer Weisselberg, the former daughter-in-law of Allen Weisselberg, on July 1, 2021. CNN

Matthew Calamari and his son Matthew Calamari Jr.: Two individuals under scrutiny for receiving subsidized rent and company cars are Matthew Calamari, Trump's one-time security guard and chief operating officer, and his son, Matthew Calamari Jr. However, the investigation into the two men is not as advanced as the investigation of Allen Weisselberg.
Mary Mulligan: Mulligan is the attorney for chief financial officer Allen Weisselberg. She recently issued a statement saying her client "will fight these charges in court.”

Read more about the investigation here.

4:50 p.m. ET, July 1, 2021

Trump Organization says charges "all about politics"

From CNN's Kara Scannell

In a statement released Thursday afternoon, a spokesperson for the Trump Organization writes, "Make no mistake – this is not about the law; this is all about politics.”

The statement goes on to call the charges from the Manhattan District Attorney a “political vendetta.”

“The District Attorney will try to convince the public that these charges are of great significance. However, everyday New Yorkers and Americans know exactly what this is: an inappropriate use of a local prosecutor’s vast and unchecked power to target a political opponent,” the statement reads.

New York prosecutors on Thursday charged the Trump Organization, Trump Payroll Corporation and Chief Financial Officer Allen Weisselberg with 15 felony counts in connection with an alleged tax scheme stretching back to 2005.

5:51 p.m. ET, July 1, 2021

Prosecutors say Trump Org gave Weisselberg approximately $1.76 million in untaxed compensation

From CNN’s Erica Orden and Sonia Moghe

According to the indictment, the Trump Organization company paid for rent, utilities and garage expenses on a Riverside Boulevard apartment that chief financial officer Allen Weisselberg and his wife occupy.

The indictment says the company maintained internal spreadsheets tracking the amounts it paid for Weisselberg’s rent, utilities and garage expenses, and that it accordingly reduced the amount of direct compensation to account for the expenses it was paying for him. The company didn’t withhold income taxes on the indirect compensation, and Weisselberg reported only his direct compensation on his tax returns, according to the indictment.

Though Weisselberg began living in a Riverside Boulevard apartment rented by the company for him in 2005, he didn’t say he was a New York City resident on his taxes until 2013, when he sold his home in Wantagh, New York, thereby avoiding paying city income taxes, according to the indictment.

Between 2005 and June 2021, prosecutors said that Weisselberg received indirect employee compensation from the Trump Organization in the approximate amount of $1.76 million, the indictment said.

Over that span prosecutors say Weisselberg “thereby evaded approximately $556,385 in federal taxes, approximately $106,568 in state taxes, and approximately $238,159 in New York City taxes, and he falsely claimed and received approximately $94,902 in federal tax refunds and approximately $38,222 in state tax refunds, to which he was not entitled.”

More details: The indictment alleges the tuition payments were part of a “scheme to defraud” and that Trump Organization personnel, including Weisselberg, arranged for the tuition payments for Weisselberg’s family members.

Jennifer Weisselberg, Allen Weisselberg’s former daughter-in-law, previously told CNN she believed Trump paid for tuition for her two children to attend the elite private school Columbia Grammar & Preparatory School, and that she shared this information with prosecutors.

Prosecutors allege in the indictment that the payments for Weisselberg’s grandchildren were “indirect compensation” and were not included on Weisselberg’s W-2 forms, and that no income taxes were withheld by the Trump Organization or Trump Payroll Corp. in connection with the tuition payments.

“Weisselberg intentionally caused the tuition payments to be omitted from his personal tax returns, despite knowing that those payments represented taxable income and were treated as compensation by the Trump Corporation in internal records,” the indictment stated.

5:52 p.m. ET, July 1, 2021

Trump reacts to indictment against his company and CFO

Former President Trump just released a statement, casting the indictment against the Trump Organization and its CFO as part of a “political Witch Hunt.”

"The political Witch Hunt by the Radical Left Democrats, with New York now taking over the assignment, continues. It is dividing our Country like never before!," the statement reads.

More on the charges: New York prosecutors today charged the Trump Organization, Trump Payroll Corporation and its Chief Financial Officer Allen Weisselberg with 15 felony counts in connection with an alleged tax scheme stretching back to 2005, in an extraordinary legal development against the former President's namesake company.

Prosecutors in court said the counts include a scheme to defraud, conspiracy, criminal tax fraud, offering a false instrument for filing and falsifying business records.

Trump himself was not charged.

CNN's Michael Warren, Erica Orden and Kara Scannell contributed reporting to this post.

3:41 p.m. ET, July 1, 2021

Michael Cohen: Allen Weisselberg's head is "on the chopping block"

From CNN's Maureen Chowdhury

Michael Cohen, former personal attorney to Donald Trump, said Trump Organization CFO Allen Weisselberg's head is "on the chopping block" following indictments filed against him and the company.

"What you're going to find is that Allen Weisselberg is in substantially greater jeopardy than he was last night," Cohen told CNN's Alisyn Camerota.

"That feeling of the handcuffs or shackles or however else they paraded him through, that's real and he knows the reality now a lot greater than he did yesterday," he said.

Cohen who was sentenced to time in federal prison for crimes that included arranging payments during the 2016 election to silence women who claimed affairs with Trump, said that he believes that Weisselberg should be prepared for Trump to eventually stop supporting him.

"What you have right now is Allen Weisselberg's head on the chopping block. Do you think that Donald Trump will protect him? Well, if Allen looks back at what happened to me, the answer is an emphatic no," he said.

Cohen also noted that he believes Trump's "nine lives" are up and that he can no longer avoid accountability.

"I think his nine lives have expired, because the documentary evidence that's in the hands of the prosecutors is so significant and so spot-on that there's no way anybody's getting out of it," Cohen explained.

Watch here:

5:53 p.m. ET, July 1, 2021

Prosecutors handed electronic storage devices over to defense lawyers

From CNN’s Kara Scannell

Prosecutors handed electronic storage devices over to defense lawyers — one to attorneys for the Trump Organization and the other to a lawyer for chief financial officer Allen Weisselberg.

Weisselberg’s passport was turned over in person

5:54 p.m. ET, July 1, 2021

Weisselberg released on his own recognizance and told to turn in his passport

From CNN’s Sonia Moghe

Allen Weisselberg, Trump Organization CFO, leaves Manhattan Criminal Court after his arraignment in State Supreme Court on July 01. Michael M. Santiago/Getty Images

Trump Organization chief financial officer Allen Weisselberg was released on his own recognizance and told to turn in his passport.

After the hearing, he walked out of the courthouse and into a waiting SUV.

Earlier today: The indictment, which has just been unsealed, charges the Trump Organization, Trump Payroll Corp. and Weisselberg with 15 felony counts in connection with an alleged scheme stretching back to 2005 “to compensate Weisselberg and other Trump Organization in a manner that was ‘off the books.’”

The three are charged with a scheme to defraud, conspiracy, criminal tax fraud, and falsifying business records.

Weisselberg is also charged with grand larceny and offering a false instrument for filing.