New York’s prosecutors will announce Thursday the first criminal indictment in a two year investigation into Donald Trump’s business practices. The indictment is against his namesake and its longtime finance chief for tax crimes related to fringe benefit for employees.
Two people familiar with the matter said that although the charges againstthe Trump Organization’s chief financial officer, Allen Weisselberg remained sealed Wednesday night, they were expected to be revealed ahead of an afternoon arraignment at Manhattan state court.
People were not allowed to talk about ongoing investigations and they did so under the condition of anonymity.
It was not clear that Trump would face charges at this stage, which was jointly pursued by New York Attorney General Letitia Jones and Manhattan District Attorney Cyrus Vance Jr.
Trump didn’t respond to reporters’ shouted queries about the New York case while he was visiting Texas on Wednesday,. However, earlier in the week the Republican had called New York’s prosecutors “rude and nasty, and completely biased” and stated that his company’s actions were “standard business practice in the U.S. and in no way a criminal offense.”
According to people familiar with the matter, the charges were linked to the benefits that the company providedto its top executives. These included school tuition, apartments, cars, and car use.
A spokesperson for Trump Organization and lawyers were contacted to provide comment. Mary Mulligan, Weisselberg’s attorney, declined to comment. The Manhattan district attorney’s office declined comment.
Vance, , who will be leaving office at the end the year, has been carrying out a wide-ranging investigation into various matters involving Trump Organization.
His office investigated hush money payments to Trump’s women and truthfulness in company property valuations, tax assessments and other matters.
Vance waged a long fight for Trump’s tax records. He has been subpoenaing documents, interviewing Trump executives, and conducting interviews.
James sent two lawyers from her own office to assist Vance’s team. Vance’s office discovered evidence of criminal wrongdoing during a separate civil investigation into Trump.
Weisselberg, aged 73, was under investigation partly because of questions regarding his son’s use, at no cost, of a Trump apartment.
Barry Weisselberg was the manager of a Trump-operated Central Park ice rink. He testified that it was a “corporate apartment” so there wasn’t rent.
Jen Weisselberg is Barry’s ex-wife and has cooperated with both inquiries. She gave investigators numerous tax records and other documents.
Prosecutors could use the case against Allen Weisselberg, a loyal lieutenant of Trump and his father, Fred, to force the executive to cooperate and tell them everything he knows about Trump’s business dealings.
Trump Organization is his business entity. It manages his numerous entrepreneurial ventures including his investments in office towers and hotels, as well as his marketing deals and television endeavors. Since Donald Trump’s election, his sons Eric and Donald Jr. have managed the company’s day to day operations.
While Trump is not expected to face charges Thursday, allegations regarding the company that bears his name raise doubts about his knowledge or involvement in business practices that prosecutors believe are illegal.
James Repetti is a Boston College Law School professor and tax lawyer. He said that a company such as the Trump Organization would have to withhold taxes on not only salary but also other forms of compensation, like rent or car use.
Repetti stated that such perks would not be considered income tax if they were required by employment. Repetti cited examples of employees who are required to travel long distances for work or for personal reasons.
Leona Helmsley (a prominent New York City realty figure), was convicted of tax fraud in federal court. This occurred because her company paid to remodel her house without her reporting it as income.
Trump Organization is being investigated for possible tax violations in New York.
Repetti stated that the IRS regularly looks for fringe benefits abuse when auditing closely-held businesses. The temptation for a business is to claim a tax deduction for an expense while the recipient doesn’t report it in income.