5 Takeaways From The Trump Organization’s Indictment

A grand jury indicted the Trump Organization and its chief financial officer, Allen Weisselberg, Thursday, accusing them of running a scheme that helped executives avoid taxes on nearly $1.8 million of compensation for about 16 years. 

The Trump Organization and Weisselberg both pleaded not guilty. In a statement, Weisselberg’s attorneys said their client would fight the charges. The Trump Organization has not replied to an inquiry.

Here are five takeaways from the 25-page indictment. 

1. The government claims the Trump Organization kept records of the alleged fraud

Prosecutors claim that the Trump Organization mischaracterized some outlays to Weisselberg on corporate records, including its general ledger. For example, cash the company reportedly paid to Weisselberg for his personal use was categorized as “holiday entertainment.” According to the indictment, the Trump Organization maintained internal spreadsheets to track some of its payments to Weisselberg (including for his rent, utilities, and garage access), even though it didn’t disclose those as part of his compensation on tax filings.

2. The alleged scheme does not appear to have saved Weisselberg much money

The Manhattan DA alleges that from 2005 through 2021, Weisselberg received about $130,000 in ill-gotten tax refunds and evaded approximately $900,000 in taxes, about $60,000 a year. It’s not chump change, for sure. But for a senior corporate executive earning about $1 million a year, it seems like a lot of risk (and work) for not much of a payoff.

(Of course, Weisselberg’s boss is a billionaire who once cashed a check for 13 cents.)

3. Weisselberg is not the only Trump employee investigators have been scrutinizing

While the indictment doesn’t name any Trump employees other than Weisselberg, it alludes to several of them.

Most notably there’s “Unindicted Co-conspirator #1,” who is accused of underreporting Weisselberg’s taxable income in 2009. (Citing a person familiar with the case, CNN reported this co-conspirator is Jeff McConney, the Trump Organization’s controller.)

Additionally, the indictment refers to “other Trump Organization executives,” including two who, like Weisselberg, allegedly failed to pay New York City income taxes and report compensation received in the form of lodging. The prosecutors also mentioned a Trump Organization employee who cashed corporate checks, handing the money over to Weisselberg for his personal use. 

And Thursday’s court filing referenced at least three of Weisselberg’s family members, including one who was employed by the Trump Organization.

4. One aspect of the alleged scheme was particularly complex

The Manhattan DA claims that the Trump Organization paid Weisselberg a substantial part of his annual year-end bonus in a way that allowed him to report it to the IRS as self-employment income (rather than employee compensation). Because Weisselberg characterized the funds in that manner, he was able to make annual contributions to a tax-deferred pension, called a Keogh plan, which is only available to self-employed taxpayers. As a result, the government maintains that, over four years, Weisselberg pitched in about $215,000 to his Keogh plan that he was not lawfully permitted to contribute.

5. Federal officials trusted a company that’s now indicted for tax fraud

The Trump International Hotel Washington, D.C. is located in the Old Post Office, which the Trump Organization rents from the U.S. government. The lease calls for monthly payments of $250,000, as well as a percentage of the gross revenue if certain financial performance thresholds are met. In September 2019, a senior official with the General Services Administration testified to a House committee that the agency, which oversees the lease, had never audited the hotel’s financial reports. That suggests that the government was simply trusting the Trump Organization, which was indicted Thursday for criminal tax fraud, to pay taxpayers what it rightfully owes.