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Trump Org. attorneys point fingers at former CFO in closing arguments of fraud case

<i>Beata Zawrzel/NurPhoto/Shutterstock</i><br/>The Trump Tower in Midtown Manhattan
Beata Zawrzel/NurPhoto/Shutterst
Beata Zawrzel/NurPhoto/Shutterstock
The Trump Tower in Midtown Manhattan

By Lauren del Valle and Kara Scannell, CNN

Closing arguments began Thursday in the Trump Organization tax fraud trial, where defense attorneys blamed the alleged criminal tax schemes on former CFO Allen Weisselberg, who’s already pleaded guilty to 15 counts in the case.

“Weisselberg did it for Weisselberg,” defense attorney Michael van der Veen told jurors Thursday — a mantra defense attorneys have recited throughout the trial.

The crux of the trial against two Trump Organization entities ultimately asks the jury to decide whether Weisselberg and the company controller acted illegally with some intent to benefit the company, defense attorney Susan Necheles told the jurors Thursday morning. She acknowledged the defense team and prosecutors aren’t in dispute over most of the illicit acts alleged in the case, but instead disagree about whether the company is criminally liable for its employees’ crimes.

“Does the evidence prove beyond a reasonable doubt that when Allen Weisselberg cheated on his personal tax returns, and when Jeffrey McConney helped him to do that, that Allen Weisselberg or Jeffrey McConney had some intent to benefit the Trump Corporation,” Necheles said, referring to the Trump Organization’s controller. “You are going to see there was no such intent.”

Getting at a technicality in the statutes at issue in this case, the defense attorney also told the jury they should not consider McConney a “high managerial agent” for the company because he was micromanaged by Weisselberg who really ran the show.

“The purpose of Mr. Weisselberg’s crimes was to benefit Mr. Weisselberg,” Necheles said. “He admitted under oath these crimes were a result of his own greed.”

Two Trump Organization entities are charged with tax fraud and falsifying business records in what prosecutors allege was a 15-year scheme to defraud tax authorities by failing to report and pay taxes on compensation provided to employees.

Weisselberg pleaded guilty in August for failing to pay taxes on approximately $1.7 million in off-the-books compensation he received in the form of a company-funded apartment in New York City and other expenses.

“He helped grow the Trump Organization into the company that it is today but along the way he messed up. He got greedy,” the defense attorney said. But Weisselberg hid his crimes from the Trump family, she said.

“He knew he was doing something wrong and was ashamed of it and kept it secret,” Necheles said.

Necheles stressed that Donald Trump never knew about Weisselberg’s schemes and trusted the longtime employee so much that the former president named him as a trustee on his Revocable Trust created when he took office.

The defense attorney also noted that Mazars USA, the accounting firm that prepared the organization’s taxes, and its lead accountant Donald Bender never flagged any illicit conduct to the company owners, the Trump family.

Weisselberg, who pleaded guilty to 15 counts in this case and will serve some jail time, is now “atoning for his sins,” Necheles said. The plea deal also required his testimony at trial, she reminded the jury.

“He’s worried that he’s going to be going to Rikers Island,” she said. “He’s worried that he could get far more time if the prosecutors accuse him of lying.”

“The prosecution forced him to testify against the company he helped to build,” Necheles said.

Weisselberg never calculated the monetary benefit the company would garner from his schemes the way he meticulously tracked his own personal taxes, the defense attorneys said.

“He obsessively planned his own personal taxes, figuring out in dishonest and honest ways how to pay the least tax possible,” Necheles said.

Van der Veen spoke on behalf of the Trump Payroll Corporation midday Thursday.

The defense attorney accused prosecutors of levying the charges against the two Trump Organization entities because Weisselberg wasn’t enough. “They wanted something with the Trumps attached to it,” he said.

Van der Veen noted that that prosecutors did not show any corporate tax returns for the company defendants, only personal tax returns for Weisselberg. The trial evidence has proven Weisselberg’s greed but not that of the company, the attorney said.

“It has showed us that Weisselberg is a flawed man with a very human story,” van der Veen said.

The Trumps trusted the longtime employee to take care to avoid situations like the criminal charges at issue in this trial, the defense attorney said.

The Trump Payroll Corporation is a “pass through” entity used to pay Trump employees and always ends with zeroed out balances, van der Veen said. “It has no gain. It never will.”

Van der Veen also noted that any payroll tax savings the company could have conceptually benefited from via Weisselberg’s tax schemes would be minimal in comparison to the company’s massive expenditures, including more than $250 million in payroll over eight years.

‘A culture of fraud’

Prosecutor Joshua Steinglass began his closing arguments Thursday afternoon, telling jurors that the Trump Organization “cultivated a culture of fraud and deception” by lavishing perks on executives and not reporting the fringe benefits to tax authorities.

The company aimed to put “more money in executives’ pockets while keeping their own costs as low as possible,” Steinglass said.

The prosecutor summed up the company’s benefits from alleged schemes as a “win-win.”

“They pay less, and the executives take home more,” Steinglass said. “That’s conspiracy.”

Over the years, the companies saved hundreds of thousands of dollars in unpaid Medicare taxes and raises they didn’t have to give their executives, the prosecutor said, pushing back on the defense’s efforts to pin the schemes solely on Weisselberg.

“Here, Allen Weisselberg’s interests and the corporations’ interests are in perfect alignment. The scheme to defraud wasn’t a betrayal of the Trump Corporation — it was done in cahoots with the Trump Corporation,” Steinglass said.

Steinglass acknowledged Weisselberg’s tightrope walk at trial, faced with his allegiance to the company and his plea deal with the state. He suggested Weisselberg might not be the prodigal son to his longtime employer as the defense attorneys have described but rather chasing his January bonus check the company is “dangling” to keep him close until the end of the trial.

“Don’t say too much, Allen, or you won’t get that half (million dollars) — you know you need to pay back the state now,” Steinglass mocked.

Steinglass also pushed back on the defense narrative that McConney was just a micromanaged employee of Weisselberg and couldn’t be considered a “high managerial agent” in the alleged tax schemes — a key element under debate in the trial.

The company controller acknowledged he knew some tax acts he did for Weisselberg were illegal at the time, Steinglass reminded the jury.

“He knew he was cooking the books, and he did it anyway,” he said.

Steinglass showed the jury a spreadsheet that detailed the compensation with 1099 bonuses for Weisselberg and other high-level executives, including the fringe benefits not reported on tax documents.

The spreadsheet should be called “‘How I did it,’ by Jeff McConney,” Steinglass quipped.

The prosecutor wondered aloud whether the fraud would have ever been detected, had McConney not put it in writing.

McConney, however, was an unreliable witness on the stand, clearly favoring the defense team during his testimony, Steinglass said.

The company controller never reported to Trump the fraudulent business practices he claimed Weisselberg put him up to because he assumed the company owner already knew, Steinglass suggested to the jury.

“He undoubtedly knew what you all must at least suspect — that Donald Trump knew exactly what was going on with his top executives,” Steinglass said.

Trump Organization executives like Weisselberg and McConney started to “clean up” the company’s internal business practices in 2016, around the time Trump was first running for president and ultimately took office. The defense has maintained the Trump family didn’t learn of the questionable accounting practices until an internal audit around that time.

Steinglass also said the defense team is scapegoating Bender, the Mazars accountant, who testified that he didn’t know Weisselberg underreported his taxable income for years.

“If you want to keep committing tax fraud you don’t ask your accountant for his blessing,” Steinglass said.

The prosecution will continue its closing arguments Friday morning. Judge Juan Merchan has said the jury could get the case next Monday.

This story has been updated with additional developments.

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