03/12/2022

UDS-Biz

Growing Your Income

Trump Org begins turning prosecution witnesses to their own advantage in ‘politically motivated’ tax-fraud case

 

Former President Donald Trump, left, and the exterior of Trump Tower, where the Trump Organization is headquartered.Justin Sullivan/Getty Images, left. Nicolas Economou/Getty Images, right.

  • Trump’s real-estate empire is on trial in Manhattan on charges of conspiring to commit tax fraud.

  • In cross-examining the DA’s first witness, Trump’s side elicited testimony bashing the case.

  • ‘I just felt this was politically motivated,’ Trump Org. payroll exec told jurors of the case.

Trump Organization lawyers have begun in earnest their trial strategy of turning prosecution witnesses to their own advantage, on Thursday getting a key DA witness to rail against the “politically motivated” tax-fraud prosecution of Donald Trump’s business.

“Did you feel you were being treated unfairly?” by prosecutors, a defense lawyer asked the witness, Jeffrey McConney, the senior vice president in charge of payroll and tax filings for the former president’s real-estate and golf-resort empire.

McConney, hardly the model prosecution witness, remains on Trump’s payroll, making $450,000 a year; he has stopped meeting with prosecutors and is cooperating exclusively with the defense.

On the stand for his third day Thursday, he took the softball question — “were you treated unfairly?” — from Trump Organization attorney Susan Necheles and ran with it, just minutes into her cross-examination.

One prosecutor had been “grandstanding,” McConney complained to jurors, describing some eight “uncomfortable” appearances he had made before Manhattan grand jurors in the runup to the trial, back when he was cooperating in return for immunity from criminal charges.

“He was kind of being belligerent at times,” including in his “mannerisms,” McConney continued, not naming the offending prosecutor, who he said had brought a family member into the grand jury chamber as a spectator.

McConney had appeared before at least three Manhattan grand juries since 2019, when the district attorney’s office began probing Trump and his business in the wake of former Trump personal lawyer Michael Cohen’s congressional testimony about his then-boss’s alleged financial wrongdoing.

Now in its third week — and with maybe another month to go — the current payroll tax-fraud trial represents the only prosecution that Manhattan prosecutors have to show for that three-year investigation.

The indictment against the Trump Organization alleges that the company conspired for 15 years in a tax-dodge scheme that let McConney, then-CFO Allen Weisselberg and other executives pocket hundreds of thousands of dollars of their annual pay in such off-the-books perks as rent-free apartments and luxury cars.

Weisselberg pleaded guilty in August to dodging $900,000 in federal, state and city taxes and is expected to testify next week for the prosecution, though he, too, is still on Trump’s payroll and may also wind up helping the defense.

“I just felt this was politically motivated,” McConney told jurors on Thursday of how prosecutors treated him before he decided to stop cooperating. “I just felt uncomfortable up there at times,” he said of his grand jury testimony.

Crying “political vendetta” is a key defense against these tax-fraud allegations for Trump and his corporate lawyers.

McConney helped Trump Organization lawyers flesh out another key defense claim on Thursday, namely that the very top of the company — Donald Trump and his three adult children — did not condone or benefit from Weisselberg’s admitted scheme, and so that company itself can’t be held liable for it.

The defense case will show that “Weisselberg did it for Weisselberg” and not for anyone named Trump, one defense lawyer, Michael van der Veen, promised jurors repeatedly during opening statements last week.

McConney continued throughout Thursday’s cross-examination to help the defense keep its wagons circled protectively around the very top of the company, describing Weisselberg as an autonomous, buck-stops-here kind of boss.

“He was a micromanager,” McConney told jurors, and had ultimate approval over even small-dollar, routine expenditures.

More to that point, jurors then saw a letter that Trump’s longtime accounting firm, Mazars, sent to Weisselberg on February 6, 2014. In the letter, the firm describes Weisselberg as the company point man on all things tax-related.

“We understand that you are the person responsible for the tax matters of the Companies,” Mazars wrote to Weisselberg in the letter. “By your signature below,” Mazars’s letter to Weisselberg continued, “you acknowledge that you are responsible for management decisions and functions.”

Mazars severed ties with the Trump Organization in February after publicly questioning “discrepancies” in the Trump Organization’s finances.

Earlier Thursday, McConney finished his direct testim0ny under questioning by Joshua Steinglass, one of the Manhattan DA’s lead prosecutors.

Steinglass scored points for the prosecution by continuing to show jurors how Trump himself was directly involved in setting salaries and fringe benefits for top executives.

Jurors saw Trump’s initials on a 2012 memo, personally signing off on letting company COO Matthew Calamari get $72,000 a year of his salary in the form of rental payments on an apartment in a Trump-branded building on Manhattan’s Park Avenue.

Steinglass also elicited more testimony from McConney on what the prosecutor called a 2017 “clean up” of the company’s books. That year, Trump became president and the company hired an outside lawyer, Sherri Dillon, to go over its books.

The prosecutor reminded jurors again about McConney’s direct testimony from Tuesday, November 1. from just before McConney tested positive for COVID-19 over the lunch break, scuttling the trial for more than a week.

McConney at the time said he wasn’t at all sure if Trump taking office in 2017 had anything to do with the company suddenly stopping its long-time system of paying big chunks of its executives’ salaries in untaxed perks.

“Last week you testified that it was a coincidence that this clean-up took place in 2017,” Steinglass asked McConney.

“So the fact that Mr. Trump became president that year, do you still say that’s just a coincidence?” Steinglass pressed in one of his last direct questions.

McConney’s answer may leave jurors less than convinced.

“Nobody told me specifically,” McConney said, “that this change was because Mr. Trump became President Trump.

McConney’s testimony is expected to conclude with the last of the defense cross-examination and redirect questioning by prosecutors on Monday, following the three-day Veterans Day weekend. Weisselberg himself is expected to testify next week.

Prosecutors must prove that Trump’s company was in on Weisselberg’s admitted tax-fraud efforts. The company faces up to $1.6 million in fines if convicted.

Read the original article on Business Insider