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When Allen Weisselberg took the stand for a second day to testify against several of Donald Trump’s eponymous companies, he described his and other company honchos’ efforts to scrub sketchy payment practices when his boss became president — by stopping an allegedly yearslong practice of providing untaxed benefits.
“We were going through an entire cleanup process at the company after Mr. Trump became president so that everything was done properly,” Weisselberg said Thursday in the Manhattan criminal trial against several Trump corporations. “When Mr. Trump became president and everybody was looking at our company at every different angle,” Weisselberg continued, they went through “all the practices we’d been utilizing over the years and … we corrected everything we had to correct.”
The eyebrow-raising payroll practices related to Weisselberg and others allegedly receiving untaxed benefits. By allegedly covering some loyal employees’ non-work expenses, rather than just paying them more, Trump’s companies could avoid additional payroll tax obligations.
Weisselberg’s testimony came about three months after he copped a plea deal to an indictment charging him with 15 counts for receiving some $1.7 million in untaxed benefits — including free housing and personal cars, as well as private school tuition for his grandkids.
Under Weisselberg’s plea deal, he was obligated to “testify truthfully” at the trial if called to do so. If Weisselberg holds up his end of the bargain, then his punishment would be about five months in jail.
If Weisselberg doesn’t, then he faces hard time in prison, Judge Juan Merchan warned at the plea proceeding. Weisselberg will not be sentenced until the conclusion of the trial, “to ensure compliance” with the plea agreement he also must pay about $2 million in unpaid taxes.
During Weisselberg’s plea proceeding, he made a dramatic admission, answering “yes, your honor” when Merchan asked whether he participated in a “scheme” with the Trump Organization and several related corporations “to defraud federal, New York state, and New York City tax authorities.”
Trump is not on trial, but the prosecution has closely tied this purported illegal conduct to him. During prosecutor Susan Hoffinger’s opening statement on Oct. 31, she said that from 2005 to 2017, “when most of the criminal conduct occurred,” these businesses were “owned by Donald Trump.”
In 2017, after Trump assumed the White House, the businesses in question “were still effectively owned by Donald Trump through a trust called the Donald J. Trump Revocable Trust,” Hoffinger alleged.
Prosecutors contended that Weisselberg’s longtime loyalty to Trump and his clan reaped dividends. Weisselberg lived in an Upper West Side apartment rent-free starting in 2005. The Trump Corporation leased the apartment, footed the bill, and also paid for his parking and utility fees, they said.
Trump’s company also allegedly covered the lease payments on two Mercedes-Benzes that Weisselberg and his wife used as their personal cars, and gave cash to Weisselberg around the winter holidays, so he could give people “personal holiday gratuities.”
During his first few hours on the stand Tuesday, Weisselberg’s testimony linked Trump to these financial shenanigans. Weisselberg said he could greenlight a small expense, but a large expense generally had to be approved by Trump.
Weisselberg told jurors during his first day of testimony that the Trump Corporation covered his utilities at the gratis pad. “It’s your understanding that was authorized by Mr. Trump?” Hoffinger questioned. Weisselberg said: “That was my understanding, yes.”
Did Trump cover the private school tuition personally? “Correct,” Weisselberg answered. He admitted that the nearly $2 million in benefits should have been taxed, but were not reported as income on his tax forms.
“Did you know at the time you owed taxes on those amounts, sir?” Hoffinger said.
“Yes,” Weisselberg responded. He also answered in the affirmative when asked whether the Trump Payroll Corporation should have included these benefits on his W-2s.
On Thursday, Weisselberg described efforts to make the books seem cleaner amid the possibility of heightened scrutiny.
Weisselberg described that he had documented how much the Trump Organization COO Matthew Calamari Sr. had received in sketchy benefits. This way, Weisselberg said, it wouldn’t exceed his salary and bonus deduction that allowed him to get these untaxed.
When Weisselberg was “cleaning up” everything, he allegedly told Calamari about this documentation. At some point, Weisselberg noticed it was gone from his drawer.
“What is your understanding about what happened to that list and those invoices?” Hoffinger asked. “Someone took it,” Weisselberg said.
Weisselberg said he didn’t know whether Calamari was behind its disappearance.
Weisselberg spoke simply during his time on the stand. Wearing a deep gray suit, bright white shirt, and lighter blue tie, his voice sometimes fell into a low mumble.
When cross-examination began, defense attorney Alan Futerfas hammered down the point that Weisselberg was personally responsible for these crimes — and crafted a narrative about familial deceit. Weisselberg looked increasingly worn as Futerfas’ cross-examination progressed.
Didn’t he watch the Trump kids grow up? Didn’t he grow with the company? Did he do this to save himself money?
“It was my own personal greed that led to this.”
“Did you honor the trust that was placed in you?” Futerfas asked later.
“I did not.”
“Did you betray the trust that was placed in you?”
“I did.”
“Are you embarrassed about what you did?” Futerfas pressed.
“More than you could imagine.”
“Ashamed?”
“Yes, very much so.”
Around this point, Weisselberg was red-faced and appeared on the verge of tears.
