Trump directly implicated himself in the Trump Organization tax investigation with an offer to pay school fees, report says

Trump Tower

Donald Trump. Dominick Reuter/AFP via Getty Images

  • Trump has been connected to the Trump Org. tax investigation for the first time, per The Daily Beast.

  • A witness reportedly told investigators that Trump once offered to personally guarantee perks in lieu of taxable salary.

  • Trump has not been charged by the Manhattan DA so far.

  • See more stories on Insider's business page.

A cooperating witness in the Manhattan District Attorney investigation into the Trump Organization told prosecutors that former President Donald Trump personally offered to pay for perks in place of a taxable income, The Daily Beast reported, citing sources who heard the conversation.

The revelation could bolster any charges prosecutors would bring against Trump himself as part of a case that his company and its longtime CFO, Allen Weisselberg, have already been indicted for.

Manhattan prosecutors are currently investigating whether Trump Organization executives illegally took benefits without paying taxes on them, and whether the company engaged in tax and financial fraud.

Earlier in July, prosecutors announced a 15-count indictment accusing Weisselberg and the company of facilitating a scheme where he'd accept corporate gifts like apartments and tuition payments in lieu of higher salaries, thereby avoiding paying a chunk of taxes for both the company and its employees.

Two unnamed sources told The Daily Beast that they heard a June 25 interview between investigators and the witness, Jennifer Weisselberg, who is Allen Weisselberg's former daughter-in-law, in which she said that Trump personally guaranteed to pay school costs rather than give a raise, including tuition for her children. The outlet did not say how the sources were connected to the investigation. Jennifer Weisselberg's lawyer did not immediately respond to Insider's request for comment.

Charging documents prosecutors filed earlier this month said that Trump personally signed tuition checks for Allen Weisselberg's family members. The former president is referenced several times in the 25-page indictment. Jennifer Weisselberg is said to have told prosecutors that Trump said he would pay for her and Barry's children's education instead of giving Barry a raise, the Daily Beast report said.

In previous interviews with Insider, Jennifer Weisselberg said Allen Weisselberg would facilitate the payments, and that the Trump Organization would give perks in lieu of raises as a way to control employees' personal lives.

According to The Daily Beast, the agreement Jennifer Weisselberg recalled was made in January 2012 during a meeting at Trump Tower that included Trump, Jennifer Weisselberg, her then-husband Barry, and Allen Weisselberg. Barry Weisselberg is also a Trump Organization employee.

Jennifer Weisselberg told prosecutors that at one point in the 2012 meeting, Trump turned to her and said: “Don't worry, I've got it covered,” the sources told the Daily Beast.

Investigators also asked Jennifer Weisselberg, who is in the middle of ongoing litigation stemming from her 2018 divorce from Barry Weisselberg, if Trump was personally involved in the alleged scheme. Jennifer Weisselberg said he was, sources told The Daily Beast.

The Manhattan DA investigation is ongoing

The Manhattan DA's charged the Trump Organization and Allen Weisselberg earlier this month with 15 felony counts including a scheme to defraud, conspiracy, grand larceny, tax fraud, and falsifying business records.

The indictment includes evidence that indicates Trump was personally involved in covering his employees' children's tuition payments. From 2012 to 2017, the indictment says, “Trump Corporation personnel, including Weisselberg, arranged for tuition expenses for Weisselberg's family members to be paid by personal checks drawn on the account of and signed by Donald J. Trump, and later drawn on the account of the Donald J. Trump Revocable Trust, dated April 7, 2017.”

Prosecutors said that Weisselberg “intentionally” omitted the tuition payments from his personal tax returns even though he knew the payments “represented taxable income and were treated as compensation by the Trump Corporation in internal records.”

cyrus vance jr letitia james manhattan da trump organization allen weisselberg

Cyrus Roberts Vance Jr. District Attorney of New York County and New York State Attorney General Letitia James arrive in court for the hearing of Allen Weisselberg, former US President Donald Trumps company chief financial officer at the criminal court in lower Manhattan in New York on July 1, 2021. TIMOTHY A. CLARY/AFP via Getty Images

Weisselberg and the Trump Organization pleaded not guilty to the charges against them. Trump slammed the investigation as a “witch hunt.”

This month's indictment represents the first charges to come out of the Manhattan DA's three-year investigation into Trump's business dealings. But prosecutors said the inquiry is still ongoing, and legal experts told Insider that the charges may just be the tip of the iceberg where Trump is concerned.

“It's not going to be lost on Trump's lawyers that the government showed with this indictment how quickly they were able to put together what looks like a very solid case, considering how short a time they've had Trump and his company's records,” said Patrick Cotter, a former federal prosecutor who was on the team that convicted the Gambino crime boss John Gotti.

The allegation that Trump personally signed the tuition checks is unlikely to shift Trump's personal exposure to the investigation, according to Randy Zelin, a former New York state prosecutor. Trump has already given speeches where he has not challenged the underlying facts of the prosecutors' allegations.

donald trump allen weisselberg

Trump Organization chief financial officer Allen Weisselberg looks on as then-U.S. Republican presidential candidate Donald Trump speaks during a news conference at Trump Tower in Manhattan, New York, U.S., May 31, 2016. Carlo Allegri/Reuters/File Photo

Zelin said that, if the case were to go to trial, Trump would likely admit to paying for employees' tuition but say he expected other people to make sure the tax payments were in order.

“It could be something as simple as ‘Yes, of course, I agreed to have tuition covered as long as it's going to be done legitimately. And that's why I have accountants and CFOs and lawyers and, and professionals,'” Zelin, now a defense attorney at Wilk Auslander LLP, told insider.

Investigators could also bring charges against other Trump Organization employees, many of whom prosecutors said received the same type of untaxed benefits Weisselberg did.

“As prosecutors go through this evidence and threaten other company executives, they may not all be guys in their 70s” like Allen Weisselberg, Cotter said. “They might be in the prime of their life and they're going to think about the fact that they could go to jail for five, six, seven years if they get the wrong judge. Those are the guys that may have more motivation to cooperate.”

Alan Futerfas, the Trump Organization's lawyer, did not provide a comment to The Daily Beast. Liz Harrington, Trump's spokesperson, did not immediately reply to Insider's request for comment.

Read the original article on Business Insider

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