Paul L. Caron
Dean




Wednesday, October 6, 2021

Trump Faces A Tax Reckoning In New York

The New Yorker, Trump Still Faces a Reckoning in New York:

Court documents and interviews indicate that the Manhattan District Attorney is accumulating evidence of pervasive tax fraud.

Last Monday, eighty days after their first courtroom appearance in a case known as The People of the State of New York v. The Trump Corporation, et al., the defendants’ lawyers walked down the hallway on the eleventh floor of the Manhattan Criminal Courts Building, ready to face the judge. The long, timeworn corridor was not crowded; far fewer reporters had gathered than during the initial court hearing, in July, when prosecutors unveiled fifteen felony charges, including tax fraud and grand larceny, against Donald Trump’s company and its chief financial officer, Allen Weisselberg. The packed hallway was so hot that day that someone had jammed a scrunched-up plastic water bottle under the door of the women’s bathroom, propping it open so a bit of cool air after a midday downpour could slip through a window within, past the cruddy stalls and beige-tiled floors and out into the corridor.

The diminished audience last week reflected a perception, aided by Trump’s lawyers, that the case is not all that serious, a sideshow. The alleged crimes committed by the Trump Corporation and Weisselberg relate to the conferring of privileges like luxury apartments, private schools, pricey cars, even parking spots. The word “perks” has slipped into news coverage of the case. But prosecutors have issued new subpoenas and are continuing to use the extensive powers of a New York grand jury to possibly add new charges and new defendants to the case. It’s not clear who those defendants are or what the charges may be. During last Monday’s court appearance, one of Weisselberg’s attorneys, Bryan Skarlatos, said, “We have strong reason to believe there could be other indictments coming.” He expressed concern that Weisselberg could become “collateral damage as part of a bigger fight between the Trump Organization and the District Attorney’s office.”

Even if no additional charges are filed, the former President’s company faces a potential reckoning. The charging documents and interviews with former prosecutors and white-collar defense lawyers indicate that the District Attorney is accumulating evidence of pervasive tax fraud. The case goes to the heart of what made—and still makes—Trump Trump. ...

People familiar with Trump’s legal battles also took notice of one element of the allegation: Weisselberg is described as making changes to something called “Donald J. Trump’s Detail General Ledger.” If true, the allegation would mean that, in addition to Weisselberg and Trump’s accountants keeping a set of records detailing the company’s finances, there was another ledger, one specifically maintained, the name implies, for Donald J. Trump. “My jaw literally dropped when I saw that,” Tristan Snell, a former New York assistant attorney general, who investigated claims of fraud against Trump University that resulted in a twenty-five-million-dollar settlement, said. “If there was a ledger for him, it blows up the notion that Trump didn’t know about it—it means there was a set of numbers prepared for Donald Trump.” Snell said the public disclosure of the separate ledger’s existence is a signal from the prosecutors to the former President: “We have your ledger.”

Before I read the indictment, I spent years trying to understand the inner workings of the Trump Organization, a small, privately held company with a long-running practice of avoiding disclosure. I’d assumed, like many others, that Trump had always managed to avoid liability in part because he didn’t write things down. But the indictment suggests otherwise. If Weisselberg and Trump’s company lose the case, it may be because Trump’s desire not to write things down was overtaken by his desire to make certain that he was not paying his longest-serving and most loyal aide any more than they had agreed upon.

https://taxprof.typepad.com/taxprof_blog/2021/10/trump-faces-a-tax-reckoning-in-new-york.html

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