The Tiny Scandals and Trials

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Thanks for posting @dry.

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N.Y. grand jury said to return criminal indictments against Trump’s company and its CFO, the first from prosecutors probing the former president’s business dealings

By
Shayna Jacobs, Josh Dawsey, David A. Fahrenthold and Jonathan O'Connell

June 30, 2021 at 7:59 p.m. EDT

NEW YORK — A grand jury in Manhattan filed criminal indictments Wednesday against former president Donald Trump's company and its longtime chief financial officer, according to two people familiar with the indictments.

The indictments against the Trump Organization and its CFO, Allen Weisselberg, will remain sealed until Thursday afternoon, leaving the specific charges against them unclear. Earlier Wednesday, people familiar with the case said the charges were related to allegations of unpaid taxes on benefits for Trump Organization executives.

Weisselberg is expected to surrender Thursday morning at the office of Manhattan District Attorney Cyrus R. Vance Jr. (D), two people familiar with the plan said. He is expected to be arraigned later in the day in front of a state court judge. The Trump Organization will also be arraigned, represented in court by one of its attorneys.

The criminal charges against the Trump Organization and Weisselberg are the first to result from the investigations by Vance and New York Attorney General Letitia James (D) and represent a dramatic turn in the long-running probes.

Attorneys for both the Trump Organization and Weisselberg declined to comment Wednesday.

Spokespeople for Vance and James — who teamed up to investigate Trump’s business dealings this year after years of working on separate tracks — also declined to comment.

Vance did not respond to a question from a reporter as he left his office Wednesday afternoon. The people familiar with the indictments spoke on the condition of anonymity to disclose private actions.

Trump himself is not expected to be charged this week, the people said, and no others in his orbit are expected to face imminent charges. But the indictments could mark a significant escalation in his legal problems — both by exposing his company to potential fines and by raising the pressure on Weisselberg. Prosecutors hope Weisselberg will offer testimony against Trump in exchange for lessening his own risk, according to another person familiar with the case.

Weisselberg, who has worked for Trump since the 1980s, is considered the most important figure in the Trump Organization who is not related to Trump. He has been involved in even minor financial transactions, including coordinating Trump’s personal gifts to charity.

The Washington Post has previously reported that Weisselberg was a key figure in the investigations by Vance and James. Both are trying to determine whether Trump broke the law by misleading lenders or taxing authorities, or by evading taxes on forgiven debts or fringe benefits for employees, according to court papers and people familiar with the cases.

In recent months, both sets of investigators have spoken to Jennifer Weisselberg, the CFO’s former daughter-in-law, who said that Weisselberg’s son Barry had been given a free apartment and a hefty salary while he worked at the Trump Organization’s Central Park ice rink.

The twin, and now merged, investigations of Trump’s company appear to be the longest-lasting and widest-ranging probes ever undertaken into the Trump Organization.

Both investigations appear to have been set in motion by an unlikely figure: Michael Cohen, who spent years as Trump’s attorney and aggressive defender. But Cohen turned on Trump in 2018 after pleading guilty to making hush-money payments during the 2016 presidential campaign to women who said they’d had affairs with Trump years before.

Vance’s office opened an investigation in 2018, responding to Cohen’s charges that Trump had directed the illegal payoffs. But Vance’s probe broadened beyond those allegations to encompass years of business transactions. Vance examined tax breaks Trump got on an estate in suburban New York, loans Trump took out on his Chicago tower, and statements Trump made to New York tax authorities about the value of his Manhattan towers, according to previous court filings.

The investigation became bogged down for much of Trump’s term, however, because of a long legal fight over his tax returns. Vance had sought them from Trump’s accountants in 2019, but Trump sued to stop him, saying that — as president — he was immune from investigation by any state-level prosecutor.

The case went to the Supreme Court twice; Trump lost both times. But Vance did not obtain Trump’s returns and other financial records — a cache including millions of pages of documents — until February 2021, after Trump had left office.

Now, the indictment sets up an unprecedented legal showdown between prosecutors in Manhattan and a powerful former president with an enduring grip on the Republican Party. Vance has said he will not seek reelection this year. That means the bulk of the case against Trump’s company could be handled by Vance’s successor.

Trump and his organization have never faced criminal charges, but he has been the target of civil lawsuits from the office of the New York attorney general. In one case, he was sued for allegedly defrauding students at Trump University. That case and others against Trump University ended with Trump paying a $25 million settlement in 2016. And in 2018, Trump was sued for misusing money in a charity he controlled, a case that resulted in a judge ordering Trump to pay $2 million in damages.


https://www.washingtonpost.com/politics ... story.html

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AND there was a perp walk.

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Just a side note:

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Kurt Eichenwald
@kurteichenwald

As someone who has written for decades about corporate crime, I was reading the Trump O/Weisselberg indictment going, "Yah, ok..hmm..yah..ok..Wait..HOLY (expletive)!" The Trump Org is in deep, deep trouble. And not because of the criminal charges. Because of its bank loan covenants.../1

...in fact, if even the smallest bit of this case is true, I think the Trump Org could be dead. It's complicated, but it primarily pertains to the 12th count of the indictment.

Taking this a step at a time: Like most real estate companies, the Trump Org is horribly illiquid...2

...this means it cannot readily convert its assets into cash as needed. Worse, because of the incredible incompetence and business idiocy of Trump, cash on hand (and access rapid loans through what is known as the commercial paper market) is small. So, the company survives.../3

...on loans against assets. Trump originally depended on bank loans, then jumped into high-yield (junk) bond market, which is why so many of his businesses went bankrupt: Junk bonds gave him lots of cash to spend, but he was too stupid to apply an analysis beyond "I'm great".../4

...to figure out how he was going to generate enough cash to pay interest on bonds. He couldn't. With his dad, he tried laundering money through Trump Castle to get past a requirement with his bank loans brought on by his junk debt, but got caught. Everything crashed down.../5

...so, the bottom line: Trump knows how to borrow money, he doesn't know how to manage it. Then came The Apprentice, which gave him lots of cash. Of course, he spent it all, then used assets he purchased as security to borrow from banks on apparent assumption that "I'm great"...6

...would fix any cash flow problems. He now has huge amounts of debt against assets that are plummeting in value because of January 6 and his toxic brand name. He *needed* the presidency to survive financially. I have always believed, that is why he is so desperate to keep it...7

....because if he was president, he could hit up the Russians, Saudis, etc to bail him out. Now, with him toxic and a threat to the country, those nations know that any secret payments they make to him run a huge risk of being discovered.

Which brings us to today's charges...8

...all bank loans with a business come with "lending covenants." These are basically a series of requirements, some of which include "you'll behave" in minor character. But *the most important part* of any loan covenant is the "books and records" portion. It is included in.../9

...every covenant for a bank loan to a business. The terms are simple: You maintain truthful books and records, you attest to us that they are truthful, and we are allowed to review them at any time. There is no "You can lie *just a little bit* on your books and records".../10

...it's all or nothing, like pregnancy: You either are or you arent. The books and records either are truthful or they aren't. Which brings us to count 12, which I think you can now understand the significance of:



...Forget Weisselberg. That is every every corporate defendant, every entity that could have a loan covenant in its name. Every Trump Org bank lender in the world, right now, is looking at this indictment, looking at their covenants, and calling the Trump Org demanding.../12

...they turn over every relevant book and record pertaining to these issues. If they refuse...BOOM. Loans pulled. If they do and the banks don't like what they see...BOOM. Loans pulled. If the loans come due (which 100s of millions do next year) no way they get refinanced..../13

...there may be something I am missing here, but I do not see how the Trump Org survives this without some sort of corrupt deal overseas. But even that seems far-fetched. Instead, it may be the biggest real estate corp bankruptcy in history..../14

......and given that those of us who covered his business for decades - back when he was a democrat/reform party/whoever would have him - and always knew he was a crook, all I can say is, what the hell took so long?
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Trump Organization and CFO Allen Weisselberg arraigned on multiple criminal charges as prosecutors alleged a 15-year tax fraud scheme

By
Shayna Jacobs, David A. Fahrenthold, Josh Dawsey and Jonathan O'Connell

July 1, 2021|Updated today at 4:13 p.m. EDT

NEW YORK — Prosecutors charged the Trump Organization with a 15-year "scheme to defraud" the government and its chief financial officer with grand larceny and tax fraud in a Manhattan courtroom on Thursday, describing what they said was a wide-ranging effort to hide income from tax authorities. .

In charging papers, prosecutors alleged that Allen Weisselberg, former president Donald Trump's longtime CFO, had avoided more than $900,000 in taxes by concealing the value of benefits he got from Trump's company — including a free apartment, free Mercedes-Benz cars, new furniture and tuition payments for his relatives.

In internal records, the Trump Organization treated these benefits as part of Weisselberg's compensation, prosecutors said. But it did not report them to taxing authorities, allowing Weisselberg and the company to avoid taxes, the documents said.

The indictment said that other, unnamed Trump Organization executives were given similar benefits. It also said that Weisselberg had orchestrated the scheme along with "others" at the company but did not name any of the others. Weisselberg was the only executive charged on Thursday.

Weisselberg, who has worked for the Trump Organization since the 1970s, pleaded not guilty during a brief arraignment hearing that began about 2:20 p.m. He walked into the courtroom in a dark suit, surrounded by detectives and court officers. He did not respond to questions from reporters in the hallway outside.

Weisselberg, 73, had surrendered at the Manhattan District Attorney's Office early Thursday, the morning after a grand jury filed indictments against him and the Trump Organization. He was released after the hearing, but he was required to surrender his passport after prosecutors said he was a "flight risk."

An attorney for the Trump Organization also pleaded not guilty on the company's behalf. Prosecutors also charged a subsidiary called Trump Payroll Corp., which handles the company's benefits and payments to employees.

In all, 15 criminal charges were filed against Weisselberg, according to a copy of the indictment obtained by The Washington Post. They included counts of conspiracy, criminal tax fraud and falsifying business records. In many of the counts, the two Trump entities were charged along with Weisselberg.

Carey Dunne, a prosecutor with the District Attorney's Office, said in the hearing that the charges were related to an "off-the-books tax fraud scheme" that lasted for 15 years. He said that the scheme allowed Trump Organization executives to get "secret pay raises" while not paying proper taxes.

"To put it bluntly, this was a sweeping and audacious illegal payment scheme," Dunne said. He rejected an allegation from the Trump Organization that the charges were part of a politically motivated effort to hurt Trump: "It's not about politics," Dunne said.

Trump Organization attorney Alan Futerfas, in comments outside the courthouse, said cases such as Thursday's are always resolved "in a civil context" — not a criminal one.

"We're all aware, all of you and all of us, are aware of the very significant financial crimes that have occurred by large financial institutions where this office did not take them on, did not prosecute, going back to the 2008 financial collapse of the United States," he said.

An attorney for Weisselberg, Mary E. Mulligan, said only that her side disputes the facts of the case. Earlier, in a statement on Weisselberg's behalf, she said he would "fight these charges."

These are the first charges to result from an investigation of Trump's company by Manhattan District Attorney Cyrus R. Vance Jr. (D) and New York Attorney General Letitia James (D). Both Vance and James were present in the courtroom for the arraignment, sitting one seat apart to observe social-distancing rules.

(...)

Weisselberg, who has worked for Trump since the 1980s, is considered the most important figure in the Trump Organization apart from Trump family members. The Washington Post has previously reported that Weisselberg was a key figure in the investigations by Vance and James. Both have scrutinized whether Trump misled lenders or tax authorities, or evaded taxes on forgiven debts or fringe benefits for employees, according to court papers and people familiar with the cases.

In recent months, both sets of investigators have spoken to Jennifer Weisselberg, the chief financial officer’s former daughter-in-law, who said that Weisselberg’s son Barry had been given a free apartment and a hefty salary while he worked at the Trump Organization’s Central Park ice rink. Prosecutors were looking into whether taxes were paid on the benefits, people close to the investigation said.

The now-merged investigations of Trump’s company appear to be the longest-lasting and most extensive prosecutorial examination ever undertaken of the Trump Organization.

Vance’s office opened an investigation in 2018, responding to former Trump attorney Michael Cohen’s charges that Trump had directed improper payoffs during the 2016 presidential campaign to women who said they had affairs with Trump.

But Vance’s probe then broadened, encompassing years of business transactions. Vance examined tax breaks that Trump got on an estate in suburban New York, loans Trump took out on his Chicago tower, and statements Trump made to New York tax authorities about the value of his Manhattan towers, according to previous court filings.

Vance did not seek reelection this year; that means the bulk of the case against Trump’s company could be handled by Vance’s successor.

Trump and his organization have never faced criminal charges, but Trump has been the target of lawsuits from the office of the New York attorney general.

(...)

https://www.washingtonpost.com/politics ... story.html

Read: Criminal indictments against the Trump Organization and its CFO, Allen Weisselberg
Updated Jul 1, 2021 at 2:41 PM

https://www.washingtonpost.com/context/ ... _manual_14

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