Faced with an indictment of his family’s business empire for criminal tax fraud, former President Donald Trump previewed a defense strategy—of sorts—over the weekend: ignorance of the law.
“I don’t even know. Does anybody know the answer to that stuff?” he shrugged on Saturday, in front of adoring fans at a political rally in Sarasota, Florida.
The twice-impeached former president’s remarks provoked a flurry of reactions from some legal commentators and pundits, who saw a besieged client running his mouth in public, and potentially undermining his legal team’s carefully manicured strategies.
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But Trump wasn’t so much upturning his legal defense as much as he was delivering his sloppy rendition of it.
According to two people familiar with the matter, lawyers representing him and the Trump Organization are preparing to include this very point in court arguments, given how much the specific intent of an individual matters in areas of New York tax law.
And yet, there is a good chance that working this angle in a court of law will not go well for Trump or his organization.
Former prosecutors and defense lawyers who have tried criminal tax cases in New York City told The Daily Beast that Trump, his family, and company executives face a steep hill—and it’s mostly due to Trump himself.
“To a certain extent, not knowing the law is a defense… It's one of the only defenses in a case like this,” said Tess Cohen, a former New York prosecutor. “But I have trouble believing that’ll get very far.”
That’s because, for years, Trump has called himself “king of the tax code.”
“Nobody knows the tax code better than I do… I'm like a student of the tax code,” he said during a 60 Minutes interview in 2015. He repeated that sentiment on MSNBC and later told supporters in Tampa: “I know more about taxes than any human being that God ever created.”
Trump’s attorney Ronald Fischetti did not respond to requests for comment on this story.
Should this investigation make its way to trial, prosecutors with the Manhattan district attorney and New York State attorney general would certainly want to question Trump under oath for hours, legal scholars said. The result would be “devastating” for his defense, said Carl Bornstein, a former New York prosecutor who now teaches at John Jay College of Criminal Justice.
“Those prior inconsistent statements will undermine his claim of lack of knowledge on cross-examination,” he said.
Behind the scenes, the ex-president has insisted that New York prosecutors are also out to hurt his business and to try to poison the Trump Organization’s dealings with other companies. In the past few weeks, Trump has encouraged people close to him to publicly claim that his family business is thriving, according to two people familiar with his request.
In recent private conversations, the former president has lamented that further investigation into him and others at the Trump Organization could potentially stretch on for years, adding to his hefty and growing pile of legal bills.
As Trump continues to weigh running for president again in 2024, any increased pressure or potential indictments from New York prosecutors could hobble another lengthy campaign. Still, several longtime advisers to Trump have reassured him that the vast core of Republican voters will not abandon him, should he choose to run again, and that the probes in his home state merely reinforce their devotion.
“The numbers don’t change. Rock solid,” John McLaughlin, who worked as one of Trump’s top pollsters during the 2016 and 2020 campaigns, said, citing his own recent polling data. “Attacks on President Trump galvanize his base.”
Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James accuse the Trump Organization and its chief financial officer, Allen Weisselberg, of scheming to avoid taxes for more than a decade by reducing official employee income and replacing it with perks that weren’t reported to the government.
When the IRS hunts someone down for refusing to pay their taxes, government lawyers don’t have to show intent. But this legal battle is taking place in New York, where state laws require prosecutors to prove that someone was “willfully engaging” in tax fraud.
It’s a higher bar, but not an insurmountable one—especially when it seems that investigators have specific documents that would indicate a concerted effort to conceal the truth.
The 25-page indictment says investigators have “internal spreadsheets” that show exactly how unreported perks replaced employee income, Cohen, the former New York prosecutor, noted.
“Simultaneously, the Trump Organization reduced the amount of direct compensation that Weisselberg received in the form of checks or direct deposits to account for the indirect compensation that he received in the form of payments of rent, utility bills, and garage expenses,” the indictment claims.
“You can’t get much better evidence than that,” Cohen said.
Weisselberg, known for having a three decade-long loyalty to Trump, pleaded not guilty last week and shows no signs of turning on his boss. If his criminal case goes to trial, legal scholars said, smart prosecutors would lean heavily on the idea that the company’s complex payment system only makes sense as a tax-dodging scheme.
“A prosecutor can say: ‘It’s much easier to pay someone by writing them a check for a million than pay them half a million and pay them in all these other ways,’” said Cohen, now a lawyer at the law firm ZMO Law.
Although Trump himself was not implicated in last week’s indictment, two witnesses who testified before the Manhattan grand jury told The Daily Beast that prosecutors are still investigating the former president.
The Manhattan DA and state AG have yet to file charges about alleged bank fraud and tax dodging involving Trump’s properties in the metropolis, upstate New York, and elsewhere. If investigators do charge Trump himself, another hurdle would be for the government to prove that Trump is involved.
For that, prosecutors could point to a 2007 deposition in which Trump laid out how closely he works with Weisselberg on company financial statements about property values—including two under investigation: the 40 Wall Street building in Manhattan and the Bruce Wayne-style Seven Springs estate north of the city.
"I think my numbers are pretty in line of [sic] what he says,” Trump testified about his work with Weisselberg. “He shows me what he ultimately comes up with and I—I'm not sure I ever said change this number or change that number. He shows me. We'll talk about it. He'll do it. And he'll show me, before we go to the final drafts and put down everything...”
Bornstein, who spent years prosecuting members of the mafia in New York City, acknowledged that these types of complex financial crime investigations are notoriously difficult to prove in court. But he stressed the mountain of evidence is already there.
“They have to prove this was intentional and purposeful,” he said. “But the purpose in a financial crime... need only be to make the money... to get ahead of the tax provisions, to come out better financially.”
