The Trump Organization was a grifters’ paradise that let top brass play with salary data to dodge taxes and even gave one executive’s wife a no-show job, New York prosecutors told jurors on Monday.
Donald Trump’s family company is on criminal trial for tax evasion, and prosecutors have already laid out clear-cut violations. But Trump Organization witnesses have maintained some level of ignorance of their illegal actions, even as they detail exactly how they broke the law.
The latest example came on Monday, when company controller Jeffrey S. McConney asserted that he still doesn’t know whether creating a fake job to let his boss’s wife skim $6,000 off the books was allowed.
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“I knew it wasn’t correct—wasn’t sure it was illegal… you can issue a paycheck to anybody who wants one,” he said matter-of-factly. “Is there a reason you can’t issue a payroll check to somebody who didn’t work there?”
“Did you think it was legal to pay her for a job she did not perform?” Manhattan Assistant District Attorney Joshua Steinglass asked.
“Uh, yeah. You could say that,” McConney finally relented.
The company that Trump used to launch himself into stardom and eventually catapult him to the White House is now on trial in New York City, accused of breaking the law by showering its former CFO with untaxed benefits. Last week, prosecutors revealed that arrangement extended far beyond just Allen Weisselberg, documenting how several other executives were able to artificially lower their pre-tax wages by diverting some of their pay toward luxury cars, high-end Manhattan apartments, and even categorizing huge chunks of their full-time salaries as “independent contractors.”
McConney testified that the Trump Organization only stopped providing tax-free condos and luxury cars for executives' wives after an outside lawyer, Sheri Dillon, was brought in to conduct an independent investigation.
Dillon was the lawyer who received brief national attention—in the form of a Saturday Night Live parody—because of the way she accompanied Trump onstage at a press conference days before his 2017 presidential inauguration to claim that Trump was divesting from his business empire. The stacks of manila folders they used as a prop were filled with white pages that appeared to be blank—and that they refused to show reporters.
The trial on Monday revealed that the CFO shifted $6,000 of his salary to his wife, Hilary Weisselberg, in what seemed like a bid to simply get her to qualify for benefits like taxpayer-funded Social Security. On more than one occasion, the company’s top financial officer would redirect his salary in a way that would score him cheaper prices and a lower tax bill. Jurors were shown a bill reflecting how Weisselberg used a company discount to buy $1,800 of electronics at a local P.C. Richards store—reducing his taxed salary.
But that frugal approach also extended to the way he treated blue-collar workers. McConney, sporting a broad smile beneath his white mustache, testified that his former boss was so cheap that he once harangued him for tipping too much on a business meal during a trip in Florida.
McConney recalled the way Weisselberg scolded him by saying, "Why are you spending 20 percent? I only leave 15. I don't know why you’re spending so much money."
"It’s the only example that I really remember, but that defines Allen,” McConney added.
But McConney’s willingness to trash his former boss wasn’t helping prosecutors. In fact, it was doing the opposite—playing right into the company’s legal defense strategy.
The Trump Organization’s defense lawyer, Susan Necheles, spent her time questioning McConney in a way that made all of the company’s financial shenanigans seem like the misadventures of a rogue CFO rather than the routine disregard for the law that has become synonymous with Trump’s ethos.
“Did anyone at the company other than the two of you know that Allen had done this?” Necheles asked about the no-show job for Weisselberg’s wife.
“No,” McConney responded.
“Why didn’t you tell anybody about this?” she followed up.
“Allen was my boss. Who was I going to tell? I wasn’t going to confront him with it. I wasn’t going to argue with him,” McConney said.
But his willingness to play along with his employer’s tale didn’t sit well with the judge. After hours of hearing McConney play dumb when confronted with the prosecutor’s questions and gladly answering Necheles’ every question in detail, Justice Juan Merchan excused the jury and witness from the courtroom and expressed his exasperation.
“I think it’s pretty clear to the average observer that he is very helpful to you,” the judge told Necheles. “He has a hard time giving very credible answers.”
“He basically refuses to speak English on direct examination,” the prosecutor complained. “Now I think it’s fairly clear, both from his demeanor and the answers that he’s giving... that he’s telling her whatever she wants to hear.”
Steinglass pointed out that McConney is, after all, still being paid $450,000 a year by the very company he’s testifying against and has his personal defense attorney being covered by the Trump Organization as well.
But it should be no surprise that McConney is what the legal profession deems a “hostile witness.” He was dragged before a grand jury in this case, confronted with possible tax fraud charges for helping his coworkers lie on their taxes, and offered an immunity deal as long as he testified at trial. Several observers in the courtroom noted that McConney seems to be stretching the limits of that deal, however, toeing a line that could cause prosecutors to renege on that deal.
The next big witness in the case—perhaps as soon as later this week—will be Weisselberg himself. He pleaded guilty in August and agreed to testify against his former employer.
This week is proving a decisive one for the future of Trump’s eponymous family company. Just as its accountant was on the witness stand in Manhattan’s criminal courthouse on Monday, a judge in the civil courthouse down the street appointed a special monitor to keep an eye on the company’s business operations.
The company faces a bank and tax fraud lawsuit from the New York Attorney General, and Justice Arthur F. Engoron appointed retired federal judge Barbara S. Jones to ensure the company doesn’t shift around its assets and become an empty shell before the $250 million lawsuit goes to trial. She is also tasked with ensuring the company doesn't keep engaging in fraud by lying to banks, insurance companies, and tax authorities.
Jones was previously appointed by other judges as the “special master” who oversaw the FBI seizures of documents from two of Trump lawyers, Michael Cohen and Rudy Giuliani, who were investigated for separate matters.
And at yet another courthouse on the very same New York street on Monday afternoon, Trump scored a win when a federal judge dismissed a Cohen lawsuit that claimed the 45th president used his extraordinary powers from the White House to retaliate against his former lawyer for writing a tell-all book by sending him back to prison.
U.S. District Judge Lewis J. Liman said Cohen’s lawsuit failed on a number of technicalities because he did not “properly allege a claim for abuse of process,” although he acknowledged that Cohen was quickly arrested and placed in solitary confinement for more than two weeks in a small cell that had “poor ventilation, no air conditioning, and temperatures frequently over one hundred degrees.”
Trump is set to formally announce his 2024 bid for the presidency even as legal experts predict he will eventually be indicted for his mishandling of classified materials.
