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- The Trump Org. illegally labeled cash it paid to CFO Allen Weisselberg as "Holiday Entertainment," Manhattan prosecutors said.
- But it maintained internal spreadsheets "showing the cash to be part of Weisselberg's employee compensation," the indictment said.
- Weisselberg and the Trump Org. were charged with 15 felony counts on Thursday.
- See more stories on Insider's business page.
The Trump Organization illegally labeled cash that it paid to CFO Allen Weisselberg as "Holiday Entertainment" in its official books, but kept spreadsheets showing that the money was in fact part of Weisselberg's compensation, Manhattan prosecutors alleged on Thursday. It was one of multiple instances the district attorney's office laid out showing how Weisselberg and the Trump Organization allegedly evaded paying taxes.
In a sweeping 25-page indictment against Weisselberg and the Trump Organization, prosecutors charged them with 15 felony counts including scheme to defraud, conspiracy, grand larceny, tax fraud, and falsifying business records.
The indictment said that Weisselberg "caused the Trump Corporation," which is the same entity as the Trump Organization, "to issue corporate checks made payable to a Trump Organization employee who cashed the checks and received cash."
"The cash was given to Weisselberg for his personal use," the document said. "The Trump Corporation booked this cash as 'Holiday Entertainment,' but maintained internal spreadsheets showing the cash to be part of Weisselberg's employee compensation."
The Trump Organization also had internal spreadsheets documenting the amount it paid for Weisselberg's rent, utilities, and garage expenses, though it did not include those payments as employee compensation in the company books, the indictment said.
The Manhattan district attorney's office alleged that beginning in 2005, Weisselberg signed rental checks drawn from the Trump Organization's bank account and directed the company to "issue checks to pay for Weisselberg's utility bills" for an apartment on Riverside Boulevard, "including payments for electricity, telephone services, internet, and cable television service." The Trump Organization also paid for Weisselberg's monthly garage bills at this time, the indictment said.
Prosecutors went on to say that the company's payments for Weisselberg's expenses constituted "employee compensation" and counted as taxable income for Weisselberg. "These payments were not booked in the Trump Corporation's general ledger as employee compensation, but were instead labeled and deducted as 'rent expense' in the general ledger," the indictment said.
"However, for certain years, the Trump Organization maintained internal spreadsheets that tracked the amounts it paid for Weisselberg's rent, utility, and garage expenses," prosecutors alleged. The Trump Organization simultaneously reduced Weisselberg's direct compensation to account for the "indirect compensation" he received via payments for his rent, utilities, and garage expenses, they said.
This compensation was not documented in Weisselberg's W-2 forms or reported to federal, state, or local tax authorities, the indictment said, and no income taxes were withheld in connection to it. Prosecutors accused Weisselberg of intentionally omitting the indirect compensation he received from his personal tax returns despite knowing that they constituted taxable income and were treated as such in the Trump Organization's internal spreadsheets.
Overall, the indictment said, Weisselberg failed to pay taxes on approximately $100,000 in compensation per tax year from 2005 through 2017. In that time period, the Trump Organization provided Weisselberg roughly $1,174,018 in untaxed income in connection to the rent, utility, and garage expenses.
Weisselberg and the Trump Organization pleaded not guilty to the 15 charges brought against them on Thursday, and the Trump Organization released a lengthy statement accusing prosecutors of a political vendetta. Trump himself issued a short statement saying that "Radical Left prosecutors" were out to get him and his supporters.
Trump's former lawyer and longtime fixer, Michael Cohen, took a different view, however, telling Insider that Weisselberg should strike a plea deal.
"Weisselberg now knows what handcuffs feel like as well as being placed in a cell," he said. "As the pressure by prosecutors increase on him and his sons, the smart money would be on him cooperating for leniency."
