Trump Org. stopped illegal tax practices when Donald Trump took office, former CFO testifies – CNN

CNN  — 

The Trump Organization stopped several illegal tax practices around 2017 when Donald Trump took office, former Chief Financial Officer Allen Weisselberg testified in a New York court on Thursday, but he said the Trump family was not involved in wrongdoing.

“Mr. Trump became president and everybody was looking at our company from every different angle you could think of including himself personally,” Weisselberg said. “We felt at the time, let’s go through all the practices that we’ve been utilizing over the years and make sure we correct everything we have to correct.”

But while Weisselberg testified that he did commit the illegal tax-related crimes he’s pleaded guilty to, he explicitly said the Trump family was not in on the schemes.

“It was my own personal greed that led to this,” he said.

Trump Org. and its businesses practices were thrust into the spotlight when Trump took office, prompting an internal “cleanup,” Weisselberg said.

Weisselberg, in his second day testifying, said the practice of cutting executives’ bonuses via 1099 income started in the 1980s before he started working for Trump in 1986. He said he wasn’t sure who started the practice.

The 1099 income allowed Trump companies to avoid taxes on the big checks that were usually over $100,000 each and afforded the executives a bonus without taxes automatically withheld.

Mazars accounting partner Donald Bender expressed concern to Weisselberg about the bonus checks meant for independent contractors or self-employed individuals. “He didn’t love the idea,” Weisselberg said.

The company didn’t stop cutting those checks until 2017 after an internal investigation, according to testimony.

Donald Trump signed the bonus checks for executives each year around the holidays, according to Weisselberg, who would deliver the stack of checks to Trump’s office for his signature.

“Donald Trump always wanted to sign the bonus checks,” Weisselberg said.

Trump also liked to hand out the bonuses personally to his employees in a Christmas card, Weisselberg said of his boss before Trump stepped away from the company to become president.

Two Trump Organization entities are charged with nine counts of tax fraud, grand larceny and falsifying business records in what prosecutors allege was a 15-year scheme to defraud tax authorities by failing to report and pay taxes on compensation provided to employees.

The former president is not a defendant in the case.

Weisselberg also recounted for the jury how Trump started paying school tuition for his two grandkids from his own personal bank account. Donald Trump was complaining about the cost of tuition as he signed tuition invoices for his own grandkids for Donald Trump Jr. when Weisselberg walked into his office.

“I have to pay more in the way of tuition bills for these kids so I may as well pay your grandkids too,” Weisselberg testified Trump said.

Days later, Weisselberg brought the school invoices to his boss’s desk for his approval. After Trump took office, Trump Jr. signed some tuition bills for Weisselberg before that ended in 2017.

Weisselberg stopped short of saying Trump or Donald Jr. knew about Weisselberg’s scheme to pay back the company through his paychecks to avoid taxes on the tuition.

He told Trump he’d pay him back for it, but didn’t elaborate on how, according to Weisselberg.

Weisselberg says it was about ‘personal greed’

Weisselberg pleaded guilty in August for failing to pay taxes on approximately $1.7 million in off-the-books compensation he received in the form of a company-funded apartment in New York City and other expenses

Weisselberg testified that he did not conspire or scheme with any members of the Trump family in connection to the tax-related charges he pleaded guilty to.

“It was my own personal greed that led to this,” he said.

During cross examination on Thursday, defense attorney Alan Futerfas went through the 15 charges of the indictment that Weisselberg’s pleaded guilty to, clarifying with him that the crimes are connected to Weisselberg’s personal financial documents and behavior – not the company or any Trump family member.

“Did you conspire with (Trump Organization Controller) Jeff McConney?”

“Yes,” Weisselberg said.

“Did you conspire with any member of the Trump family?”

“No,” he said.

“Did you scheme with Jeff McConney?”

“Yes.”

“Did you scheme with any member of the Trump family?”

“No,” Weisselberg said.

Futerfas asked Weisselberg to recount his nearly 50 years working with the Trump family.

Weisselberg watched Donald Trump’s kids grow up, he testified, telling them stories about the family business in the early days. Weisselberg’s job was to protect the family and its companies from situations like this, he confirmed to the defense attorney.

“Did you betray the trust that was placed on you?”

“I did,” Weisselberg said.

“And you did it for your own personal gain?”

“Correct,” Weisselberg said, his voice dropping to whisper.

Before the lunch break Futerfas asked the former Trump Org CFO if he was embarrassed about his illegal acts.

“More than you can imagine,” Weisselberg said, growing emotional.

“Are you ashamed?”

“Yes, very much so,” his voice cracking.

Weisselberg is expected to serve a jail sentence of about five months plus five years of probation, in exchange for his testimony at trial, he confirmed on the stand.

The sentencing range is five to 15 years if he doesn’t cooperate fully, Weisselberg testified. Judge Juan Merchan ultimately must accept the plea deal and sentence Weisselberg.

“I committed those crimes with Jeffrey McConney who I dealt with directly on that and Trump Corporation and Trump Payroll Corporation,” he said when explicitly asked.

This story has been updated with additional details.

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