Trump Organization could face criminal charges in New York as soon as next week

By Kara Scannell, CNN

The Manhattan district attorney’s office has informed lawyers for the Trump Organization that it could face criminal charges in connection with benefits it has provided to company employees, a Trump attorney confirmed Friday.

The charges, which could come as soon as next week, would likely involve allegations of a company effort to avoid paying payroll taxes on compensation it provided to employees, including rent-free apartments, cars and other benefits, a person familiar with the matter said.

The New York Times first reported the contact between the DA’s office and Trump Organization lawyers.

Prosecutors are also likely to announce charges against Allen Weisselberg, the Trump Organization chief financial officer, as soon as next week, people familiar with the matter said.

Weisselberg’s lawyers recently informed prosecutors that he would not cooperate in the investigation, the people said, although that could change in the future.

Weisselberg is under scrutiny for benefits he received, including a company-funded apartment and car. Prosecutors are also looking into similar benefits given to Matthew Calamari, the chief operating officer of the company. One source familiar with the matter said it’s possible he could also face charges.

Ron Fischetti, an attorney for former President Donald Trump, said he had reached out to New York District Attorney Cy Vance and Mark Pomerantz, the special prosecutor added to the team this year, after learning that Weisselberg was not cooperating with authorities.

During a videoconference on Thursday, Fischetti and other attorneys sought to persuade the prosecutors not to bring charges against the company.

“They didn’t seem, in my opinion, to be very receptive to these arguments,” Fischetti said.

“It’s outrageous. It’s unprecedented. It’s never happened before,” he said of a company being indicted in connection with failing to pay taxes on benefits. He said that if the company is charged it will plead not guilty and make a motion for the judge to dismiss the indictment.

“It’s done just to get Donald Trump. This case should not be brought ever” against the company, he said.

Fischetti said he had asked specifically about whether the former President is facing any charges.

There was “no indication at all on anything that they said that he’s being charged,” Fischetti said. He added that there was also no indication that any Trump family members are being charged.

Fischetti said an indictment of the company “hurts a lot of people, innocent people there. It definitely hurts [Trump] and definitely angers him.”

Weisselberg declined to answer questions from CNN on Saturday morning, and his attorney did not respond to calls for comment Friday. The district attorney’s office declined to comment.

Pressure on Weisselberg

When Trump was elected to the White House, he appointed Weisselberg to run the company’s day-to-day operations along with his sons Donald Trump Jr. and Eric Trump. The company could have liability for the actions of Weisselberg or other senior executives.

Prosecutors have tried to secure Weisselberg’s cooperation in their broad investigation into the Trump Organization, which led to a Supreme Court fight over a subpoena for Trump’s tax documents and has explored whether the real estate company misled lenders and insurers or committed tax fraud. In recent months, the focus has narrowed to taxes on benefits.

Weisselberg, who has worked with Trump since 1973, has been under pressure to cooperate with prosecutors for months.

Criminal tax cases against individuals for not paying taxes on corporate benefits are rare and are often handled with civil settlements and penalties, tax lawyers say, but individuals are required to pay taxes on certain benefits they receive as a form of compensation, unless they fit into narrow windows of exemptions. For a criminal case, prosecutors would need to prove the person knowingly underreported their income.

It is a common tactic for prosecutors to dig into someone’s personal finances to look for anything that could be used as leverage to win their cooperation. Prosecutors are investigating whether the Trump Organization doled out benefits to employees with the intent of not paying appropriate payroll-related taxes on the compensation, people familiar with the investigation said.

Jennifer Weisselberg’s cooperation

The focus on Weisselberg began late last year. The New York attorney general and district attorney have gathered evidence on Weisselberg, aided in part by his former daughter-in-law Jennifer Weisselberg, who has been cooperating with authorities. She has turned over boxes of financial records and has met with investigators multiple times, her lawyer told CNN.

Jennifer Weisselberg was married for 14 years to Barry Weisselberg, who for two decades managed Trump Organization businesses contracted out by New York City in Central Park, including Wollman Rink and Lasker Rink.

Documents from Jennifer and Barry Weisselberg’s divorce show thousands of dollars in payments for cars, rent, tuition, medical bills and more coming from Allen Weisselberg to his son’s family.

The spending and benefits are what attracted scrutiny by prosecutors in both offices. The district attorney has questioned Jennifer Weisselberg about benefits she received during her marriage, including access to Trump-owned rent-free apartments, she previously told CNN. More recently, their interest has turned to questions around school tuition payments for her children.

This story has been updated with responses from Trump’s attorney and details of the investigation.

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CNN’s Sonia Moghe contributed to this report.