Explosive Interview Directly Implicates Trump in Tax Scheme

Photo Illustration by The Daily Beast

Photo Illustration by The Daily Beast

A witness in the New York investigation against the Trump Organization has told prosecutors that Donald Trump personally guaranteed he would cover school costs for the family members of two employees in lieu of a raise—directly implicating the former president in an ongoing criminal tax fraud case.

The explosive claims come from Jennifer Weisselberg, the ex-wife of a longtime company employee, during a teleconference call with investigators on Friday, June 25, according to two sources who agreed to speak on the condition of anonymity.

On that afternoon’s Zoom call, those sources said, investigators with the Manhattan district attorney and New York state attorney general asked Jennifer Weisselberg whether Trump himself was involved in the company’s alleged tax-dodging scheme of making corporate gifts instead of increasing salary that would be taxed.

He was, she answered.

Weisselberg then provided key details for investigators. In January 2012, inside Trump’s office at Trump Tower on Fifth Avenue, Jennifer Weisselberg watched as Trump discussed compensation with her husband and her father-in-law, both company employees. Her husband wouldn’t be getting a raise, but their children would get their tuition paid for at a top-rated private academy instead.

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Weisselberg allegedly relayed to prosecutors that Trump turned to her and said: “Don’t worry, I’ve got it covered.”

Prosecutors were astonished, according to one source.

The Daily Beast received descriptions of the call from two people familiar with the details of the call.

According to two sources, among the prosecutors on the call were Carey Dunne, the Manhattan DA’s general counsel; Mark F. Pomerantz, a white collar crime specialist brought on for this investigation; and Gary Fishman, an assistant attorney general deputized to work on this joint investigation.

If true, Jennifer Weisselberg’s claims would directly tie Trump to what a New York criminal indictment described as a corporate scheme to pay executives “in a matter that was ‘off the books.’”

“The scheme allowed the Trump Organization to evade the payment of payroll taxes that [it] was required to pay,” an indictment for the Trump Organization claims. On the flip side, it also alleges that executives avoided having to pay income taxes on a huge chunk of their pay.

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Neither the Manhattan DA nor the state AG would comment on this story. Jennifer Weisselberg declined as well.

The indictment, filed the very next week on June 30, does not criminally charge Trump as an individual, but it does describe how he signed checks that paid for the Weisselberg children to attend an expensive private school in Manhattan’s Upper West Side.

While longtime chief financial officer Allen Weisselberg could be crucial to a criminal case against Trump, it’s Jennifer Weisselberg—his former daughter-in-law—who’s thus far been more helpful.

Prosecutors have already used documents in Jennifer Weisselberg’s divorce case to explore how Trump paid more than $50,000 a year, starting in 2012, for the kids to attend the Columbia Grammar and Preparatory School.

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Her ex-husband, Barry Weisselberg, the longtime manager of the Wollman ice rink, also provided potentially damning testimony during his divorce case in 2018. He described how his salary remained flat for years—and how his father, the Trump Organization’s chief financial officer, made sure the cost of their luxurious lifestyle was covered. Among the perks: a swanky apartment in the heart of the city facing the south end of Central Park, and later, a unit in the upscale Upper East Side. In both instances, the true value of the rent was substantially higher than what he could afford on his official salary.

That testimony formed some of the basis for last month’s indictment of his father, Allen Weisselberg. He and the company were charged with criminal tax fraud, falsifying business records, and scheming to defraud the government.

The CFO surrendered to law enforcement on July 1 and was arraigned in Manhattan criminal court, where he pleaded not guilty. Allen Weisselberg, who has been with the Trump Organization for decades, is accused of hiding $1.76 million of “indirect employee compensation” he got over a 12-year period that ended in 2017.

The Trump Organization’s lawyer, Alan Futerfas, has lambasted the investigation as an illegitimate move by a local prosecutor against a former president. Futerfas declined to comment on this story.

The offices of Manhattan DA Cyrus Vance Jr. and New York Attorney General Letitia James have indicated that the investigation is ongoing. Prosecutors have yet to file charges against others allegedly involved in the scheme, but judging by the indictment, more charges could be on the way.

For instance, the indictment identifies an “unindicted co-conspirator #1,” who remains unnamed but is described as the company’s “agent” and is accused of underreporting the CFO’s taxable income in 2009.

with additional reporting by Asawin Suebsaeng

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