Trump Org. stopped illegal tax practices when Donald Trump took office, former CFO testifies
By Kara Scannell and Lauren del Valle, CNNUpdated: Thu, 17 Nov 2022 16:56:47 GMTSource: CNNThe Trump Organization stopped several illegal tax practices around 2017 when Donald Trump took office, formeBy Kara Scannell and Lauren del Valle, CNN
Updated: Thu, 17 Nov 2022 16:56:47 GMT
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.
"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."
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 pleaded guilty in August for failing to pay taxes on $1.7 million in off-the-books compensation he received in the form of a company-funded apartment in New York City.