Trump Organization ready to call ex-CFO a liar as tax fraud trial begins

[October 25, 2022]  By Karen Freifeld and Luc Cohen

NEW YORK (Reuters) -Jury selection began on Monday in the tax fraud trial of former U.S. President Donald Trump's company, with the Trump Organization ready to accuse its longtime chief financial officer of lying in a criminal case in which it is accused of awarding "off the books" benefits to some senior executives.

The trial in a New York state court is one of a mounting number of legal woes for Trump as he considers another run for the presidency in 2024. The Manhattan district attorney's office last year charged Trump's namesake real estate company and Allen Weisselberg, its then-chief financial officer.

Weisselberg pleaded guilty in August to helping the company defraud tax authorities for 15 years in an agreement with prosecutors requiring him to testify at this trial. The charges to which Weisselberg pleaded guilty included grand larceny and tax fraud, and he admitted concealing $1.76 million in income.

Weisselberg, considered the prosecution's star witness, is set to testify along with the company's controller, Jeffrey McConney.

Susan Necheles, a lawyer for the Trump Organization, said in a virtual hearing last week that challenging Weisselberg's admission that he hid information from the accountants would be part of the company's defense, according to a transcript of the proceeding held privately that was later unsealed.
 

"Weisselberg will testify he believed everything he was doing was wrong," Necheles said during the video conference. "We think he's lying and we want to show that."

Necheles said Weisselberg and McConney relied on outside accountants "who led them to believe that certain things were done correctly."

The process of choosing a 12-member jury began, with Justice Juan Merchan presiding over a trial he said could last six weeks. The judge told more than 100 prospective jurors about the charges and informed them that the company pleaded not guilty and that proof of guilt beyond a reasonable doubt would be required for conviction.

Merchan heard from 19 prospective jurors who read him answers to a written questionnaire seeking basic biographical details as well as whether they had strong opinions on Trump or his companies.

Several jurors who said they had strong opinions but that they could remain fair were allowed to stay. One who said her views would interfere with her ability to be impartial was dismissed. Lawyers from both sides on Tuesday will have the opportunity to question prospective jurors in more detail.

Michael Van der Veen, a lawyer for Trump, told jurors his team would focus on Tuesday on asking whether jurors could truly be fair and impartial. He said he was optimistic jury selection could be completed by Friday.

Allen Howard Weisselberg, the former Trump Organization CFO, sits in New York State Supreme Court with his lawyer Mary Mulligan, as he pleads guilty during his hearing in the Manhattan borough of New York City, U.S., August 18, 2022 in this courtroom sketch. REUTERS/Jane Rosenberg

TRUMP NOT CHARGED

The Trump Organization, which operates hotels, golf courses and other real estate around the world, could face up to $1.6 million in fines for the three tax fraud counts and six other counts it faces. The company has pleaded not guilty.

Trump, a Republican businessman-turned-politician who rose to fame in New York, is not charged in the case.

Weisselberg has refused to cooperate with prosecutors in their investigation, agreeing only to testify as required by his plea agreement. Weisselberg is meeting with both sides to assure that his testimony goes smoothly, giving each the chance to learn what they may elicit "that is helpful to their respective positions," his lawyer Nicholas Gravante said.

In his guilty plea, Weisselberg admitted to scheming with the company so that "substantial portions" of his and other employees' income was unreported or misreported.

Weisselberg's plea agreement stated that he evaded paying taxes on unreported income from the Trump Organization in the form of benefits including rent payments for a Manhattan apartment, multiple Mercedes Benz automobiles, private school tuition for his grandchildren and cash and furnishings for his apartment and home in Florida.

Weisselberg has worked for the company for nearly half a century. He went from being CFO to a senior advisor after he and the company were indicted. After his guilty plea, he was placed on a paid leave of absence, according to a person familiar with the matter. The Trump Organization after his guilty plea called Weisselberg a "fine and honorable man."

Weisselberg was promised a sentence of five months in jail if he testifies truthfully in the trial.

The case is separate from a $250 million civil lawsuit filed by New York's attorney general against Trump, three of his adult children and his company in September, accusing them of overstating asset values and his net worth to get favorable bank loans and insurance coverage.

One potential juror, a 34-year-old woman who was excused from serving in the criminal trial for job-related reasons, told reporters outside the courtroom she could not have been impartial.

"He's guilty in my mind, whatever the case is," she said of Trump. "Anything he does, his corporation does."

(Reporting by Karen Freifeld and Luc Cohen; Editing by Will Dunham and Noeleen Walder)

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