Longtime Trump CFO Weisselberg gets 5 months in jail in tax fraud case

[January 11, 2023]  By Karen Freifeld

NEW YORK (Reuters) -Allen Weisselberg, a longtime executive for Donald Trump and the star prosecution witness in the Trump Organization's criminal trial, was sentenced on Tuesday to five months behind bars for helping engineer a wide-ranging tax fraud at the former president's real estate company.

Weisselberg, 75, was sent to New York's notorious Rikers Island jail after pleading guilty last August in an agreement with prosecutors to all 15 counts he faced. The Trump Organization's former chief financial officer admitted that from 2005 to 2017 he and other executives received bonuses and perks that fraudulently saved the company and themselves money and that he evaded taxes on $1.76 million of income.

The Trump Organization was convicted last month on all counts it faced at a trial overseen by Justice Juan Merchan in a New York state court in Manhattan.

At Tuesday's sentencing hearing, Merchan said that had he not agreed last August to a five-month term for Weisselberg arising from the plea deal, he would have imposed a much longer sentence based on the trial testimony.

Merchan singled out Weisselberg for putting his wife on Trump's payroll so she could receive undeserved Social Security benefits. Other perks for the Weisselbergs included a luxury Manhattan apartment and multiple Mercedes-Benz vehicles.
 

"The reason the court finds it so offensive is it was driven by greed," even though Weisselberg was already "earning over seven figures," Merchan said.

Weisselberg also paid about $2 million in taxes, penalties and interest as part of his punishment.

He had been on paid leave from the Trump Organization - his employer for about five decades - but his lawyer Nicholas Gravante said after the hearing that Weisselberg and the company had "amicably parted ways."

The Trump Organization did not immediately respond to a request for comment. Merchan is set to sentence the company on Friday, though penalties are limited to $1.6 million.

'BLACK HOLE'

Weisselberg wore an olive green North Face jacket, a white crewneck shirt and a light blue disposable mask at his sentencing. Once at Rikers, he was expected to trade his street clothes for a uniform and sneakers with Velcro straps.
 

Allen Howard Weisselberg, the former Trump Organization CFO, appears for sentencing for tax fraud scheme in New York State Supreme Court in the Manhattan borough of New York City, U.S., January 10, 2023. Curtis Means/Pool via REUTERS

He will likely serve 100 days in jail with time off for good behavior. Those days probably will not be easy. Lying between the New York City boroughs of Queens and the Bronx, Rikers is known for violence, drugs and corruption.

The jail houses more than 5,900 inmates, and 19 inmates died there last year. The city's corrections department has said its mission includes keeping inmates safe. Rikers is scheduled to close in 2027.

"You're going into a byzantine black hole," said Craig Rothfeld, a prison consultant at Inside Outside Ltd who helped Weisselberg prepare for lockup.

Another client is Harvey Weinstein, the former Hollywood movie producer convicted twice of rape.

Rothfeld said he hopes Weisselberg will be segregated from the general population, and not placed in a dorm with inmates who may not know him but will know his former boss, who is seeking the presidency again in 2024.

"Certainly Mr. Weisselberg's 50-year relationship with the former president is on all our minds," Rothfeld said.

Weisselberg testified that Trump signed bonus and tuition checks, as well as other documents at the heart of the prosecution case, but was not in on the tax fraud scheme. He also testified that he hoped to get a $500,000 bonus this month, and that the company was paying his lawyers.

Trump was not charged and has denied wrongdoing.

Manhattan District Attorney Alvin Bragg, whose office prosecuted Weisselberg and the Trump Organization, attended the sentencing. Bragg's office is still investigating Trump's business practices.
 

"In Manhattan, you have to play by the rules no matter who you are or who you work for," Bragg said in a statement.

Weisselberg remains a defendant in New York state Attorney General Letitia James' $250 million civil lawsuit that accused Trump and his company of inflating asset values and Trump's net worth.

(Reporting by Karen Freifeld; Editing by Will Dunham and Richard Chang)

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