trump taxes

Criminal Investigation Into Trump Organization Aimed at ‘Flipping’ CFO: Report

Donald Trump, Donald Trump Jr., and Allen Weisselberg in January 2017. Photo: AFP via Getty Images

In a statement from February released just after the Supreme Court ruled that Manhattan district attorney Cyrus Vance can access his tax records, Donald Trump didn’t seem too pleased, calling the order a “threat to the very foundation of our liberty.” Based on this reaction, the former president probably won’t be thrilled by the reported development on March 4 regarding Vance’s criminal investigation into possible tax fraud at the Trump Organization.

According to the Washington Post, with the tax docs now in hand, prosecutors at Vance’s office are focusing their current efforts on Trump’s former chief financial officer Allen Weisselberg and two of his adult sons — one of whom manages the Trump Organization’s ice rinks in Central Park, and another who works at a major lender to his business. According to a source familiar with the inquiry who spoke to the Post, the goal of this widely applied pressure is aimed at “flipping” Weisselberg against his employer. On March 31, the New York Times reported that investigators have subpoenaed Weisselberg’s personal bank records. If they did find possible wrongdoing, prosecutors could then leverage that hypothetical exposure to convince Weisselberg to cooperate with the inquiry into Trump.

For years, Trump fashioned himself as a real-estate figure with close ties to the New York mafia. Now, the ex-president who speaks like a mob boss will be investigated like one: In February, Vance’s office hired Mark F. Pomerantz on a special assignment for the Trump Organization inquiry. A current member of the prestigious firm Paul, Weiss, Pomerantz oversaw the trial of John A. Gotti in the 1990s, who led the Gambino crime family after his father was sent to prison. With Pomerantz on the district attorney’s team and the goal of “flipping” a key financial player, the inquiry into the Trump Organization is sharing some parallels with past investigations into mob figures whom Trump has referred to as “very nice people.”

Weisselberg, 73, has been in charge of the Trump Organization’s books for decades; he began his time in the company working for the former president’s father. The CFO since 2000, he once described himself in a deposition as Trump’s “eyes and ears … from an economic standpoint.” And though he remained loyal to his boss when his name was brought up in congressional and federal investigations during his presidency, investigators are now scrutinizing Weisselberg’s work “in helping to assess the value of Trump buildings as the company sought to obtain loans or property-tax reductions,” according to the Post.

This focus is important, as investigators are looking for proof that the Trump Organization inflated the value of its properties to obtain loans or deflated their value to reap tax benefits, acts that could constitute fraud. Naturally, prosecutors are also poking for weak spots in Weisselberg’s relationship with Trump. Questions about the accountant include “What’s his relationship with Donald?” and “How loyal is each person to each other?” As for the son angle, the Post reports:

[Prosecutors] have also asked about a Trump-owned luxury apartment where Weisselberg’s son Barry lived for several years. The exact nature of Vance’s interest in the apartment is not known, but if Barry Weisselberg, who manages Trump’s ice-skating rinks, got the apartment rent-free, that might be considered a fringe benefit of his job and subject to income tax.

The Post did not mention if Vance’s office has had made any progress in flipping Weisselberg, but if the accountant does go to the other side, one can expect some excoriating words from a former president who loathes cooperation. In August 2018, just after Michael Cohen pleaded guilty to five counts of tax evasion and two counts involving unlawful campaign contributions, Trump said that “flipping … almost ought to be illegal.” He was right to be upset at the time: Vance’s current investigation has roots in the inquiry into hush-money payments that Cohen, Trump’s then-personal lawyer, paid off to women just before the 2016 election who claimed they had affairs with Trump.

This post has been updated to include reported details regarding the subpoena of Allen Weisselberg’s personal bank records.

Investigation Into Trump Org Aimed at ‘Flipping’ CFO: Report