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The trial focuses on how the Trump Organization evaded taxes

Several Trump Organization executives collectively received more than $1 million on the side in 2015 as “independent contractors” in a way that helped them avoid taxes, Manhattan prosecutors revealed at the company’s criminal trial Thursday.

Though that particular detail didn’t become a formal criminal complaint against the company, it was one of many dirty acts at the former president’s eponymous company that came under scrutiny by Manhattan DAs this week.

The Trump Organization is on trial for allegedly evading taxes by showering its then-CFO with extraordinary corporate benefits such as a fancy apartment in New York City, luxury cars and paying tuition at an expensive private school for his grandchildren.

That disgraced former executive, Allen Weisselberg, pleaded guilty earlier this year and agreed to testify against the company in court.

On Thursday, prosecutors revealed that a second executive who was never criminally charged in the case – Chief Operating Officer Matthew Calamari Sr. – got a similar deal. Emails showed him snagging a corporate apartment in the expensive Trump Park Avenue building in Midtown Manhattan in 2012 and having the company simply “cut” his salary by $6,000 a month. That agreement cut Calamari’s salary on paper and treated his rent as an untaxed benefit the way some companies treat healthcare costs.

In a curious example of how this type of odd deal is viewed at the Trump Organization, an accountant for the company testifying Thursday said “there was no rent.” It just didn’t exist – although it did exist.

That witness, Jeffrey S. McConney, is a senior vice president of the company and has been its controller for decades. Weisselberg hired him in 1987 and he has been the CFO’s preferred accountant ever since. On Thursday, he provided silent explanations and again proved a frustrating witness for prosecutors, continuing the headache they got trying to squeeze information from him before a grand jury ahead of this trial.

According to sources and court documents, McConney became something of a scapegoat, taking all the blame for accounting irregularities and apologizing for what he called “mistakes” – refusing to be a useful witness against Trump himself.

On Thursday, McConney reluctantly explained the company’s financial accounting — and his part-time job as a personal accountant — to some executives.

Assistant District Attorney Joshua Steinglass asked him about the ridiculous way the company paid so many executives a portion of their salaries as “independent contractors.” Weisselberg, for example, earned an additional $300,000, including $75,000 for work related to the operation of Wollman’s rink in Central Park and $50,000 for work at Trump’s Florida oceanfront mansion, Mar-a-Lago.

Steinglass commented that the additional payments made no sense. McConney suggested that his boss was probably paid that way — at Mar-a-Lago, for example — because he did some insurance-related work there.

Steinglass asked: Isn’t that part of his regular job? After much urging, McConney finally gave in.

“Yeah, that would be his normal job description,” he grumbled.

Prosecutors then determined that this was patently disgraceful and got McConney to relate how one of those executives — then Trump Organization attorney Jason Greenblatt — stopped being paid as an independent contractor because this game destroyed his law license would. (Greenblatt later became the Trump administration’s special envoy for the Middle East.)

Prosecutors also used McConney to investigate Calamari’s salary agreement, which reduced his reported salary by $72,000 in 2012 alone — equating to the average New York professional simply not paying taxes for a year.

“Has this been reported to the tax authorities?” Steinglass asked him.

“No, sir,” he replied.

The revelation will certainly raise questions as to why prosecutors haven’t filed a case against Calamari, a former Trump bodyguard who has maintained close ties with the New York City Police Department during his decades as a focal point for emergencies at Trump buildings.

Steinglass ended his examination by focusing on McConney’s role as personal accountant for these executives.

“Mr. McConney, did you intentionally help people dodge their income taxes?”

“I tried to help them in any way I could,” he began, grinning from under his white mustache. “With some suggestions.”

The Trump Organization’s outside defense attorney, Susan R. Necheles, spent the afternoon presenting emails that downplayed McConney’s role at the company. She repeatedly pointed out that McConney could not authorize even small checks without his boss’s consent, clearly establishing the defense that this case against the company begins and ends with a single executive who has already pleaded guilty: Weisselberg.

The criminal trial, which is expected to last six weeks, will continue on Monday. It was paused for much of the past two weeks after McConney fell ill with COVID-19. He coughed relentlessly on the witness stand last week and ended up sickening the judge on the case too. Judge Juan Merchan, who did not wear a mask when the trial began, wore a blue face covering Thursday.

https://www.thedailybeast.com/trial-focuses-in-on-how-trump-organization-dodged-taxes?source=articles&via=rss The trial focuses on how the Trump Organization evaded taxes

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