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Trump approved key aspect of company’s scheme, prosecutors assert

Dec. 2, 2022 Updated Fri., Dec. 2, 2022 at 7:41 p.m.

FILE -- Former President Donald Trump speaks during CPAC 2022 in Dallas, Aug. 6, 2022. Defense lawyers and prosecutors delivered closing arguments in the trial of Trump's family business on Dec. 1, agreeing that its employees had engaged in a lucrative tax fraud scheme for more than a decade but drawing diametrically opposed conclusions about whether their actions implicated the Trump Organization itself. (Emil Lippe/The New York Times)  (EMIL LIPPE)
FILE -- Former President Donald Trump speaks during CPAC 2022 in Dallas, Aug. 6, 2022. Defense lawyers and prosecutors delivered closing arguments in the trial of Trump's family business on Dec. 1, agreeing that its employees had engaged in a lucrative tax fraud scheme for more than a decade but drawing diametrically opposed conclusions about whether their actions implicated the Trump Organization itself. (Emil Lippe/The New York Times) (EMIL LIPPE)
By Jonah E. Bromwich and Lola Fadulu New York Times

NEW YORK – Donald Trump approved a key aspect of a tax fraud scheme orchestrated by several top executives at his family business, prosecutors said Friday in their closing arguments at the company’s trial, an explosive claim as the jury prepares to deliberate next week.

Prosecutors have not charged Trump with participating in the scheme, through which, they say, executives were compensated in off-the-books perks so that they could evade taxes. But Friday, Joshua Steinglass, a prosecutor, told the jury that Trump had signed off on part of the scheme and that one document proved it.

“Mr. Trump is explicitly sanctioning tax fraud,” Steinglass said, referring to a paper signed by the former president that showed an executive asking that his salary be reduced. “That’s what this document shows,” Steinglass added, arguing that the lower salary corresponded with the perks the executive, Matthew Calamari, had received.

Although prosecutors have shown that Trump knew about some of the perks his executives were getting, his awareness of the extent of the scheme is murky. Defense lawyers objected strongly to Steinglass’ statement, and the judge, Justice Juan Merchan of state Supreme Court in Manhattan, sustained their objection.

Still, jurors heard what Steinglass said.

The Manhattan district attorney’s office, which is pursuing a broader criminal inquiry into the former president, has accused his company, the Trump Organization, of doling out the perks, which included luxury cars and apartment rentals, to several executives, primarily Allen Weisselberg, the company’s longtime finance chief. Weisselberg pleaded guilty this summer and testified at the trial.

After Steinglass finished his closing statement, the focus turned to Trump. A defense lawyer, Michael van der Veen, requested a mistrial because of Steinglass’ comment.

“It’s a bias that he put on the jury that can’t be undone, and it’s not insignificant that he did it,” van der Veen said.

Merchan rebuffed the request. “I don’t believe it is necessary to declare a mistrial,” he said.

The former president is not on trial, and the prosecution need not prove his involvement in, or awareness of, the alleged fraud. What it must prove is that Weisselberg acted “in behalf of” the company, meaning that he did not act solely in his own interest and that his actions provided some benefit to the company. Those three words – “in behalf of – have been the subject of a debate throughout the trial, and lawyers quarreled about the phrase again Friday. Merchan said he was considering defining the phrase for the jury when he provides them directions Monday, when they are to begin deliberating.

The definition he provided Friday, though, may not offer much clarity.

“It is not necessary that the criminal acts actually benefit the corporation, but an agent’s acts are not in behalf of a corporation if undertaken solely to advance the agent’s own interests,” he said. “Put another way: If the agent’s acts were taken merely for personal gain, they were not made in behalf of the corporation.”

On Tuesday, with the jury absent, he was more explicit, saying that prosecutors needed to show that Weisselberg had “some intent to benefit the corporation.”

Steinglass said during his closing argument that “by far the most significant benefit” to the Trump Organization was that it allowed the companies to pay less to Weisselberg, who took home $1.76 million in off-the-books perks from 2005 to 2017.

Had the compensation been properly reported, it would have cost the company $3.5 million, Steinglass said, referring to a chart with figures he had rounded off.

“That, ladies and gentlemen, is not peanuts,” Steinglass told the jury.

He argued that once Weisselberg began reducing his total compensation to account for the off-the-books perks, it “only hurt Allen Weisselberg and only helped the companies.”

The jury appeared to be following closely as Steinglass described how the scheme had helped the Trump Organization, including by helping the company avoid the need to give raises; reducing contributions to Medicare; cultivating the executives’ happiness and loyalty; and increasing their productivity by allowing them to work longer hours.

It was not just Weisselberg who engaged in the scheme, Steinglass argued; it was part of the company’s culture. He cited Calamari, the Trump Organization’s operations chief, and Jason Greenblatt, general counsel, as taking part as receiving benefits through the scheme as well.

Steinglass said Weisselberg’s motivations with regard to the company were akin to a professional musician in an orchestra.

“A professional musician in an orchestra, she plays the best she can because she wants to succeed,” he said, adding, “But an ancillary benefit is that it makes the whole orchestra sound better.”

The defense objected to the prosecution’s mention of Trump earlier in its summation, but the judge said he would allow it as long as prosecutors did not refer to him haphazardly.

“I had been somewhat surprised by the extent to which the defense had actually brought up Trump’s name, and I felt it was perfectly fine for Steinglass to then respond to that,” Merchan said.

Steinglass said during his final statement Friday that he would not veer far into whether Trump was aware or involved, because “ultimately it doesn’t matter.”

He nonetheless neatly laid out the argument that Trump was not “blissfully ignorant.”

“This is all part of the Trump executive compensation package: free cars for you, free cars for your wife, free apartments for you, free apartments for your kids,” Steinglass said.

As the morning wore on, some of the jurors appeared annoyed by the defense team’s objections, with a few shaking their heads and glancing at their watches.

The prosecution’s closing came after the defense offered its own final arguments Thursday, with two of the company’s lawyers, Susan Necheles and van der Veen, arguing that Weisselberg had engaged in the tax-fraud scheme solely to help himself and that the company had not benefited.

The defense also sought to blame Donald Bender, an employee of Mazars, an outside accounting firm that prepared tax returns and offered other tax guidance to the Trump Organization.

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