New York prosecutors on Thursday unveiled the first charges in their grand jury investigation into the Trump Organization, charging the former president\u2019s company and its \u2026<\/b>
\nNew York prosecutors on Thursday unveiled the first charges in their grand jury investigation into the Trump Organization, charging the former president\u2019s company and its chief financial officer (CFO), Allen Weisselberg, with tax-related crimes. Prosecutors allege a 15-year scheme in which the Trump Organization compensated Weisselberg in a manner that allowed the company and the executive to evade taxes. The defendants deny any wrongdoing and argue that the charges are politically motivated. The allegations stem from a years-long investigation by the Manhattan district attorney\u2019s office that has involved prosecutors obtaining former President Trump \u2019s tax returns. Thursday\u2019s indictment doesn\u2019t charge the former president with any crimes, but prosecutors say their investigation is ongoing. Here are five things to know about the indictment. Prosecutors say Weisselberg avoided taxes on about $1.7 million of income According to the indictment, Weisselberg received indirect compensation from the Trump Organization over a number of years of about $1.76 million. The company avoided reporting the income to tax authorities and withholding taxes from it, and Weisselberg hid the income from his tax preparer and didn\u2019t report it on his tax returns, prosecutors claim. \u201cDuring the period of the scheme, Weisselberg thereby evaded approximately $556,385 in federal taxes, approximately $106,568 in state taxes, and approximately $238,159 in New York City taxes, and he falsely claimed and received approximately $94,902 in federal tax refunds and approximately $38,222 in state tax refunds, to which he was not entitled,\u201d the indictment said. Much of the untaxed compensation, more than $1.1 million from 2005 through 2017, came from the Trump Organization paying rent and related expenses for a Manhattan apartment where Weisselberg resided. While the apartment was Weisselberg\u2019s main residence starting in 2005, the CFO falsely claimed to tax authorities that he wasn\u2019t a New York City resident for a number of years and started paying city income taxes only after he sold a home on Long Island in 2013, according to court papers. The untaxed compensation also took other forms, including payments for leases on Mercedes-Benz automobiles for Weisselberg and his wife and private school tuition for his family members, according to the indictment. Indictment alleges the Trump Organization falsified records Prosecutors also allege that the Trump Organization monitored the amount of indirect compensation it was providing to Weisselberg but nonetheless did not report the income to tax authorities. Weisselberg was authorized to receive annual compensation of a set amount. The Trump Organization tracked how much it spent on indirect compensation in the forms of rent, automobile and tuition payments, and \u201ctreated many of them as part of his authorized annual compensation, ensuring that he was not paid more than his pre-authorized, fixed amount of gross compensation,\u201d the indictment stated. Still, the indirect compensation wasn\u2019t included in forms that reported Weisselberg\u2019s gross income, so the executive\u2019s income was underreported to federal, state and local tax authorities, the document added. Tax experts say the alleged crimes are significant Experts in tax law told The Hill that the indictment alleges tax crimes that are substantial. Daniel Hemel, a University of Chicago law professor, said that it\u2019s rare for prosecutors to bring charges against businesses that commit more minor violations of tax rules governing fringe benefits for employees. However, he said it wouldn\u2019t be unusual for prosecutors to bring charges against a business or its top officers over a substantial amount of off-the-books pay. \u201cPaying your CFO $1 million under the table, that is going to be a prosecution,\u201d Hemel said. Tax experts also said that the alleged crimes detailed by prosecutors were particularly blatant and that those accused of carrying out the offenses were likely knowledgeable about tax rules. What\u2019s alleged is a \u00ab\u00a0well-thought-out structure to pick out a variety of ways to generate income for Weisselberg in a way that would skirt the tax rules,\u00a0\u00bb said Scott Michel, an attorney at Caplin and Drysdale who has done defense-side criminal tax work for 40 years. The Trump Organization cries foul The Trump Organization and Weisselberg have pleaded not guilty to the charges against them. The company is arguing that the charges are being brought only because of a desire by Democratic prosecutors to go after Trump. Representatives for the company also argue that it\u2019s unusual to bring cases focused on employee benefits and that the indictment’s focus indicates that prosecutors haven\u2019t found evidence of more significant crimes. \u201cAfter years of investigation and the collection of millions of documents and devoting the resources of dozens of prosecutors and outside consultants, this is all they have?\u201d Ron Fischetti, an attorney representing the Trump Organization, said in a statement after the charges were announced. A Trump Organization spokesperson said in a statement hours before the indictment was unsealed that Weisselberg is \u201cbeing used by the Manhattan District Attorney as a pawn in a scorched earth attempt to harm the former President.\u201d \u201cThe District Attorney is bringing a criminal prosecution involving employee benefits that neither the IRS nor any other District Attorney would ever think of bringing,\u201d a spokesperson for the company said. The former president chimed in as well, calling the charges against his company and its CFO the continuation of a \u201cpolitical witch hunt.\u201d More charges could be coming The Manhattan district attorney\u2019s office and the New York attorney general\u2019s office have been probing the Trump Organization for several years, and the prosecutors\u2019 work isn\u2019t ending with the charges announced last week. \u201cThis investigation will continue, and we will follow the facts and the law wherever they may lead,\u201d New York Attorney General Letitia James (D) said in a statement Thursday. Many observers suspect that the charges were brought against Weisselberg, who has worked for the Trump family for decades, in an effort to get him to cooperate with prosecutors\u2019 investigation against Trump. A big question going forward is whether Thursday\u2019s charges are strong enough \u201cto convince Weiselberg to negotiate,\u201d said Philip Hackney, a law professor at the University of Pittsburgh.<\/p>\n