The 25-page indictment filed against the Trump Organization and its chief financial officer, Allen Weisselberg, offers a cautionary tale to executives across North America.
The message seems to be that if your employer is providing what the government interprets as taxable benefits, you had better report them as income.
Otherwise, you might be led in front of the television cameras in handcuffs for the world to see.
Today, Weisselberg turned himself into authorities and made his first court appearance after being charged in the Supreme Court of the State of New York County of New York.
He faces 15 felony counts and the Trump Organization and the Trump Payroll Corporation is charged with 10 counts.
The indictment alleges that the Trump Organization, Trump Payroll Corp., the Trump Corporation, and Weisselberg "misreported portions of the employee compensation paid to certain Trump Organization executives, including but not limited to Weisselberg".
"Specifically, it was the practice of the Trump Organization to compensate certain executives by paying them a yearly salary and a discretionary end-of-year bonus," the indictment alleges. "The salary and, in most instances, a portion of the executives” end-of-year bonuses were paid to the executives by Trump Payroll Corp. and reported to federal, state, and local tax authorities as employee compensation on W-2 forms.
"However, for Weisselberg and other executives, a substantial portion of their end-of-year bonuses was paid in the form of checks drawn on other Trump Organization entities, including Wollman Rink Operations LLC, Trump International GolfClub LLC, the Mar-a-Lago Club, Trump Productions LLC, VH Property Corp., Trump Las Vegas Development LLC, Tramp CPS LLC, and other entities."
None of the allegations has been proven in court. Weisselberg has pleaded not guilty.
The Trump Organization includes several privately held corporations and partnership entities owned by Donald Trump and the Donald J. Trump Revocable Trust.
The state alleges that Weisselberg did not declare as income money he received from the Trump Corporation for a New York City apartment, as well as utility and garage expenses. In addition, the state alleges that the defendants "concealed his status as a New York City resident and enabled Weisselberg to avoid the payment of New York City income taxes".
"By concealing Weisselberg’s New York City residency from the tax authorities, and by failing to withhold New York City income taxes from Weisselberg's compensation, the defendants evaded the payment of approximately $210,923 in New York City resident income taxes from the tax year 2005 through 2013."
That's not all. The state also alleges that the defendants "arranged for tuition expenses for Weisselberg's family members to be paid by personal cheques drawn on the account of and signed by Donald J. Trump, and later drawn on the account of the Donald J. Trump Revocable Trust," the indictment states.
These tuition expenses for Weisselberg's family members should have been reported as employee compensation and taxable income, the document alleges. That added up to $359,058 from 2012 to 2017.
It was a similar story with leases on Mercedes Benz vehicles for Weisselberg and his wife, as well as Weisselberg's requests for payments for personal expenses related to his homes and an apartment maintained by one of his children.
"These requests included such items as new beds, flat-screen televisions, the installation of carpeting, and furniture for Weisselberg's home in Florida," the indictment says. They were reported internally as part of Weisselberg's annual compensation but they were not included on forms submitted to federal, state, and local tax authorities.
"As a result of the defendant's underreporting of Weisselberg's income from 2005 through 2017, Weisselberg concealed approximately $1,760,630 in compensation from tax authorities, unlawfully evaded hundreds of thousands of dollars in federal, state, and local taxes and requested and received refunds to which he was not entitled, including approximately $94,902 in refunds from the United States Internal Revenue Service and approximately $38,222 in refunds from the New York State Department of Taxation and Finance."
The document mentions an unindicted co-conspirator who is not identified by name. This unindicted coconspirator "agreed to and implemented a compensation scheme with the object of enabling Weisselberg to underreport his income to federal authorities, and thereby evade taxes and falsely claim federal tax refunds to which he was not entitled.