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Trump Organization charges could open the indictment floodgates


We have now had a few days to try to absorb the Manhattan district attorney’s criminal indictment against the Trump Organization and Chief Financial Officer Allen Weisselberg. Here are some topline takeaways from what could be the beginning of the end for the Trump Organization.

These are serious criminal charges for both Weisselberg and the Trump Organization.

These are serious criminal charges for both Weisselberg and the Trump Organization. The indictment alleges a 15-year-long criminal scheme involving deeply entrenched, systematic fraud to provide off-the-books compensation for the purposes of evading federal, state and New York City taxes. From 2005 through June 30, 2021 (the day before the indictment was unsealed), Weisselberg is alleged to have received more than $1.7 million in compensation that was hidden on a second set of corporate books. This allegedly enabled him to evade taxes — or, in a very real sense, steal from tax-paying citizens — $550,000 in federal taxes, $106,000 in New York state taxes and $240,000 in New York City taxes. Indeed, one of the 15 charges indicted against Weisselberg is grand larceny for stealing these tax dollars.

Weisselberg has pleaded not guilty.

There are several clues in the indictment that others are cooperating against Weisselberg and the Trump Organization. One of the clues is pretty overt: the indictment states that Weisselberg lied to his tax preparer about his status as a New York City resident. It’s never a good sign when a defendant’s tax preparer seems to be cooperating with prosecutors. Moreover, one of the charges involves a “conspiracy in the fourth degree.” Given that a conspiracy involves a criminal agreement between two or more individuals, there is at least one co-conspirator who has yet to be charged.

Another ominous sign is that the indictment refers to “Unindicted Co-Conspirator #1.” CNN has reported that this is a reference to Trump Organization controller Jeffrey McConney. As the company’s controller, McConney would have worked closely with Weisselberg. And he may have, at a minimum, been privy to the two sets of financial books. McConney testified before the New York grand jury earlier this month and therefore has immunity (New York law provides that anyone who appears before the grand jury automatically receives immunity against prosecution). Assuming McConney testified about the crimes of Weisselberg and the Trump Organization, this spells trouble for both.

There are also several indicators that more criminal charges will follow. In May, District Attorney Cy Vance convened a special, six-month grand jury to hear evidence in the Trump investigation. Ordinarily, New York grand juries sit for only four weeks. Vance’s special grand jury will continue to serve until November and it’s hard to believe that this indictment, issued at the beginning of their special six-month term, will be their only indictment. Moreover, New York State Attorney General Letitia James, who has partnered with Vance in the Trump investigation, pointedly stated after the issuance of the indictment that their investigation continues.

One of the more intriguing revelations in the indictment notes that besides Weisselberg, “two other employees received substantial amounts of compensation in the form of lodging in New York City and the payment of automobile leases.” Logically, these two unnamed Trump Organization employees may have committed the very same crimes for which Weisselberg was just indicted. Any way you slice it, this language about “two other employees” signals future indictments are likely.

Some have suggested that this case is just about some (allegedly illegal) “fringe benefits” — and is therefore unworthy of prosecution. Common sense and real-world experience belie this claim. A fringe benefit might be your boss gifting you a nice case of liquor at holiday time. By contrast, Vance alleges some of what the Trump Organization doled out included $360,000 in off-the-books money to pay for private tuition for Weisselberg family members and $200,000 paid to Weisselberg and his wife so they could ride around in high-end Mercedes vehicles. It is laughable for anyone to contend this is a case about inconsequential benefits.

All of that being said, it’s unclear how much prison time Weisselberg may actually be facing in the event of conviction. It’s true that the indictment contains 15 criminal counts. However, in typical prosecutorial practice, one criminal act can violate the law in multiple ways. When teaching my George Washington University criminal justice students, I use the following scenario to illustrate this point: If I walk up to someone on the street, punch them and take their wallet, I’ve essentially engaged in one criminal act. However, I likely would be charged with three separate crimes: assault for the punch, robbery for taking property by force and the theft of the wallet itself. However, if convicted, I would likely be sentenced to one period of incarceration for the three different crimes. This is what’s referred to as concurrent (as opposed to consecutive) sentencing.

This same principle is at play in the Weisselberg indictment. The most serious charge for Weisselberg is second-degree grand larceny, which has a max sentence of 15 years. However, it is also a probation-eligible offense (without mandatory jail time). Likely a judge would land in the middle, but given Weisselberg’s lack of a criminal history, his age, and other factors, the likelihood of a long jail sentence is low.

Even so, at age 73, Weisselberg will have to ask himself if he is willing to spend eight or five or even three years in prison, rather than flip on his boss Donald Trump. I have often seen people refuse to flip before they see their name listed as a marquee defendant in a substantial criminal indictment. But when Weisselberg saw the caption, “The People of the State of New York against Allen Weisselberg,” things likely got very real. Given my 30-year career as a prosecutor, I contend that the odds of cooperation went up by virtue of Thursday’s indictment.

Even so, at age 73, Weisselberg will have to ask himself if he is willing to spend eight or five or even three years in prison, rather than flip on his boss.

And what might this indictment do to the Trump Organization itself? The direct consequences involve monetary penalties and fines that could be imposed upon conviction. Besides any possible monetary impact, the collateral consequences could be worse as clients cancel contracts, and banks refuse to loan money or — even worse — call in existing loans the Trump Organization can’t satisfy. We need only recall how, during the Enron scandal, the Arthur Andersen accounting firm was convicted on one count of obstructing justice and soon after folded. The same fate could befall the Trump Organization.

Finally, there is the reality that a former U.S. president has never been criminally indicted. Now, a former president’s decades-old organization — his corporate namesake — has been criminally indicted. It’s not the same as an indictment of Trump personally. But given that he is a notorious micromanager who often bragged about being intimately involved in and responsible for all operations (and alleged successes) of the Trump Organization, it’s pretty darn close.

Trump has been investigated (think Robert Mueller) and is currently being investigated (think the DOJ, Georgia, and the state of New York) for any number of alleged crimes. The first prosecutor to charge him personally will face an uphill battle, not to mention massive, intense and prolonged scrutiny. However, once that particular barrier is broken, it may very well open the floodgates for other prosecutor’s offices to wade into the Trump-indictment pool. We will have to wait and see if the indictment of the Trump Organization and its CFO has substantially warmed up the presidential accountability waters — at least a few degrees.

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