The much-anticipated indictment of the Trump Corporation and components and its Chief Financial Officer (“CFO”), Allen Weisselberg, has been released.  The caption is The People of New York v. The Trump Corporation, et. al. (N.Y. Supreme Court – no number available).  The indictment is here.  (The pdf copies on the web were not adequately OCR’d; I had this copy OCR’d using Adobe Acrobat text recognition; the OCRing came out much better than the copies I found in my quick searches.)

Here are my first general comments (which I may supplement or revise later):

1. The general thrust of the indictment had been reported before the indictment came out.  Basically, through various schemes, certain individuals (including, for purposes of this indictment, the CFO) caused the corporation to underreport and underpay tax liabilities.  Essentially, these individuals caused the corporation to pay compensation that did not appear on the books and filings as corporation subject to various tax obligations – including reporting income of the individuals benefiting from the payments, avoiding payroll tax to the payors and payees, etc.  

2.  This is a fairly common pattern in a closely held corporation except that the payments often go to the owner and the owner’s family rather than to an employee (here the CFO).  In this case, the owner is Trump and the owner’s family are the Trump children and spouses.  Nothing is said about Trump’s off-the-books use of corporate assets, but with the egregious conduct for Weisselberg, one has to wonder whether charges against Trump are waiting in the wings, with the prosecutor hoping Weisselberg will flip.  Given Trump’s alleged use of oral instructions (or signals) to avoid putting his conduct in writing to the extent possible, somebody like the CFO would be an important (perhaps not a necessary) witness against Trump if he were indicted.

3.  In this regard, paragraph 5 of the indictment alleges “One of the largest individual beneficiaries of the defendants’ scheme was Allen Weisselberg.”  The inference is that Weisselberg was not the largest beneficiary.  Based on what I have inferred about the organization, the biggest fish ahead of Weisselberg in the organization were Trump and perhaps Trump’s family members.  Could Trump or family members be the larger beneficiary (ies) inferred in the quoted wording?

4.  And, in the conspiracy count, an “Unindicted Co-Conspirator #1 is named.  (See p. 14.)  Further, the conspirators including “Unindicted Co-Conspirator #1 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.”  (See p. 15.)   The question is whether acts that would constitute federal tax crimes also state tax crimes committed in the state if the federal fisc is the object of the crime.  I suppose federal tax evasion that could be charged as such is larceny in the state as well.

5.  Given the fact that serious federal crimes were involved under the alleged scheme, will the federal government now get into the act?  And, if the federal government wants a pound of flesh from the CFO, wouldn’t it also want it for the guy in charge if indeed he orchestrated or participated in the scheme.

6.  One of the interesting and damning aspects of the charges is that Weisselberg had set compensation and when he employed “off the books” compensation, he reduced his compensation accordingly.  More importantly, he kept records to show the reduction.  Who were those records for?

7.  Another possible reference to Trump is a lease which was part of the scheme that was signed by “the Trump Corporation, acting through the president, * * * “with a rider designating Allen Weisselberg and his spouse as the sole occupants who would use the [*14] apartment as a primary residence.”  (See Second Count pp. 13-14.)  Who was that “president” of the Trump Corporation?  And, in this regard, the Unindicted Co-Conspirator shows up in the acts constituting Overt Acts of the conspiracy.  (See Second Count, p. 14, Overt Act 2.)  It is interesting that the indictment infers that the president (whoever that was) is not Co-Conspirator #1 (otherwise the pseudonym would have been used).

8.  The defendants’ lawyers have alleged that this pattern of conduct is really relatively small and would not be indicted in the Federal universe.  I don’t think that is true.  Had this not involved the President of the U.S., this pattern of conduct, including the sheer scope, brazenness and amounts involved, might well have attracted criminal investigation and prosecution resources.  Should it be different just because a President is involved at some level?

9.  Keep in mind that the Wartime Suspension of Limitations Act, 18 U.S.C. § 3287, here, (see also blogs here) probably keeps the federal tax evasion statute of limitations from the late 1990s “until 5 years after the termination of hostilities as proclaimed by a Presidential proclamation, with notice to Congress, or by a concurrent resolution of Congress.”  Beyond that, on the civil side, the statute is open forever for seeking the tax, the fraud penalty and interest on both.  See § 6501(c)(1) & (c)(2), here.