The former longtime chief financial officer of the Trump Organization has been sentenced to five months in jail after pleading guilty to several tax crimes stemming from a sweeping investigation into Donald Trump’s business empire.
Allen Weisselberg pleaded guilty to 15 violations of New York tax law in August after prosecutors accused him of participating in a years-long “systemic” fraud scheme and a “sweeping and audacious illegal payment” arrangement in which Trump companies paid him generous benefits – including free rent, luxury car leases, and private school tuition for his grandchildren – that were not reported for tax purposes.
The Manhattan district attorney’s office said Weisselberg received $1.7m in such benefits under the scheme with the Trump family business. He is required to pay back roughly $2m in taxes and penalities and serve five years of probation.
Weisselberg was ordered to report to Rikers Island immediately after the hearing on 10 January.
His sentencing comes roughly one month after a New York City jury convicted two Trump Organization subsidiaries for what prosecutors described as a years-long tax avoidance scheme bolstered by a “culture of fraud and deception”. Weisselberg had agreed to cooperate with investigators to avoid a more severe sentence.
Weisselberg, who first started working for the Trump family in the 1970s, joins a growing list of prominent allies and associates connected to the former president who have been convicted of crimes as a result of actions they took while in his service, from his former personal attorney and campaign aides to his former national security adviser, chief White House strategist and a longtime consultant.
The former CFO served as a key witness to the prosecution in the Trump Organization case against his employer as part of his plea arragement.
In December, a jury found that the two companies under the umbrella of Mr Trump’s business empire – the Trump Corporation and the Trump Payroll Corporation – pursued a 13-year-long criminal plot to award executives with lavish perks and compensation while intentionally concealing such benefits to authorities to avoid paying taxes on them. The jury convicted the companies on all 17 counts against them.
The companies are scheduled to be sentenced on 13 January.
Mr Trump’s businesses could face fewer than $2m in fines, but the proceedings and the verdict could impact the company’s future business dealings. They also are likely to give some leverage to a blockbuster lawsuit filed by New York Attorney General Letitia James, who accused the former president of “grossly” inflating the value of his net worth by billions of dollars in an effort to fraudulently gain tax benefits and other benefits from insurers and financial institutions.
Her lawsuit seeks to recover $250m in lost revenue and penalties, as well as a judge’s order that would permanently bar the Trumps from holding any offices with businesses in the state. The New York judge overseeing that case has also blocked Mr Trump and his company from transferring assets without first notifying the court and the attorney general’s office. An independent monitor also is overseeing compliance with the order.
A statement from the Trump Organization n the wake of those proceedings has laid singular blame on Weisselberg, who “testified under oath that he ‘betrayed’ the trust the company had placed in him,” according to the company.
“The notion that a company could be held responsible for an employee’s actions, to benefit themselves, on their own personal tax returns is simply preposterous,” the statement added.
This is a developing story