Falsehoods Unchallenged Only Fester and Grow
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I can’t underscore enough how devastating an indictment would be to the Trump Org. Every lender would call their loans and no way Trump Org can pay them all, likely leading to bankruptcy. Weisselberg may not cooperate without more serious charges, but any charge will doom the TO.
Yeah, there's probably an event of default in the loan agreements related to indictments or convictions, but (just speculating here) it's hard for me to imagine that there isn't a materiality carve-out. Companies get in various kinds of tax and other kinds of regulatory trouble all the time, and I've yet to see anything to suggest that the penalty for a few under-the-table benefits would amount to more than lunch money.I can’t underscore enough how devastating an indictment would be to the Trump Org. Every lender would call their loans ....
https://www.nytimes.com/2021/06/25/nyre ... arges.htmlTrump Organization Could Face Criminal Charges in D.A. Inquiry
Several lawyers who specialize in tax rules have told The New York Times that it would be highly unusual to indict a company just for failing to pay taxes on fringe benefits. None of them could cite any recent example, noting that many companies provide their employees with benefits like company cars.
In general, those types of benefits are taxable, although there are some exceptions, and the rules can be murky.
I know the my husband’s employer - a very large U.S. company - included personal use of a company car in the employee’s W-2s. I think that omitting those fringe benefits from a W-2 would be much more common in a closely-held corporation.chancery wrote: ↑Fri Jun 25, 2021 8:22 pmhttps://www.nytimes.com/2021/06/25/nyre ... arges.htmlTrump Organization Could Face Criminal Charges in D.A. Inquiry
Several lawyers who specialize in tax rules have told The New York Times that it would be highly unusual to indict a company just for failing to pay taxes on fringe benefits. None of them could cite any recent example, noting that many companies provide their employees with benefits like company cars.
In general, those types of benefits are taxable, although there are some exceptions, and the rules can be murky.
https://www.usatoday.com/story/news/pol ... 350802001/Charges against Trump Organization expected as soon as next week, Trump attorney says
Kevin Johnson USA TODAY
Criminal charges are expected to be filed against the Trump Organization as soon as next week in connection with the Manhattan district attorney's long-running inquiry into the financial dealings of former President Donald Trump's namesake company, a Trump attorney said Friday. Trump attorneys met with local prosecutors Thursday in an attempt to persuade officials not to proceed, Trump Organization lawyer Ron Fischetti said in an interview with USA TODAY. “In my more than 50 years of practice, never before have I seen the District Attorney’s Office target a company over employee compensation or fringe benefits," Fischetti said. "Even the financial institutions responsible for causing the 2008 financial crises, the worst financial crisis since the Great Depression, were not prosecuted.”
A spokesperson for Manhattan District Attorney Cyrus Vance Jr. declined to comment. The timing of the possible criminal charges was first reported by the New York Times. Fischetti said prosecutors have not succeeded in securing the cooperation of Allen Weisselberg, the Trump Organization's longtime chief financial officer and the most knowledgeable of the former president's business operations. For more than two years, Vance has been digging deep into the operations of the Trump family business for possible fraud involving banks, insurance companies and taxing entities.
The New York prosecutor won a major, public victory in February when Trump's accounting firm was forced to turn over eight years of tax records as part of a protracted legal battle that ended at the Supreme Court. Vance's investigation appeared to have accelerated last month with the disclosure that a special grand jury had been convened to consider possible evidence of criminality by the president, his business associates or the company itself. The district attorney has been examining the far-flung Trump Organization's banking, tax and insurance transactions with a focus on whether the company manipulated property values to obtain favorable loans and reduced tax rates.
Prosecutors also have been weighing hush-money payments made to women on Trump's behalf and how that money was documented. Former Trump personal attorney and fixer Michael Cohen has acknowledged meeting with New York prosecutors multiple times in cooperation with their investigation. Cohen has told USA TODAY that he would not comment on any aspect of the case, citing the ongoing investigation and his potential role in it as a key witness for the prosecution. But he has commented extensively on Twitter on how grand jury proceedings significantly accelerate the investigation. Cohen, who pleaded guilty in 2018 to federal charges that included campaign-finance violations for paying hush money to women who claimed to have had sex with Trump and for lying to Congress, has repeatedly pointed to Weisselberg as most knowledgeable of the former president's business operations.
When an organization is indicted, who gets indicted?The Trump Organization Has One More Day To Convince Prosecutors Against Charges
Probably not. You can't be liable for acts that others commit.Slim Cognito wrote: ↑Mon Jun 28, 2021 9:21 am How often are company lawyers able to convince prosecutors not to prosecute?
https://www.huffpost.com/entry/trump-or ... ff5abbd711
When an organization is indicted, who gets indicted?The Trump Organization Has One More Day To Convince Prosecutors Against Charges
Quick story - many, many years ago when I was a kid, my dad was offered a promotion to Vice President of the company he worked for. He refused the title and kept the one he already had telling us that, as VP, he'd be legally liable for any wrongdoing and he didn't know what the other VPs and their underlings were doing. Was he right?
All of that is perfectly true, but, the higher up you go in an organization, the more responsibility you take on. That means that, if the VP in the office next to yours engages in some shenanigans, you might be drawn into the investigation. You might be pressured to testify against him/her. You might even be suspected of being complicit.johnpcapitalist wrote: ↑Mon Jun 28, 2021 10:35 amProbably not. You can't be liable for acts that others commit.Slim Cognito wrote: ↑Mon Jun 28, 2021 9:21 am How often are company lawyers able to convince prosecutors not to prosecute?
https://www.huffpost.com/entry/trump-or ... ff5abbd711
When an organization is indicted, who gets indicted?The Trump Organization Has One More Day To Convince Prosecutors Against Charges
Quick story - many, many years ago when I was a kid, my dad was offered a promotion to Vice President of the company he worked for. He refused the title and kept the one he already had telling us that, as VP, he'd be legally liable for any wrongdoing and he didn't know what the other VPs and their underlings were doing. Was he right?
I have been a VP or above for my entire career in financial services. That allows me to make certain commitments on behalf of the firm. It doesn't require me to assume liability for the bad acts of others. The only time I was ever in a position where an underling was breaking rules, I was the one that called the SEC, and I was never investigated. From time to time, other VP's would be involved in breaking SEC rules such as trading regs, and the finger of blame, either legally or morally, never pointed to me.
There are plenty of cases where VP's (or CEO's) are asked to resign in the event that subordinates misbehaved (either criminally or in violating company policy), but that's usually when the VP should have known that supervision was lax. But that's typically an image preservation exercise for the company rather than a way for the comapny to avoid criminal sanctions.
The above is true regardless of title or level in the hierarchy. The original post was about the assumption that something magical happens when you reach the title of VP or above that means any VP is in some way inherently at least partly responsible for bad acts of other VP's. That's wrong. And it's describing a different circumstance than what you're describing.noblepa wrote: ↑Mon Jun 28, 2021 11:24 am All of that is perfectly true, but, the higher up you go in an organization, the more responsibility you take on. That means that, if the VP in the office next to yours engages in some shenanigans, you might be drawn into the investigation. You might be pressured to testify against him/her. You might even be suspected of being complicit.
Again, this is true irrespective of specific titles. And "willful blindness" and negligence standards are applied in specific situations. Going back to my Wall Street experience, if a VP in Treasury is looting cash from the firm, a VP of Investment Banking will not be accused of negligence if he had nothing to do with the accused. However, a VP of Internal Audit is going to come under the microscope for failing to spot the looting of substantial amounts of cash, and would be held for negligence or willful blindness, if the evidence pointed to it.The kind of financial crimes that law enforcement agencies are interested in are often the kind that can only be done by ranking officers of the corporation. While you can't be held responsible for the actions of the VP next door, you might run into a "knew or should have known" kind of situation, and it may be argued that you had a responsibility to act and failed to do so.
There are very specific reasons for this, and it covered only the specific case of misleading financial statements for public companies of a certain size, and no other corporate bad behavior.That's why, after the Enron debacle, they passed a law that said that CEO's MUST take responsibility for financial statements, even if they were fraudulently prepared by others.
*IANAL and have very little knowledge about these issues.johnpcapitalist wrote: ↑Mon Jun 28, 2021 12:28 pmAgain, this is true irrespective of specific titles. And "willful blindness" and negligence standards are applied in specific situations. Going back to my Wall Street experience, if a VP in Treasury is looting cash from the firm, a VP of Investment Banking will not be accused of negligence if he had nothing to do with the accused. However, a VP of Internal Audit is going to come under the microscope for failing to spot the looting of substantial amounts of cash, and would be held for negligence or willful blindness, if the evidence pointed to itThe kind of financial crimes that law enforcement agencies are interested in are often the kind that can only be done by ranking officers of the corporation. While you can't be held responsible for the actions of the VP next door, you might run into a "knew or should have known" kind of situation, and it may be argued that you had a responsibility to act and failed to do so.
They're also looking at tax fraud regarding property values. Trump would undervalue properties on tax returns but overvalue his properties to banks.
I don't know any of that but I do know he retired not too long afterwards due to bad health, and he took a retirement payout instead of the usual monthly or quarterly pymts or whatever they did back in the late 70s/early 80s. Which turned out to be good because a couple of years after he retired, they went bankrupt.slq wrote: ↑Mon Jun 28, 2021 2:56 pm One additional thing to consider when considering the liability of a corporate officer: the form of the corporate entity. Corporations, LLCs, LLPs, and such are formed to shield the officers and other employees from individual liability. To get at them, you have the uphill battle of piercing the corporate veil. However, the legal possibility of piercing the veil does include some risk for corporate officers. It may be, Slim, that your dad was offered VP of a company that was not an entity that provided such a shield at that time.
The investigation is very broad. There's been a lot of talk about untaxed perks because, imo, a large number of Trump's employees have received those perks. Investigators are trying to get as many people to flip as possible.The Manhattan district attorney’s office has informed Donald J. Trump’s lawyers that it is considering criminal charges against his family business, the Trump Organization, in connection with fringe benefits the company awarded a top executive, according to several people with knowledge of the matter.
The prosecutors had been building a case for months against the executive, Allen H. Weisselberg, as part of an effort to pressure him to cooperate with a broader inquiry into Mr. Trump’s business dealings. But it was not previously known that the Trump Organization also might face charges.
If the case moves ahead, the district attorney, Cyrus R. Vance Jr., could announce charges as soon as next week, the people said. Mr. Vance’s prosecutors have been conducting the investigation along with lawyers from the office of the New York State attorney general, Letitia James.
Any indictment would be the first to emerge from the long-running investigation and would raise the startling prospect of a former president having to defend the company he founded, and has run for decades, against accusations of criminal behavior.
Prosecutors recently have focused much of their investigation into the perks Mr. Trump and the company doled out to Mr. Weisselberg and other executives, including tens of thousands of dollars in private school tuition for one of Mr. Weisselberg’s grandchildren, as well as rents on apartments and car leases.
They are looking into whether those benefits were properly recorded in the company’s ledgers and whether taxes were paid on them, The New York Times has reported.
Mr. Trump’s lawyers met on Thursday with senior prosecutors in the district attorney’s office in hopes of persuading them to abandon any plan to charge the company, according to several people familiar with the meeting. Such meetings are routine in white-collar criminal investigations, and it is unclear whether the prosecutors have made a final decision on whether to charge the Trump Organization, which has long denied wrongdoing.
“In my more than 50 years of practice, never before have I seen a district attorney’s office target a company over employee compensation or fringe benefits,” said Ronald P. Fischetti, a personal lawyer for Mr. Trump. “It’s ridiculous and outrageous.”
Several lawyers who specialize in tax rules have told The New York Times that it would be highly unusual to indict a company just for failing to pay taxes on fringe benefits. None of them could cite any recent example, noting that many companies provide their employees with benefits like company cars.
Still, an indictment of Mr. Trump’s company could deal a blow to the former president just as he has started to hold rallies and flirt with a return to politics. The Trump Organization is inseparable from Mr. Trump, acting as the corporate umbrella for a portfolio of hotels, golf clubs and other real estate, most of which are branded with his name.
It is unclear whether Mr. Trump will ultimately face charges himself. The investigation, which began three years ago, has been wide-ranging, examining whether the Trump Organization manipulated the value of its properties to obtain favorable loans and tax benefits, people with knowledge of the matter have said.
The inquiry is also examining the organization’s statements to insurance companies about the value of various assets and any role that its employees — including Mr. Weisselberg — may have played in hush-money payments to two women during the 2016 presidential campaign.
Mr. Trump has derided the investigation by Mr. Vance, a Democrat, as a politically motivated “witch hunt.” On Saturday, he repeated that criticism, issuing a statement that read only, “The greatest Witch Hunt in US history continues!”
Mr. Trump unsuccessfully tried to fight a subpoena from Mr. Vance’s office seeking eight years of his personal and corporate tax returns, a fight that twice reached the United States Supreme Court.
A spokesman for the district attorney’s office declined to comment on Friday. A lawyer for Mr. Weisselberg, Mary E. Mulligan, also declined to comment. A spokeswoman for the Trump Organization did not respond to a request for comment.
The meeting on Thursday between Mr. Trump’s lawyers and the prosecutors, held on a video call and lasting more than an hour and a half, was arranged by Mr. Fischetti, the people familiar with the meeting said. He is a former law partner of Mark F. Pomerantz, a former federal prosecutor and defense lawyer whom the district attorney’s office enlisted to help lead the inquiry into Mr. Trump and his business.
At least one representative of the New York attorney general’s office also attended the meeting, one of the people said. Ms. James’s office had been conducting a civil inquiry into some of the same issues that the district attorney’s office is examining, but joined Mr. Vance’s criminal investigation in recent weeks.
In the coming days, Mr. Trump’s lawyers plan to continue to try to persuade prosecutors not to charge the company, according to a person briefed on the matter.
Companies, even private ones like the Trump Organization, are subject to criminal prosecution, and can face fines and other penalties if they are found guilty. Charges also can threaten an organization’s relationships with banks and business partners and cause lasting reputational damage.
The indictments could increase pressure to cooperate on Mr. Weisselberg, who could seek to cut a deal with prosecutors to testify against Mr. Trump in exchange for leniency.
Mr. Weisselberg’s intimate knowledge of the Trump Organization — he has worked at the company for decades and was one of the top executives when Mr. Trump was in the White House — would make his cooperation an enormous asset to investigators looking at all aspects of the company. Because of that, he has been a central focus of scrutiny in the district attorney’s investigation, with particular attention paid to the benefits that he and his family received.
In general, those types of benefits are taxable, although there are some exceptions, and the rules can be murky.
Mr. Trump depends heavily on Mr. Weisselberg, who has continued to work at the Trump Organization while under investigation. In his book “Think Like a Billionaire,” Mr. Trump credited Mr. Weisselberg for doing “whatever was necessary to protect the bottom line.”
And few things grate at Mr. Trump like the prospect of disloyalty. Close allies have turned on him in the past, including his former personal lawyer and fixer, Michael D. Cohen, whom Mr. Trump has labeled a “rat.”
Mr. Cohen, who pleaded guilty to federal charges related to hush money payments to two women who said they had romantic affairs with Mr. Trump, is cooperating with the Manhattan district attorney’s investigation. After pleading guilty, Mr. Cohen said that it was Mr. Weisselberg who had helped the Trump Organization to disguise the reimbursements that Mr. Cohen received for paying off one of the women.
Mr. Weisselberg was not accused of any wrongdoing by federal prosecutors, and Mr. Trump did not pardon him in his final days in office, though he was said to have considered doing so. (A pardon would not have given Mr. Weisselberg immunity from state charges.)
After Mr. Cohen pleaded guilty in 2018, Mr. Trump expressed confidence that Mr. Weisselberg had not turned on him.
“One hundred percent he didn’t,” Mr. Trump told reporters for Bloomberg. “He’s a wonderful guy.”
Mr. Weisselberg is, in certain respects, the polar opposite of his longtime boss. Discreet and unassuming, the financial chief has avoided attention even as he has brought his family into Mr. Trump’s orbit. One of his sons, Barry, was the property manager of Trump Wollman Rink in Central Park. Another, Jack, works at Ladder Capital, one of Mr. Trump’s lenders.
But Mr. Weisselberg has done his part to contribute to Mr. Trump’s aura of wealth and power. In 2005, when The New York Times attempted to determine how much money Mr. Trump had, Mr. Weisselberg provided a list of assets that he said would show that Mr. Trump was worth $6 billion.
When the list of assets appeared to add up to only $5 billion, Mr. Weisselberg excused himself.
“I’m going to go to my office and find that other billion,” he said.
