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New York State Investigations of Trump and Related

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filly
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Re: New York State Investigations of Trump and Related

#576

Post by filly »

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Re: New York State Investigations of Trump and Related

#577

Post by much ado »

Thanks filly! I especially liked this paragraph. I asked about this issue earlier:
Given the facts alleged, it is hard to fathom that the IRS – if it agrees that those facts are true – would not promptly indict the defendants for federal income tax fraud. Failing to bring charges would amount to saying that overt and deliberate tax cheating of the most brazen kind need not be addressed criminally. If a private individual, rather than the Manhattan DA had somehow gathered all of this information and reported it to the IRS, he or she would be in a great position to claim a whistleblower award. And while federal authorities often refrain from piling on, by bringing their own charges when state authorities are already prosecuting a case; the indictment here makes explicit that the fraud was, in the main, directed against the federal government itself.
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Re: New York State Investigations of Trump and Related

#578

Post by Gregg »

RVInit wrote: Sat Jul 03, 2021 7:54 am I think the ABC news anchor might have a point. Trump may not ditch Weisselberg like he ditches everyone else. Weisselberg is different and served the family for a very long time. And given his age, all they really need to do is file motions and run out the clock until he keels over. I would be kind of surprised if Weisselberg serves a day in prison, Trump and his lawyers are experts at keeping litigation going for years and years until the other party finally gives up. In this case NY may not give up but Weiseelberg may just die before this ever actually goes to trial.
They'll bankrupt him with legal fees first.
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Re: New York State Investigations of Trump and Related

#579

Post by Suranis »

The whole thing that "trump keeps litigation going for years" is a bit of a Myth. Trump actually settles quite a lot of the lawsuits he was involved in, particularly if the guy on the other side has deeper pockets than Trump does, or has access to info Trump does not want getting out. "The I never settle" thing came from his self generated myth.
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Re: New York State Investigations of Trump and Related

#580

Post by raison de arizona »

RVInit wrote: Sun Jul 04, 2021 7:38 pm
Slim Cognito wrote: Sun Jul 04, 2021 6:20 pm if there are really two books, or spreadsheets, isn't that proof that Weisselberg knew what he was doing was wrong? trump underbusing the guy is a given, but I don't understand how AW can pull off the "I didn't realize what I was doing was wrong," defense if he willfully covered it up with a fake sets of books/spreadsheets.

And are we absolutely sure there are two sets of books, or could that be someone's interpretation/assumption?
Yes, we know there were two sets of books. That is where the fraud charge comes from. They knew full well what they were doing. Weisselberg was taking these gifts in lieu of salary so that his taxes would be lower, and Trump kept the second set of books to make certain he didn't accidentally pay Weisselberg too much. The value of the apartment and cars were subtracted from his salary in order to arrive at the amount he would be paid by check. That amount is the only amount that tax was deducted for, and the only amount Wiesselberg declared as income. Oops.
:yeahthat:
I’m seeing this ignorance defense being thrown around, but I don’t understand how it could possibly work when they are/were keeping two sets of books. Or is the argument that they were ignorant that keeping two sets of books was a Bad Thing?
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Re: New York State Investigations of Trump and Related

#581

Post by much ado »

covfefe wrote: Mon Jul 05, 2021 1:18 am
RVInit wrote: Sun Jul 04, 2021 7:38 pm
Slim Cognito wrote: Sun Jul 04, 2021 6:20 pm if there are really two books, or spreadsheets, isn't that proof that Weisselberg knew what he was doing was wrong? trump underbusing the guy is a given, but I don't understand how AW can pull off the "I didn't realize what I was doing was wrong," defense if he willfully covered it up with a fake sets of books/spreadsheets.

And are we absolutely sure there are two sets of books, or could that be someone's interpretation/assumption?
Yes, we know there were two sets of books. That is where the fraud charge comes from. They knew full well what they were doing. Weisselberg was taking these gifts in lieu of salary so that his taxes would be lower, and Trump kept the second set of books to make certain he didn't accidentally pay Weisselberg too much. The value of the apartment and cars were subtracted from his salary in order to arrive at the amount he would be paid by check. That amount is the only amount that tax was deducted for, and the only amount Wiesselberg declared as income. Oops.
:yeahthat:
I’m seeing this ignorance defense being thrown around, but I don’t understand how it could possibly work when they are/were keeping two sets of books. Or is the argument that they were ignorant that keeping two sets of books was a Bad Thing?
No, the ignorance defense cannot work if the criminals kept two sets of books. Read this article that filly posted above. It is very much worth the time. Here's the direct link:

https://www.justsecurity.org/77331/the- ... fits-case/

One section of the article:
5. Fraudulent double bookkeeping – Implementing this scheme required having two inconsistent sets of records: (a) the fake ones for tax reporting that excluded a part of his compensation (under the parties’ financial deal and the company’s secret bookkeeping), and (b) the true accounting records that the company maintained privately. Experts on tax enforcement agree that keeping two sets of books, in this fashion, is “a red flag” and “a classic indication of an overt act of evasion,” often causing the government to have a “slam-dunk case.”
Having two sets of books completely demolishes the "ignorance" argument. So sad!

ETA: Weisselberg will be facing a lot of jail time, so Weisselberg will probably flip.
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Re: New York State Investigations of Trump and Related

#582

Post by Suranis »

Going back to Enron, Jeff Skilling basically claimed he had no idea what Andy Fastow was doing. And ya he didn't know all of it, but he sure as hell knew what Fastow was doing to hide Enron losses.
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Re: New York State Investigations of Trump and Related

#583

Post by Foggy »

Pro tip:

A ton of criminals have two sets of books. The trick is to make sure they never find the real ones.
Out from under. :thumbsup:
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Re: New York State Investigations of Trump and Related

#584

Post by Slim Cognito »

We've all seen the tv shows and movies where the smart ass detective has to keep the mafia accountant and his "real" book alive until the trial, but in real life, are any mafia accountants stupid enough to keep an actual real book? It seems to me the smart way would be to give da boss any leftovers in cash for him to distribute as he sees fit.

If I was writing the screenplay, I'd have the accountant code some computer game of solitaire or chess, then make sure only the boss and his most trusted family members had the key.

I mean, when I heard they had AW's real book, sorry spreadsheet, I was flabbergasted. Guess AW had gotten away with it for so many decades, he thought he was untouchable.
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Re: New York State Investigations of Trump and Related

#585

Post by RTH10260 »

Slim Cognito wrote: Mon Jul 05, 2021 8:44 am We've all seen the tv shows and movies where the smart ass detective has to keep the mafia accountant and his "real" book alive until the trial, but in real life, are any mafia accountants stupid enough to keep an actual real book? It seems to me the smart way would be to give da boss any leftovers in cash for him to distribute as he sees fit.

If I was writing the screenplay, I'd have the accountant code some computer game of solitaire or chess, then make sure only the boss and his most trusted family members had the key.

I mean, when I heard they had AW's real book, sorry spreadsheet, I was flabbergasted. Guess AW had gotten away with it for so many decades, he thought he was untouchable.
The bosses will always want to know as near as possible the real value of all their assets, declared and hidden. The accountant may be playing with his own life and embeezle the bosses riches. But nowadays hidding the hidden accounting is easier, no thick books, simply an encrypted thumbdrive. Only to be used on a trusted pc. Beware of the FBI installing a keylogger device.
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Re: New York State Investigations of Trump and Related

#586

Post by zekeb »

Foggy wrote: Mon Jul 05, 2021 7:14 am Pro tip:

A ton of criminals have two sets of books. The trick is to make sure they never find the real ones.
Then how would you be able to brag to your base that you are screwing the government?
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Re: New York State Investigations of Trump and Related

#587

Post by Chilidog »

Reposting this because it got burried at the page break.


Help me out here.

The indictment lists the Trump Organization as a defendant.

What exactly does this mean?

If the Trump Organization is found guilty, what judicial punishments can it face?
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Re: New York State Investigations of Trump and Related

#588

Post by raison de arizona »

much ado wrote: Mon Jul 05, 2021 2:19 am No, the ignorance defense cannot work if the criminals kept two sets of books. Read this article that filly posted above. It is very much worth the time. Here's the direct link:

https://www.justsecurity.org/77331/the- ... fits-case/
Cool, thanks! That makes a lot of sense, great article. I was struggling to understand how they (meaning Trump, et all) could claim ignorance while maintaining two sets of books. The answer is, of course, they can't!
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There's a lot of extra sleazy stuff in there that is clearly illegal (I especially liked the part about the IRS not minding cash payments, that's just fringe benefits! :thumbsup: ) As a taxpayer, this just makes me bananas. I pay so much freaking tax, and don't get me wrong, I'm happy to, but watching these asshats get away with not paying any just sucks. And as a resident of NYC for 15 years, I've paid an awful lot of city income tax, which once again, I'm happy to do. But serious. Fuck them. I'm sorry he's an old Grandad, but I hope he goes to jail for as long as possible. And has to pay all his back taxes. With interest. And penalties. Just like anybody else.
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Re: New York State Investigations of Trump and Related

#589

Post by chancery »

Chilidog wrote: Mon Jul 05, 2021 10:28 am If the Trump Organization is found guilty, what judicial punishments can it face?
A corporate defendant can be fined, and that's about it. I saw one fleeting comment to the effect that statues involved limit the punishment to $10,000 per ... something, which doesn't seem like very much, but I don't remember the source or whether it was reliable. I haven't reviewed the statutes involved.

As has been discussed in this thread and elsewhere, thee can be collateral consequences to a corporate conviction. It will likely put some stress on the relationship between the Trump Organization and its creditors, but there's no real way to know how severe that stress will be. It seems unlikely to me that there will be a wave of creditors attempting to foreclose on the properties underlying the loans, so long as the TO keeps reasonably current on payment.
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Re: New York State Investigations of Trump and Related

#590

Post by Chilidog »

chancery wrote: Mon Jul 05, 2021 10:41 am
Chilidog wrote: Mon Jul 05, 2021 10:28 am If the Trump Organization is found guilty, what judicial punishments can it face?
A corporate defendant can be fined, and that's about it.

:snippity:

It seems unlikely to me that there will be a wave of creditors attempting to foreclose on the properties underlying the loans, so long as the TO keeps reasonably current on payment.
thanks.

Keeping payments up is the rub, though.

A lot of that is going to depend on the loan structure as well.

This is from last year and it illustrates the major loans due.

https://www.forbes.com/sites/danalexand ... 63d9495f37
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Re: New York State Investigations of Trump and Related

#591

Post by noblepa »

While it would seem that keeping two sets of books precludes an ignorance defense for Weisselberg and the TO, can Trump personally claim ignorance?

IOW, can he plausibly argue that he did not know that AW was using TO funds to pay for personal expenses, while not reporting it as income and that he was allowing himself and others to live rent-free in TO owned apartments?

IIRC, the Sarbanes-Oxley law was passed in the wake of the Enron debacle. One of its provisions is that it specifically requires executives to take responsibility for the financial statements of the corporation. This provision was, I believe, put in the law specifically to preclude the ignorance defense. "I didn't know what they were doing" is met with "It is your responsibility to know".

Does Sarbanes-Oxley come into play at all in this case?
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Re: New York State Investigations of Trump and Related

#592

Post by somerset »

noblepa wrote: Mon Jul 05, 2021 11:02 am
Does Sarbanes-Oxley come into play at all in this case?
No. SOX only applies to public companies.
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Re: New York State Investigations of Trump and Related

#593

Post by somerset »

chancery wrote: Mon Jul 05, 2021 10:41 am
Chilidog wrote: Mon Jul 05, 2021 10:28 am If the Trump Organization is found guilty, what judicial punishments can it face?
As has been discussed in this thread and elsewhere, thee can be collateral consequences to a corporate conviction. It will likely put some stress on the relationship between the Trump Organization and its creditors, but there's no real way to know how severe that stress will be. It seems unlikely to me that there will be a wave of creditors attempting to foreclose on the properties underlying the loans, so long as the TO keeps reasonably current on payment.
What about loan clauses requiring a debtor company to keep accurate records? Two sets of books would seem to violate that requirement? Keeping current on existing debt might hold the lenders at bay for now. But I’d think any new debt would be out of the question.
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Re: New York State Investigations of Trump and Related

#594

Post by Chilidog »

After Trump was elected in 2016, didn't Don Jr. Take over the day to day operations of the company?

The ignorance defence might just apply to him...
:rimshot:

But seriously, I'm thinking that these expenditures were brought up during regular staff meetings for Trump's approval first.

Think about it, it's the carrot that he used to keep his employees loyal to him. Only employees in good standing received these "perks."

Futher, I'm willing to bet that the comptroller was in on these meetings.

So that's one witness.....
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Re: New York State Investigations of Trump and Related

#595

Post by sugar magnolia »

noblepa wrote: Mon Jul 05, 2021 11:02 am While it would seem that keeping two sets of books precludes an ignorance defense for Weisselberg and the TO, can Trump personally claim ignorance?

IOW, can he plausibly argue that he did not know that AW was using TO funds to pay for personal expenses, while not reporting it as income and that he was allowing himself and others to live rent-free in TO owned apartments?

IIRC, the Sarbanes-Oxley law was passed in the wake of the Enron debacle. One of its provisions is that it specifically requires executives to take responsibility for the financial statements of the corporation. This provision was, I believe, put in the law specifically to preclude the ignorance defense. "I didn't know what they were doing" is met with "It is your responsibility to know".

Does Sarbanes-Oxley come into play at all in this case?
He can claim anything he wants to. As far as I know, he isn't personally named in the investigation or the law suit.
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Re: New York State Investigations of Trump and Related

#596

Post by filly »

So I was struck by the 15 year time period in the indictment. If this Weisselberg off the books arrangement started in 2006, that was about the time that the economy started to tank. I haven't looked up what was happening in the real estate market in NYC but that would be interesting. I also read about Weisselberg cutting the commissions a dedicated agent was making. It appears there were some serious financial issues (there always are) at the TO and actions were taken to ameliorate the bleeding.

From what I've read, Weisselberg's income was capped at approximately $900,000/year. The scheme reduced his on the books income to somewhere in the $500,000 and change range, so the approximately $400K was made up with these other unreported expenditures. I think that's why the "internal spreadsheet" was created, to make sure Weisselberg wasn't exceeding the $900K income cap. I suppose it could've been all Weisselberg's idea, but that spreadsheet that accounted for the real money had to also exist to show *someone* else what the actual total compensation was. And, who could that *someone* have been?

Of course the DA is going to have to have some evidence because you can't try a case based on suspicions. But that's the picture that I see from all of this. YMMV.
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Re: New York State Investigations of Trump and Related

#597

Post by sugar magnolia »

filly wrote: Mon Jul 05, 2021 11:42 am So I was struck by the 15 year time period in the indictment. If this Weisselberg off the books arrangement started in 2006, that was about the time that the economy started to tank. I haven't looked up what was happening in the real estate market in NYC but that would be interesting. I also read about Weisselberg cutting the commissions a dedicated agent was making. It appears there were some serious financial issues (there always are) at the TO and actions were taken to ameliorate the bleeding.

From what I've read, Weisselberg's income was capped at approximately $900,000/year. The scheme reduced his on the books income to somewhere in the $500,000 and change range, so the approximately $400K was made up with these other unreported expenditures. I think that's why the "internal spreadsheet" was created, to make sure Weisselberg wasn't exceeding the $900K income cap. I suppose it could've been all Weisselberg's idea, but that spreadsheet that accounted for the real money had to also exist to show *someone* else what the actual total compensation was. And, who could that *someone* have been?

Of course the DA is going to have to have some evidence because you can't try a case based on suspicions. But that's the picture that I see from all of this. YMMV.
Statute of limitations issue maybe? I would guess the book diddling had been going on since Sr. was running the company.
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Re: New York State Investigations of Trump and Related

#598

Post by chancery »

Chilidog wrote: Mon Jul 05, 2021 10:54 am
chancery wrote: Mon Jul 05, 2021 10:41 am It seems unlikely to me that there will be a wave of creditors attempting to foreclose on the properties underlying the loans, so long as the TO keeps reasonably current on payment.
Keeping payments up is the rub, though.
Of course. But foreclosure is messy, time-consuming, and expensive. As I said upthread, there's a long history of Trump creditors losing their shirts in bankruptcy proceedings. A creditor who is looking at recovering only about 50% after allowing for the cost and delay of foreclosure might put up with late payments and squirrelly books and records for quite a while.

(Darn it, I wish woodworker would chime in here. He know much more about this stuff than I do.)
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Re: New York State Investigations of Trump and Related

#599

Post by filly »

I would like to know how criminal defense lawyers are charging the Trump Org. and Weisselberg. In garden variety criminal cases, the criminal defense lawyers I know charge an up front fee (usually very hefty), in advance, and do the work. If the work becomes more than they think the up front fees covers, they may ask for another non-refundable retainer. But I think traditional white collar defense lawyers bill a bit differently, i.e. a big retainer that they bill hours against. That's because most white collar defense lawyers work for regular law firms. So, I'd be interested to hear from FRP or someone else who might have insight into these billing arrangements.

I ask because legal fees in these cases add up very quickly. IIRC Michael Cohen initially used white collar criminal defense lawyers from a traditional firm. The fees became enormous (mainly due to the review of the seized documents) and they dropped him (he probably still owes them money). Sometimes legal fees punish defendants more than the courts do.
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Re: New York State Investigations of Trump and Related

#600

Post by filly »

chancery wrote: Mon Jul 05, 2021 11:50 am
Chilidog wrote: Mon Jul 05, 2021 10:54 am
chancery wrote: Mon Jul 05, 2021 10:41 am It seems unlikely to me that there will be a wave of creditors attempting to foreclose on the properties underlying the loans, so long as the TO keeps reasonably current on payment.
Keeping payments up is the rub, though.
Of course. But foreclosure is messy, time-consuming, and expensive. As I said upthread, there's a long history of Trump creditors losing their shirts in bankruptcy proceedings. A creditor who is looking at recovering only about 50% after allowing for the cost and delay of foreclosure might put up with late payments and squirrelly books and records for quite a while.

(Darn it, I wish woodworker would chime in here. He know much more about this stuff than I do.)
And most of these creditors loaned money to Trump and his business with eyes wide open that he was a bad credit risk. Many of them have the personal guaranty of Trump, but I don't know if that's worth much at all.
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