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Prosecutor: Evidence shows Trump 'explicitly' sanctioned alleged tax fraud scheme at two companies

USA TODAY logo USA TODAY 12/3/2022 Kevin McCoy, USA TODAY
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NEW YORK - Former President Donald Trump "explicitly" sanctioned the alleged tax fraud scheme at the heart of the criminal trial of two Trump companies, a prosecutor argued Friday, citing trial evidence.

Manhattan Assistant District Attorney Joshua Steinglass made the assertion during closing arguments in the trial of the Trump Corporation and Trump Payroll Corporation. He said evidence showed "Mr. Trump is explicitly sanctioning tax fraud,” and suggested that Trump could be deemed an unindicted co-conspirator.

Allen Weisselberg stands between President-elect Donald Trump and Donald Trump Jr. in the lobby of Trump Tower in New York on Jan. 11, 2017. © Evan Vucci, AP Allen Weisselberg stands between President-elect Donald Trump and Donald Trump Jr. in the lobby of Trump Tower in New York on Jan. 11, 2017.

The assertion, and other mentions of Trump during closing arguments by Steinglass prompted defense lawyers to seek a mistrial, as the trial that began in late October appeared headed to a conclusion next week.

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"It can't be undone" from jurors' minds, said defense lawyer Michael van der Veen.

Acting Manhattan Supreme Court Justice Juan Merchan denied the request. However, he agreed to give the four-man, eight-woman jury instructions about the Trump mentions when the jurors return to court Monday for final instructions on the law and and the start of deliberations.

Depending on the judge's instruction, the argument from the prosecution could lead jurors to question whether someone higher in the Trump businesses than former CFO Allen Weisselberg potentially took a see-no-evil stance on the alleged tax fraud. That could buttress prosecutors' arguments that the alleged scheme kept executives happy and lowered payroll costs.

It could also help prosecutors' efforts to satisfy the requirements under New York state law for finding that a corporation has committed a crime.

Trump, who is mounting a third presidential campaign, is not charged in the case and has not appeared in the courtroom during the trial. However, he criticized the prosecution last week on Truth Social. And the former president continues to face a parade of legal developments and challenges as he seeks to return to the Oval Office.

Defense attorney Susan Necheles characterized the Steinglass assertions as "just grandstanding by the prosecutors."

She said Weisselberg, the disgraced former chief financial officer for Trump's business empire and the prosecution's star witness, "testified under oath that he hid his efforts to evade personal income taxes from President Trump and the Trump family and that he acted solely for his own personal gain."

"He repeatedly testified that he never told President Trump anything about how he was reporting items on his personal tax returns and the President Trump trusted him to do things correctly," said Necheles.

The exchanges Friday, including angry accusations between the prosecution and the defense, marked the end of evidence-presentation and arguments in the trial.

The Trump firms are accused of doling out off-the-books perks, including company-paid Manhattan rental apartments, leased luxury cars and untaxed, improperly issued bonuses to top executives who did not report the income on their tax returns.

Steinglass started the legal fireworks as he began his closing argument on Thursday. "Donald Trump knew exactly what was going on with his top executives," the prosecutor said.

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Weisselberg pleaded guilty to 15 crimes in an August agreement with prosecutors that promised him a sentence of roughly 100 days in jail, far lower than the 15-year maximum prison term he faced. In exchange, he agreed to testify truthfully at the trial of the two Trump companies.

Steinglass pointed to evidence showing Trump recommended that Weisselberg move into Manhattan from his Long Island home. Trump also convened a special meeting of the Trump Corporation that authorized him to sign a lease on the apartment for the sole use of Weisselberg and his wife, said the prosecutor.

As the prosecutor spoke, a slide of the lease's final page, with Trump's signature, was displayed on a monitor in the courtroom.

Steinglass also showed jurors a similar apartment lease for Matthew Calamari, the longtime chief operating officer of Trump's business world who has been deemed an unindicted conspirator in the case. The lease showed Trump's OK on that document too.

The prosecutor reminded jurors that Trump approved luxury auto leases for Weisselberg's wife, even though he knew she was not a company employee.

Weisselberg did not report the value of the apartment, car leases for his wife and similar auto leases for himself on his tax returns, trial evidence showed.

Steinglass also reminded jurors that evidence showed Trump approved company executives' bonuses and signed every check for those benefits. Many of those payments to Weisselberg and others came in the form of untaxed disbursements to independent contractors, and were included on the company's reports to the IRS, the evidence showed. 

"This whole (defense) narrative that Donald Trump was blissfully unaware is not true," argued Steinglass. He said the evidence rebutted defense closing arguments that Weisselberg and Jeffrey McConney, the Trump Organization controller, had "gone rogue" by orchestrating the alleged tax evasion scheme and concealing it from other top company officials.

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Those arguments prompted the defense motion for a mistrial.

"He made (Trump) an unindicted co-conspirator and said he sanctioned the tax fraud. It's a bias that he put on the jury and it cannot be undone," said van der Veen.   

"He can be a co-conspirator," responded Steinglass. "It has nothing to do that he is Donald Trump. It has to do that he is the president and CEO of these companies."

After hearing both sides' arguments, the trial judge said declaring a mistrial was "not even a thought."

When the jury returns on Monday, the trial judge will instruct them on New York state laws as they apply to the case.

Those instructions are expected to include an explanation of a New York penal law that establishes when corporations may be found guilty of committing crimes.

The law covers wrongdoing by "high a managerial agent acting within the scope of his employment and in behalf of the corporation."

That could be Weisselberg, and possibly McConney, prosecutors previously have argued. However, the new prosecution assertion by Steinglass this week could cause some jurors to question whether the "high managerial agent" could be someone even higher in the Trump Organization.

Jurors also will have to wrestle with the meaning of the phrase "in benefit of."

Ruling on that question in a session without the jurors earlier in the week, the trial judge said the prosecution has to show "there was some intent to benefit the corporation."

However, "you cannot overstate what that intent was," Merchan said.

►Documents: Appeals court overturns special master review of records found at Trump's Mar-a-Lago

►Closing arguments: Criminal tax fraud trial of 2 Trump companies nearing a close as prosecutor suggests Trump knew of scheme

►Star witness: Former Trump Organization CFO Allen Weisselberg holds back tears as he testifies in tax fraud trial

This article originally appeared on USA TODAY: Prosecutor: Evidence shows Trump 'explicitly' sanctioned alleged tax fraud scheme at two companies

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