Donald Trump is facing a potentially crippling financial and political blow as state prosecutors consider filing criminal charges against his family business this week.
Prosecutors in New York could soon bring an indictment against the Trump Organization related to the taxation of lucrative perks that it gave to top executives, such as use of apartments, cars and school tuition.
The 45th president is not expected to be personally charged but the legal drama could bankrupt his company by damaging its relationships with banks and other business partners, as well as clouding his political comeback.
Ron Fischetti, a lawyer for the Trump Organization, held a virtual meeting with prosecutors last Thursday for about 90 minutes in an effort to dissuade them from pursuing criminal charges against the company.
“The charges are absolutely outrageous and unprecedented if indeed the charges are filed,” Fischetti told the Associated Press on Friday. “This is just to get back at Donald Trump. We’re going to plead not guilty and we’ll make a motion to dismiss.”
Fischetti and his colleagues had until Monday to make their final arguments against charges being brought, according to a report in the Washington Post.
The long-running investigation by Cyrus Vance, the Manhattan district attorney, began after Trump’s former lawyer and fixer, Michael Cohen, paid hush money ahead of the 2016 presidential election to two women who alleged that they had sexual encounters with Trump; Trump denies the claims.
There is now a particular focus on Allen Weisselberg, 73, the longtime chief financial officer of the Trump Organization, the private real estate conglomerate. Prosecutors are examining his son Barry’s use of a Trump apartment at little or no cost, cars leased for the family, and tuition payments made to a school attended by Weisselberg’s grandchildren.
Such gifts and perks are worth tens or hundreds of thousands of dollars. If the Weisselbergs failed to account properly for that money on tax returns and other financial filings, they could be in legal jeopardy. But Fischetti insists that any criminal charges based on fringe benefits would represent a speculative break from precedent.
“We looked back 100 years of cases and we haven’t found one in which an employee has been indicted for fringe benefits and certainly not a corporation,” he told the AP. “[To be a crime] it would have to be for the benefit of the corporation with the knowledge of the corporation. They don’t have the evidence at all.”
Even so, a point of intrigue is whether Weisselberg will remain loyal to the former president or turn informant, potentially testifying against Trump – the company’s owner – his son Don Jr and Eric, who are executive vice-presidents, and his daughter, Ivanka.
Trump, beaten by Joe Biden in last November’s election, has long sought to dismiss the investigation as a “witch-hunt” and remains politically active. He returned to campaign rallies on Saturday, intends to be heavily involved in the 2022 midterm elections and could run for president again in 2024. But there are signs that the walls are closing in.
Vance, investigating “possibly extensive and protracted criminal conduct”, has been scrutinising Trump’s tax records, subpoenaing documents and interviewing witnesses, including Trump insiders and company executives. A grand jury was recently empaneled to look at the evidence.
Meanwhile, Letitia James, the New York state attorney general, said she was assigning two lawyers to work with Vance on the criminal investigation while she continues her own civil investigation of Trump’s business.
James’s office has been examining whether the Trump Organization inflated the values of some properties to obtain better terms on loans, and lowered their values to obtain property tax breaks.
Court records show some overlap between Vance’s and James’ separate investigations, including their interest in Seven Springs, a 212-acre estate outside Manhattan that Trump purchased in 1995. James is examining a $21.1m tax deduction taken when Trump agreed not to develop the property after local opposition thwarted his plan to build a golf course, and a separate plan to build luxury homes was shelved.
Trump has angrily denounced both investigations. In a statement released on Monday, he claimed the case was an extension of the Democrats’ “witch hunt” against him. “They will do anything to stop the MAGA movement (and me),” he said, referring to the Make America Great Again campaign slogan and insisting that the Trump Organization had merely done “things that are standard practice throughout the US business community, and in no way a crime”.
The ex-president added: “Having politically motivated prosecutors, people who actually got elected because they will ‘get Donald Trump’, is a very dangerous thing for our Country. In the end, people will not stand for it. Remember, if they can do this to me, they can do it to anyone!”
Trump’s loss of power in Washington now deprives him, his family and his company of legal protections he enjoyed while in the White House.
The District of Columbia attorney general’s office, for example, is suing the Trump Organization and presidential inaugural committee over the alleged misuse of more than $1m for use of event space at the Trump hotel in Washington during Trump’s inauguration in January 2017.
Ivanka, who was a senior adviser at the White House, sat for a deposition with investigators last December, but is in no imminent danger of criminal charges.