Trump's company conducted internal tax review after he became president, executive says
A longtime Trump attorney oversaw an internal investigation of the Trump Organization's tax practices in 2017 and 2018, leading the company "to do things differently," an executive testified Tuesday.
The revelation came amid the second day of sworn testimony by Trump Organization controller Jeffrey McConney, who was the first witness called by the government in the company's New York criminal fraud trial.
McConney said the investigation was led by Sheri Dillon, an attorney most known for a January 2017 press conference held by then-President-elect Donald Trump in which she and Trump displayed stacks of papers they said were related to his companies' taxes.
McConney's testimony was halted later Tuesday after he tested positive for COVID-19. The trial is expected to resume on Monday, Nov. 7.
The Manhattan District Attorney's Office in 2021 charged former Trump Organization chief financial officer Allen Weisselberg and the company, through two corporate entities — the Trump Corporation and Trump Payroll Corporation — with more than a dozen criminal counts related to allegations that certain executives were provided with untaxed "indirect employee compensation." Weisselberg entered a guilty plea in the case in August. The company maintains its innocence of all charges.
Manhattan Assistant District Attorney Susan Hoffinger said during her opening statements Monday that company executives had been evading taxes for years, "but the evidence will show that when Donald Trump was elected president at the end of 2016, these companies finally had to clean up these fraudulent tax practices."
McConney said Tuesday that Dillon — a tax attorney at the law firm Morgan Lewis who worked for more than a decade on matters related to the Trump Organization — was brought in after Trump left the company in 2017 to assume the presidency.
A prosecutor asked if Dillon "basically directed you to clean things up at the Trump Organization?"
"She did," McConney replied.
He said the investigation resulted in a memo, completed in either late 2017 or early 2018.
"I was instructed as her boss to do things differently," McConney said.
Later, the prosecutor, Joshua Steinglass, asked, "and after Ms. Dillon conducted such an investigation, did there come a time when the Trump Organization and the Trump Corporation stopped engaging in some of the practices that led to these charges?"
McConney replied, "Yes, sir."
Dillon did not immediately reply to requests for comment.
As McConney began to describe the memo, attorneys for the Trump Organization objected, citing attorney-client privilege, and the judge called a sidebar. Discussion of the memo was then limited.
Prosecutors claim company executives used a variety of methods to "hide" luxury benefits from tax authorities dating back to at least 2005.
Attorneys for the company said Monday in their opening statements that it was Weisselberg alone who was hiding that he wasn't paying taxes on benefits.
Weisselberg is expected to be called as a witness during the trial. Weisselberg entered a guilty plea in the case in August, and agreed to testify as part of his plea arrangement. He will be sentenced after the trial, which is expected to last up to six weeks.
McConney testified Monday that his personal attorney is paid for by the Trump Organization, and that he met with the company's criminal defense attorneys on Sunday, among other occasions.
A request by prosecutors to treat him as a hostile witness was rejected by Judge Juan Merchan.
- In:
- The Trump Organization
- Donald Trump
- Allen Weisselberg
Graham Kates is an investigative reporter covering criminal justice, privacy issues and information security for CBS News Digital. Contact Graham at KatesG@cbsnews.com or grahamkates@protonmail.com
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
