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- The Trump Organization tax-fraud trial began week four with more testimony from a top payroll exec.
- The exec, Jeffrey McConney, said Donald Trump never looked at the company's books.
- But another Donald — Mazars accountant Donald Bender — saw it all and said nothing, McConney said.
Donald Trump was kept utterly in the dark about his own payroll books, jurors were told Monday, as the company's criminal tax-fraud trial began its fourth week in Manhattan.
The former president — or "President Trump," as Trump Organization lawyers persist in calling him — set his executives' salaries and bonuses, but was far too busy to ever look at the actual books, the company's ex-payroll head, Jeffrey McConney, testified.
Instead, an outside accountant named Donald Bender knew the payroll numbers backward and forward, McConney testified.
And it was Bender who signed off on the fuzzy math that let Trump's C-suite pocket hundreds of thousands of dollars a year in tax-free apartments and luxury cars, McConney told jurors, admitting the arrangement was illegal.
"Did you understand that Mr. Bender was paid to make sure that the Trump Corporation books were kept correctly?" McConney was asked by a defense lawyer.
"Yes," he answered, explaining that he figured if Bender had really thought something was off in the books, he'd have said so.
McConney told this tale of two Donalds during his fourth day on the stand in the state Supreme Court criminal trial, in which Trump's company, but not Trump himself, is facing a possible $1.6 million in penalties.
The testimony — that Trump was in the dark and blameless, while Bender knew everything and did essentially nothing — led to something of an afternoon donnybrook.
With the jurors excused, one of the lead prosecutors, Joshua Steinglass, accused McConney of being "joined at the hip" with the defense and with Trump's company.
A prosecution witness in name only, McConney, indeed, has stopped meeting with prosecutors and remains on Trump's payroll at $450,000 a year.
Defense lawyer Susan Necheles' questions, technically a cross-examination of a key prosecution witness, were certainly met with no resistance.
"Am I correct that President Trump never looked at the books?" she asked McConney before Monday's lunch break.
"Yes," the silver-haired executive agreed.
"How do you know that?"
"We never gave them to him," McConney answered.
"Did he have access to them?"
"No," he answered.
"President Trump was just not involved in the day-to-day of the accounting department is that correct?" the lawyer also asked.
"Yes," McConney answered.
Bender, on the other hand, had ample access, McConney testified.
Bender, McConney told jurors, handled most of the Trump Organization's tax matters as a partner at Mazars, the Trump Organization's longtime outside accounting firm. Mazars severed ties with Trump this February after questioning a decade worth of "discrepancies."
"Did you believe that Donald Bender was closely scrutinizing the books?" Necheles, the defense lawyer, asked McConney, who answered, "Yes."
"Was that part of his job to tell you, as you understood it, ways to correct your books?" she asked. "Did you understand it to be part of Mr. Bender's job to correct your entries?"
"Yes," and "yes," McConney answered.
But on re-direct, the prosecutor, Steinglass, confronted McConney, showing him a 2015 "engagement letter," or employment agreement, between Mazars and the Trump Organization.
In the letter, which was projected on an overhead screen for jurors, Mazars made clear that it is actually Trump's company that's responsible "for the substantial accuracy of the financial records."
Mazars' work for Trump "does not include any procedures designed to detect errors, irregularities, or illegal acts, including fraud," the accounting firm told Trump's company in the letter.
"Do you believe you lived up to your end of this agreement?" Steinglass asked the witness, who answered, with apparent discomfort, "I believe so, yes."
McConney was at that point being so hesitant — Steinglass called him "evasive," complaining he's "basically endorsing" whatever Necheles asked — that the trial judge, New York Supreme Court Justice Juan Merchan, granted the prosecutor's request to have him declared a hostile witness.
That status gave the prosecution the benefit of asking more detailed, yes-or-no questions for the rest of the afternoon on Monday and on again Tuesday when McConney's testimony will continue for a fifth day.
Steinglass soon used that new hostile witness status to hammer McConney with a series of yes-or-no questions about the ex-controller's earlier claim that Trump was somehow walled off from his own payroll books.
"You're not suggesting that he couldn't see any transaction made by any one of his executives upon demand?" the prosecutor asked McConney of Trump.
"No," the ex-controller conceded.
Steinglass also asked McConney about at least one occasion when Bender, the outside accountant from Mazars, raised a red flag about how the Trump Organization was paying its executives.
Why, Steinglass asked, didn't McConney ask Bender for more detail on that red flag?
"Didn't you want to know?" the prosecutor asked.
"Probably not," McConney admitted.
Testimony continues Tuesday with the trial's most important witness, ex-CFO Allen Weisselberg, scheduled to take the stand before the day's end.
Also a prosecution witness — but like McConney, still on Trump's payroll — Weisselberg is critical to the company's primary defense, which is that the company cannot be held liable because there was no intent to benefit the company.
It's a "Weisselberg did it for Weisselberg" defense that Trump Organization lawyers spent time Monday laying the groundwork.
"Was it your belief that this whole thing was done for Allen Weisselberg's benefit?" Necheles asked McConney.
"Yes," he answered.
"And Allen Weisselberg never said to you that in doing this he intended to benefit the Trump Corporation in any way?"
"That's correct," McConney answered.
A spokesperson for Mazars declined to comment on Bender's involvement in the case, saying only, "Due to our industry's professional obligations. Mazars cannot discuss any clients — current or former, the status of our relationships, or the nature of our services in a public forum without client consent or as required by law.
"We remain committed to fulfilling all of our professional and legal obligations."
from Business Insider https://ift.tt/13dz7eh
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