Note on Trump's personal ledger was "deleted" before copy sent to grand jury, Trump Organization executive says
A note on Donald Trump's personal ledger was removed before his company turned over a copy to a grand jury investigating the Trump Organization for fraud, a company executive acknowledged in court Thursday.
The revelation came during the third day of sworn testimony by Trump Organization controller Jeffrey McConney, whose appearance in the company's New York criminal fraud trial was stalled for more than a week after he tested positive for COVID-19 on Nov. 1.
McConney was shown a page of Trump's ledger — an accounting of expenses paid from Trump's personal coffers — provided to prosecutors by accounting firm Mazars USA. Beneath a ledger entry for a 2012 payment of more than $30,000 to a private school appears the phrase "per Allen Weisselberg," referring to the company's former chief financial officer who in August entered a guilty plea to fraud and tax evasion.
McConney was then shown a copy of the same 2012 personal ledger page provided by the Trump Organization to a Manhattan grand jury in 2021. The phrase "per Allen Weisselberg" appeared to be missing.
"Somebody can go into the system in the general ledger program, you can change descriptions," McConney testified.
"Are you saying that someone went in and deleted the phrase 'per Allen Weisselberg'?" asked prosecutor Joshua Steinglass.
"Yes," McConney replied. Under further questioning, McConney was unable to say who deleted the entry.
The Manhattan District Attorney's Office in 2021 charged the Trump Organization and Weisselberg with more than a dozen criminal counts related to allegations that certain executives were provided with untaxed "indirect" compensation in the form of luxury benefits, including Manhattan apartments and private school tuition. The company maintains its innocence of all charges.
McConney was the first witness called by prosecutors to the stand, but his testimony was abruptly halted during the second day of the trial on Nov. 1, when his positive COVID test came in. Earlier that day, McConney testified that after Trump took office as U.S. president in 2017, a longtime attorney for the company oversaw an internal review of the company's tax practices, leading the Trump Organization "to do things differently."
Steinglass then asked if the review led to changes to "some of the practices that led to these charges?"
McConney said, "Yes, sir."
Prosecutors allege that executives at the company for more than a decade used a variety of methods to "hide" the luxury benefits from tax authorities.
One method alleged by prosecutors is that executives were paid in part each year as if they were independent contractors for various Trump Organization entities.
McConney said Thursday that a Mazars accountant at one point told him not to pay a Trump Organization attorney that way, because "there was concern that (he) could lose his legal license."
"Did [the accountant] tell you that he was not 'a fan' of this practice for any employee?" Steinglass asked.
"I believe that is the words he used, yes," McConney replied.
McConney said Thursday that the company stopped this payment practice in 2017 or 2018. Asked by Steinglass if the "2017 cleanup" was initiated because Trump became president, McConney said he believed it was a "coincidence."
"Nobody told me specifically that this change was because Mr. Trump became President Trump," McConney said.
In February, Mazars USA notified the Trump Organization that it was recanting a decade of annual financial statements prepared for Trump and his businesses, writing in a letter to the company that they "should no longer be relied upon." Mazars cited information that had surfaced in law enforcement investigations for its decision to cut ties with the Trump Organization.
Attorneys for the company said in their opening statements that there was no company fraud scheme, but instead that Weisselberg alone hid that he wasn't paying taxes on benefits.
Weisselberg, who agreed as part of his plea deal to testify in the case, is expected to be called as a witness during the trial. He will be sentenced after the company's trial.