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Closing arguments begin in the Trump Organization's tax fraud trial

MARY LOUISE KELLY, HOST:

Closing arguments began today in the tax fraud trial against Donald Trump's company. In a Manhattan courtroom, lawyers representing the company urged a jury to find it not guilty of a number of financial crimes. NPR's Ilya Marritz was in that courtroom all day long and is here now. Hey, Ilya.

ILYA MARRITZ, BYLINE: Hi, Mary Louise.

KELLY: The charges in the people of the state of New York against the Trump Corporation include tax fraud, falsifying business records, scheme to defraud, conspiracy. Refresh us exactly what is at the heart of this case.

MARRITZ: This case was the result of a long-running investigation by the Manhattan district attorney, which, it went all the way to the U.S. Supreme Court twice. At its core, it is about the lavish and allegedly illegal way in which the Trump businesses compensated top employees over the course of a decade and a half. So these top employees earned six-figure salaries. But beyond that, we know that they got big noncash benefits, which were not reported to tax authorities. For example, the former chief financial officer got two leased Mercedes Benzes, rent on a luxury apartment building, plus parking and utilities, even furniture. All of that was a form of income. Taxes were supposed to be paid on it, but taxes were not paid.

KELLY: Were not paid, so that sounds like tax evasion.

MARRITZ: Yes. And former long-time Trump CFO Allen Weisselberg pleaded guilty to 15 counts over the summer, including grand larceny and tax fraud. He will do prison time, and he has to repay almost $2 million. The question now at the heart of this trial, which has stretched over the full month of November, is whether the Trump businesses also committed crimes. Those businesses are the Trump Corporation, which is more or less an alias for the Trump Organization that we've all heard of, and the Trump Payroll Corporation, which handled salaries. Those are the defendants.

KELLY: And their lawyers, lawyers for the defendants, are saying - what? - no, we did not commit crimes?

MARRITZ: Yeah, they're saying it all comes down to intent. Weisselberg did this for Weisselberg, as one attorney said again and again. It was the CFO, Allen Weisselberg, who organized this scheme. He did it without the knowledge of the Trumps - not Donald, not Don Jr., not Eric. And he did it to benefit himself, not his employer. In fact, Weisselberg said he was ashamed and felt he had betrayed the Trump family. It's one of the few times that he showed emotion when he took the stand as the star witness in this case.

KELLY: So how did prosecutors respond?

MARRITZ: So that was in the morning that we heard from the defense. This afternoon, it was prosecutor's turn, and they really ridiculed the idea that this was a one-man operation, a one-man betrayal. They said the documents tell a different story. For example, we can see that several executives, not just Allen Weisselberg, took payments from Trump as independent contractors. Why does that matter? This kind of income, also known as 1099 income, is taxed differently. Being independent contractors incorrectly enabled them to open Keogh retirement accounts and take tax deductions that are really only supposed to be for people who are actually self-employed. And crucially, it meant the Trump business was avoiding Medicare taxes. So prosecutors say it was really a win-win. Top executives benefited but so did the Trump companies. Lastly, prosecutors really mocked this idea that Allen Weisselberg had in some way betrayed the Trumps. In fact, he is still on payroll. And last August, the Trumps threw him a 75th birthday party in Trump Tower. It happened to fall on the very day he pleaded guilty.

KELLY: And briefly, Ilya, lay out the timeline for wrapping up this case.

MARRITZ: Tomorrow morning, prosecutors will finish their summation, then its jury instructions. Next week, we expect the jury to deliberate, and they will have to decide whether they believe the former president's family business committed crimes, whether to brand the Trump Organization, in essence, a felon.

KELLY: That is NPR's Ilya Marritz. Thanks so much.

MARRITZ: You're very welcome. Transcript provided by NPR, Copyright NPR.

Ilya Marritz
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