Melissa L. Jampol, Member of the Firm in the Health Care & Life Sciences and Litigation practices, in the firm’s New York office, was quoted in the Associated Press, in “Tax Law Experts See ‘Strong’ Case Against Trump Org. CFO,” by Ken Sweet, Michael R. Sisak, and Eric Tucker.
Following is an excerpt:
Companies give perks to their employees all the time. Many top executives at Fortune 500 companies have access to a corporate jet for personal use, a company apartment, or an expense account for fancy meals. Even lower-level employees regularly get access to perks like tuition reimbursement or cash to join a gym. …
But the extravagant perks prosecutors say the Trump Organization lavished onto its CFO Allen Weisselberg — apartments, cars, cash for holiday tips, tuition for his grandchildren to name a few — are well beyond the level of compensating a valued employee, some tax law experts said.
And the case against Weisselberg appears to be much stronger than was originally expected by those watching the progress of the Manhattan District Attorney’s investigation of the Trump Organization, its employees and its namesake leader. …
Melissa Jampol, who as a former assistant district attorney in Manhattan specialized in prosecuting white-collar crimes, said the indictment’s allegations stretched far beyond the allegations of fringe benefit abuse that some had presumed would be the crux of the case.
“I think the major takeaway is that there’s a lot more going on here that’s alleged in the indictment than people were aware of previously,” said Jampol, an attorney at the law firm of Epstein Becker Green. …
The company kept internal records that tracked employee compensation, and in those records, Weisselberg’s rent, the tuition payments for his grandchildren, his cars and other things were all listed as part of his compensation package. The company even reduced Weisselberg’s payroll checks to account for the indirect compensation he was getting in free rent, the indictment said.
But that compensation was recorded differently in the company’s general ledger and none of it was reported to tax authorities, according to prosecutors.
“There’s the set that was the formal ledger and there’s the set that was Weisselberg’s compensation calculations,” Jampol said.
Smaller cases involving similar practices pop up not infrequently. A Queens-based plumbing contractor was sentenced to 20 months in prison just last month. Sergei Denko was found to have cashed $5 million in checks to fund an off-the-books payroll system, avoiding paying roughly $732,000 in employment taxes. Out on Long Island, a diner owner was convicted in September of avoiding $130,000 in employment taxes as well. …
Though some standalone tax offenses can be handled civilly or administratively, the allegations of other misconduct — including grand larceny — help explain why prosecutors would treat this scheme as deserving of criminal prosecution, Jampol said.
But that doesn’t mean the allegations, which will require proof of willfulness, will be easy to establish in court.
“That’s really going to be the burden that the DA’s office is going to have to prove is that there was a scheme here, and that it wasn’t just a series of mistakes or misunderstandings,” she added.
