Explosive Implications of Jeff McConney’s Reported Grand Jury Testimony Regarding the Trump Organization

This could be the death knell for Allen Weisselberg, long time CFO of the Trump Organization and reputed eyes and ears of Individual-1. As Controller of the Trump family company, McConney had to work closely with Weisselberg regarding all financial facets of the organization. Whatever marching orders Weisselberg received from ‘the Donald’ — those orders were handed down to McConney to — as Captain Kirk used to tell Mr. Spock — make it so!

This can best be illustrated by scrutiny of the SDNY Sentencing Memorandum relative to Michael Cohen wherein no other Trump Organization executives were ever charged by SDNY.. McConney was in the processing chain as either Executive 1 or Exec 2 with Allen Weisselberg believed to be the other primary executive in the chain. McConney can in fact confirm these designations once and for all.

He can then corroborate the charging document as to some of its most salient features.

Specifically, McConney can confirm that Weisselberg directed him to process the false invoices submitted by Michael Cohen with regard to “legal retainer” relative to the hush money reimbursements the Trump Organization made to Michael Cohen in the hundreds of thousands of dollars when in fact there was no legal retainer agreement or legal services performed.

McConney can confirm who actually signed off on the hush money payments to Cohen and the fact that the company books were “cooked” to expense as a business expense, what could not be a more personal expense. Key here would be any emails or other communications provided by Allen Weisselberg relative to the manipulation of the Company’s financial records and who all at the Trump Organization knew about it. Evidence of knowledge and intent are essential elements of a Criminal charge as opposed to any Civil findings.

The concept of falsification of company books and records is germane because New York State law has a statute that calls for Misdemeanor prosecution of those involved in falsifying corporate books and records. This charge can be elevated to a Felony should the falsification involve the commission of other Felonies e.g. Tax Fraud. There is a significant difference in Sentencing depending on whether the Prosecutors decide to charge a Misdemeanor or Felony. Maximum flexibility concerning charging offenses and their potential sentences, is desirable to Manhattan DA Cy Vance and New York State AG Letitia James when approaching Allen Weisselberg. They want his testimony against other Trump Organization executives including the big kahuna himself — Individual-1.

Referenced above is the potential for Tax Fraud charges to be brought. Should the false invoices referenced above be tracked by McConney to phony tax deductions for ‘legal expenses’ on the corporate tax returns, consideration could be given to charging the Trump Organization itself as well as the involved parties for conspiring to falsify corporate tax returns or in the alternative — aiding and abetting the making of a false corporate tax return.

Another potential tax fraud area that Mr. McConney can provide critical insight and testimony would be the tax treatment provided Allen Weisselberg’s son also a company employee when he was alleged to be provided substantial fringe benefits in the hundreds of thousands of dollars through the payment of private school tuition payments for his son as well as the receipt of a rent free luxury apartment for the residence of his family. Did McConney as company controller have any discussions with the CFO as to how to handle the tax treatment of these fringe benefits. Were any forms W-2 or !099 submitted to either of the Weisselbergs and to the Tax authorities reporting these fringe benefits received over the years? If not, why not? How were these payments (tuition payments) handled on the company books and records assuming that the tuition were paid by company checks. How was the rent free apartment handled on the company records? Were any records falsified to conceal or secrete either the tuition payments or the rent free apartment? McConney’s testimony on these matters would make a powerful impact on a Grand Jury, particularly if accompanied by documentation that he could testify and bring alive. Somebody has to pay the taxes on the fringe benefits meted out and the prosecutors could be looking at a game of musical chairs between the Weisselbergs in this regard. It will be of great interest to see who will be left standing when the music stops.

Should Allen Weisselberg not want to see his son charged with Tax fraud and go to jail he may feel obliged to cut a deal with the DA. One area of interest that McConney can point the way and Weisselberg can confirm should he decide to cooperate — would be the assertions that company financial statements were manipulated to inflate the value of assets when applying for financing from financial institutions and minimized when it came to paying property taxes. Once again McConney can hem in Weisselberg by his testimony and any documentation he may possess to corroborate his testimony such as emails. Such evidence would highlight the intent of the Trump Organization executives involved, with regard to preparation of multiple books, records and financial statements contingent on the need of the day.

The prosecutors are now coming down the back stretch of a very long contest to obtain and apply documentary evidence of the Trump Organization financial dealings. They have likely obtained terabytes of data and documents that have been uploaded to a database. These documents have presumably been analyzed and scrutinized by forensic accountants who have advised the prosecutors what testimony is needed to bring the millions of documentary evidence to life in a fashion that would sustain multiple indictments of fraud.

Jeff McConney is the key witness the prosecutors need along with all of their hard won documentary evidence — to move up the chain of Trump Organization executives and to place Allen Weisselberg in a box, or perhaps a more appropriate metaphor — a vise. The prosecutors have now, or will shortly — a buffet of charges they can bring to squeeze the CFO and obtain his testimony critical to the successful prosecution of various Trump Organization executives and finally bring to justice the one and only long time teflon Don accused of corporate and personal financial fraud.

Cy Vance and Letitia James — make it so!

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Martin Sheil

Martin Sheil

Retired Special Agent IRS Criminal Investigation; Federal Contractor Deloitte & DOJ OCDETF; Letters of Commendation from Directors FBI Louis Freeh & Comey