When the former Trump Organisation executive Barbara Res saw that the company’s long-time finance boss had turned himself in to face state tax charges, her mind turned to Donald Trump.
“This is it,” Ms Res said. “I think that it’s going to destroy the Trump empire.” Louise Sunshine, who was once an executive vice president, had a similar thought. “It’s the beginning of the end of the brand,” she said. But her former boss? “Donald will always survive — even if everybody else around him drops dead.” After Abe Wallach saw the news, the main thing he felt was sorry for Allen Weisselberg. “He stayed too close to the fire and he got burned,” said the company’s former vice president for acquisitions. “And that’s true of lots of people.” The Trump Organisation and its chief financial officer pleaded not guilty on Thursday to charges of tax fraud, scheme to defraud, conspiracy and falsifying business records — the first criminal case to emerge from the years-long investigation of Trump and his business dealings.
The indictment alleges that Mr Weisselberg received $1.76m (€1.5m) in unreported benefits over 15 years on which he should have paid taxes.
To outsiders, it’s the biggest legal challenge yet among many that the ex-president is facing. The way the billionaire’s current allies put it, he’s the victim of a witch-hunt that’s relying on obscure rules taxing perks. And for the former executives who’ve watched the real estate heir up close, through the twists and turns of his momentous rise, operatic falls and many improbable comebacks, the charges mean something may have finally changed.
“He’s definitely in a situation he’s never been in before — because his company has been indicted,” said Ms Res, who oversaw Mr Trump’s construction in the 1980s and wrote a book about it called.
In a statement, the Trump Organisation called the case “a criminal prosecution involving employee benefits that neither the IRS nor any other district attorney would ever think of bringing,” and said it “is not justice; this is politics.” Mr Weisselberg will fight the charges in court, according to his lawyers.
When financiers see the charges, their thoughts may turn to the company’s ability to refinance more than $590m of debt coming due within the next four years — more than half of which Mr Trump personally guaranteed.
The direct consequences of any criminal conviction “could be a massive fine,” probation, or “some type of court supervision,” said former prosecutor Miriam Baer.