Trump Organization and Finance Chief Seek Dismissal of Fraud Charges
The Trump Organization and its longtime chief financial officer asked a judge on Tuesday to dismiss the criminal charges against them, arguing in court filings that the case was politically motivated and was only brought because the defendants were linked to former President Donald J. Trump.
The Trump Organization, Mr. Trump’s family business, was charged by the Manhattan district attorney’s office last summer with organizing a yearslong scheme to compensate a number of its executives with off-the-books luxury perks, allowing them to avoid paying taxes. Its chief financial officer, Allen H. Weisselberg, was charged with participating in the scheme and receiving a rent-free apartment and leased Mercedes-Benzes, among other benefits.
The indictment accused Mr. Weisselberg of failing to pay state and federal taxes on about $1.7 million in perks and charged him with grand larceny for obtaining tax refunds to which it said he was not entitled.
Mr. Trump was not charged, nor was he accused of any wrongdoing. But after the indictments last summer, the district attorney’s office convened a new grand jury and continued to investigate whether Mr. Trump had defrauded his lenders by inflating the value of his assets to receive the best possible loan terms.
The New York attorney general, Letitia James, whose office is participating in the criminal investigation, is also conducting a parallel civil inquiry into some of the same conduct.
The office of the new Manhattan district attorney, Alvin Bragg, declined to comment on Tuesday’s filings. The office, which will have a chance to respond in its own court papers in the coming weeks, announced the charges in July under Mr. Bragg’s predecessor, Cyrus R. Vance Jr.
In separate court filings on Tuesday, lawyers for Mr. Trump’s company and Mr. Weisselberg raised a number of legal arguments, including the contention that Mr. Trump’s company had been improperly singled out for prosecution.
Both Mr. Weisselberg and the company have denied all wrongdoing.
Mr. Trump’s lawyers, Susan R. Necheles, Alan S. Futerfas and Gedalia M. Stern, said that the prosecutors had “targeted Donald Trump’s associates and companies for investigation and prosecution based on their animus toward his speech and political views.” They listed statements Ms. James made about Mr. Trump while she was running for office in 2018 and said that the district attorney had embraced Ms. James’s investigation, despite knowing it was “motivated by illicit animus.”
In their court papers, Mr. Weisselberg’s lawyers echoed that claim, calling it “an unprecedented prosecution” and describing their client as “collateral damage” in the Manhattan district attorney’s and New York attorney general’s “yearslong pursuit of Mr. Weisselberg’s longtime boss, Donald J. Trump.”
Such “selective prosecution” arguments often fall flat with judges, but the lawyers for the Trump Organization and Mr. Weisselberg also argued that the district attorney’s office had failed to meet a legal deadline to file some of the charges and that prosecutors lacked sufficient evidence to support the case.
In addition, Mr. Weisselberg’s lawyers, who include Bryan C. Skarlatos, Mary E. Mulligan and Rita Glavin, argued that the prosecutors did not have the authority to charge Mr. Weisselberg over his federal income tax returns, which are the jurisdiction of the I.R.S.
Mr. Weisselberg’s lawyers also contended that the charges were impermissible because of an earlier grant of immunity that their client received when he testified before an unrelated federal grand jury focused on Mr. Trump’s longtime fixer, Michael D. Cohen.
Mr. Weisselberg’s testimony, in 2018, came as federal prosecutors in Manhattan were investigating Mr. Cohen for paying hush money to a pornographic actress who had said she had an affair with Mr. Trump.
Mr. Weisselberg’s lawyers claim that his testimony in that case “sparked a vendetta that Mr. Cohen has pursued against Mr. Weisselberg in every forum available,” including by cooperating with the district attorney’s investigation.
As such, the lawyers said, Mr. Weisselberg’s testimony against Mr. Cohen set off a chain of events that culminated in the indictment last summer, even though Mr. Weisselberg had testified in the federal investigation under the promise of immunity. (Mr. Weisselberg’s lawyers claim that Mr. Cohen was so essential to the district attorney’s investigation that the prosecutor’s office nicknamed the inquiry after him, calling it “The Fixer.”)
It is unclear whether a judge will find that argument persuasive. Although Mr. Weisselberg agreed to testify in exchange for a promise that federal prosecutors would not charge him with the specific conduct he testified about, he was not granted immunity for all his conduct at the Trump Organization.
Once the district attorney’s office responds, the judge overseeing the case, Juan Merchan, will decide whether to dismiss some of the charges. Such motions are standard, and judges rarely toss out criminal cases altogether.
If Justice Merchan declines to dismiss the case, it is likely to continue to trial in State Supreme Court in Manhattan. He has tentatively set a late summer trial date.
The filings on Tuesday followed a brutal stretch for the Trump Organization, which is also contending with Ms. James’s civil investigation. In a court filing last week, the state attorney general revealed that Mr. Trump’s longtime accounting firm had cut ties with him and essentially retracted a decade of his financial statements.
Both her civil inquiry and Mr. Bragg’s criminal investigation are centered on whether Mr. Trump used those statements to improperly inflate the value of his assets.
Ms. James had sought to question Mr. Trump under oath, which he has resisted, and last week, a judge sided with her. The judge ordered Mr. Trump and two of his adult children to face questioning from Ms. James’s office in the coming weeks, a major blow to the Trumps, who say they intend to appeal the ruling. (If they are interviewed, they are likely to decline to answer questions, invoking their Fifth Amendment right not to incriminate themselves).
Lawyers for Mr. Trump also argued in that hearing that Ms. James’s investigation was politically motivated. But the judge dismissed that argument, saying that the attorney general had a sufficient basis for continuing her investigation
Although Ms. James does not have the ability to charge Mr. Trump criminally, she can sue him, and in a court filing last month, she suggested that he had already amassed significant evidence against Mr. Trump’s family business, accusing it of engaging in “fraudulent or misleading” practices.
One piece of evidence she cited was Mr. Weisselberg’s admission that the company had overstated the value of Mr. Trump’s penthouse in Trump Tower. In testimony with the attorney general’s office, Mr. Weisselberg acknowledged that the company had overvalued the apartment by “give or take” $200 million.