Allen H. Weisselberg, for decades one of Donald J. Trump’s most trusted executives, has reached a deal to plead guilty on Thursday and admit to participating in a long-running tax scheme at the former president’s family business — a serious blow to the company that could heighten its risk in an upcoming trial on related charges.
Mr. Weisselberg will have to admit to all 15 felonies that prosecutors in the Manhattan district attorney’s office accused him of, according to people with knowledge of the matter. And if he is called as a witness at the company’s trial in October, he will have to testify about his role in the scheme to avoid paying taxes on lavish corporate perks, the people said.
But Mr. Weisselberg will not implicate Mr. Trump or his family if he takes the stand in that trial, the people said, and he has refused to cooperate with prosecutors in their broader investigation into Mr. Trump, who has not been accused of wrongdoing.
Even so, his potential testimony will put the Trump Organization at a disadvantage and is likely to make Mr. Weisselberg a central witness at the October trial, where the company will face many of the same charges.
On cross-examination, the Trump Organization’s lawyers could accuse Mr. Weisselberg of pleading guilty only to spare himself a harsher sentence; under the terms of the plea deal, Mr. Weisselberg, who was facing up to 15 years in prison, will spend as little as 100 days behind bars. They might also argue that it would be unfair to hold the Trump Organization accountable for a crime that was not committed by the Trump family, who control the company.
But Mr. Weisselberg’s testimony — an acknowledgment from one of the Trump Organization’s top executives that he committed the crimes listed in the indictment — would undercut any effort by the company’s lawyers to contend that no crime was committed.
The indictment placed Mr. Weisselberg at the center of a conspiracy that prosecutors said allowed him to avoid paying taxes on leased Mercedes-Benzes, an apartment on Manhattan’s Upper West Side and private school tuition for his grandchildren.
Prosecutors have said other employees benefited from a similar arrangement, but no one else has been charged with a crime. Mr. Weisselberg’s testimony could help prosecutors prove their broader claims.
The prosecutors also essentially accused him of conspiring with the Trump Organization, which he will have to acknowledge at his plea hearing on Thursday and at the trial if he is called as a witness.
The New York Times reported on Monday that Mr. Weisselberg was nearing a deal with prosecutors, and CNN reported Wednesday that he had agreed to testify at the Trump Organization’s trial.
Mr. Weisselberg’s lawyers, Nicholas Gravante Jr. and Mary E. Mulligan, declined to comment, as did a spokeswoman for the district attorney’s office.
Mr. Weisselberg, 75, and the Trump Organization were indicted last year by the district attorney’s office and accused of orchestrating a scheme in which some executives were compensated with special off-the-books perks. Mr. Weisselberg, the prosecutors said, avoided paying taxes on $1.76 million of his income over the last 15 years.
The executive, who entered the Trump orbit as a junior bookkeeper for Mr. Trump’s father and climbed the ranks at the Trump Organization in the decades that followed, possessed a peerless knowledge of its business practices, and prosecutors had pressured him to cooperate with their wider investigation into the former president. But the district attorney who indicted him, Cyrus R. Vance Jr., was not able to sway him, and Mr. Vance’s successor, Alvin L. Bragg, has also been unsuccessful.
The deal, though, could represent a victory for Mr. Bragg as his prosecutors prepare for the highest-profile trial of his young tenure. Mr. Weisselberg is expected to receive a five-month jail term, and with time credited for good behavior, he is likely to serve about two-thirds of that.
The district attorney’s office has pushed for a steeper sentence, but Mr. Weisselberg’s lawyers and the judge overseeing the case agreed to five months, one of the people with knowledge of the matter said.
The investigation into Mr. Trump has largely focused on whether he fraudulently inflated the value of his real estate and other assets to obtain loans and other financial benefits. Over the last year, the prosecutors have examined Mr. Trump’s annual financial statements, which he provided to banks and insurance companies.
The New York state attorney general, Letitia James, is conducting a civil inquiry into the same allegations, and some of her lawyers are participating in the criminal inquiry. Earlier this month, her office deposed Mr. Trump, who declined to answer questions, invoking his Fifth Amendment right against self-incrimination, leaving the attorney general to decide whether to file a lawsuit against the former president.
Mr. Trump’s refusal to answer questions came on the heels of the F.B.I. search of his Florida home as part of an unrelated criminal investigation. He also faces scrutiny in Washington, D.C., and in Georgia for his efforts to overturn the results of the 2020 election.
In Manhattan, the investigation has long presented a significant threat to Mr. Trump. For years, Mr. Vance’s prosecutors sought his tax returns, a battle that reached the Supreme Court twice. Before the court ruled in the district attorney’s favor, Bloomberg News reported on some of the perks that Mr. Weisselberg had received, leading prosecutors to more closely scrutinize the chief financial officer’s conduct.
In the indictment, prosecutors said that Mr. Weisselberg avoided reporting his perks to tax authorities, and that they were not reflected in the Trump Organization’s general ledger, even though they were tracked on spreadsheets within the company.
Even after his indictment, Mr. Weisselberg refused to cooperate against Mr. Trump as the office continued its investigation into the former president. Before leaving office at the end of the year, Mr. Vance directed prosecutors to begin presenting evidence about the former president to a grand jury.
Mr. Bragg was sworn in on Jan. 1, and after weeks of meetings about the case, he developed concerns about proving that Mr. Trump had intended to commit a crime. The grand jury stopped hearing evidence, and in February, the two prosecutors leading the investigation resigned, leaving the investigation’s future uncertain.
Mr. Bragg has defended the inquiry and said that it has continued. But Mr. Weisselberg has refused to cooperate with the broader investigation, and that decision made a plea deal in his own case elusive, the people said.
Even without his cooperation against the Trump family, the negotiations gained steam in recent weeks, culminating in a meeting on Monday among Mr. Weisselberg’s lawyers, prosecutors and the State Supreme Court judge presiding over the case, Juan Merchan.
The judge won’t sentence Mr. Weisselberg until after the Trump Organization’s trial, providing prosecutors some leverage over him until the time that he may testify. If Justice Merchan finds that Mr. Weisselberg did not live up to the terms of the plea agreement, he can impose a stiffer sentence than the expected five months.
It is unclear where Mr. Weisselberg would serve his time, but defendants who receive sentences of less than a year are generally sent to one of the jails on Rikers Island. If Mr. Weisselberg were to be sent there, he would be likely to be held in protective custody. His lawyers could also ask that he be placed in a medical ward, or could seek home confinement.
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