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Court in Session, Waiting for Trump Org. Indictment Details; Trump Org. Attorneys Speak, Say Case Should Not Have Been Brought, It's a Political Prosecution. Aired 2:30-3p ET

Aired July 1, 2021 - 14:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[14:30:00]

ALISYN CAMEROTA, CNN HOST: But, Tristan, what is the main event?

TRISTAN SNELL, FORMER NEW YORK ASSISTANT ATTORNEY GENERAL: The main event really has to do with the misrepresentations that the Trump Org. allegedly made, both to tax authorities, undervaluing the value of the Trump properties, and then going to lenders and insurers with a much, much, much higher valuation in order to get larger lines of credit.

That is the main event here. That's the big thing that they're working on, actually getting an indictment for and then pushing forward with.

This effort, with regard to Weisselberg and other individuals with the Trump Organization, is all about building up to that larger case that they have been working on.

Why have they been spending all of this time on this, and they went to the Supreme Court to get access to the tax records and all of the back-ups to the tax records.

It is not the tax records. It is the backups to those records. All of the bank records, all of the internal e-mails, internal spread sheets.

I can boil it down. They basically manipulated the numbers to make it look like these properties were worth less to the tax authorities, worth more to the lenders.

And that was fraud, both on the lenders and on the tax authorities. It is potentially hundreds of millions of dollars-worth of fraud.

CAMEROTA: Elie, does that play into what you are talking about, that if they're pulling the thread today, that that's the main event that it leads to?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: That's clearly the goal, Alisyn. The question is, will they get there?

And it is clear to me that their strategy is to try to pressure and flip Allen Weisselberg.

Prosecutors have these conversations all the time. Jen Rodgers and I have had this conversation back at SDNY more times than I can count. You look at an organization like this and you assess and you say, who

is vulnerable, who might flip and who has the best information that we can use.

And then you single out that person sometimes, as we're seeing here. You bring whatever charge you can against them and you hope it is enough to flip them. That appears to be what is happening here.

The big question is, if Weisselberg flips or if he doesn't, are they going to be able to get to that main event Tristan is talking about? We don't know that yet.

CAMEROTA: Stand by.

We do have more details of what is going on inside the courtroom from our correspondent, Paula Reid. So let me bring her in.

Paula, what have you learned from what is happening inside?

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: It is really interesting hearing all of the details coming out of the courtroom.

The first thing that really struck me, Alisyn, is the fact Weisselberg entered the courtroom with his hands cuffed.

Just remember, at the center of these allegations, they're tax crimes, not a violent offense. They actually took the cuffs off as he sat down at the defense table.

And we're getting more information about the allegations. That's what we talked about earlier that we would be watching for.

Here, prosecutors are alleging a 15-year tax scheme. These charges include 15 felony counts, including a scheme to defraud, conspiracy, grand larceny, and falsifying tax records.

Now, they are alleging that Weisselberg avoided taxes on $1.7 million in income.

Earlier, when we were talking about really what is at the core of this case is, is this allegation that employees at the Trump Organization, including Mr. Weisselberg, received perks.

But, again, this wasn't free coffee. This wasn't just car service. This was allegedly free apartments, school tuition, free cars.

Those are the kinds of benefits that could add up to tens, hundreds, here over a million dollars. So that's going to be the crux of this case.

These are significant allegations. And it will be most interesting to see, when Mr. Weisselberg and his attorneys sit down later today or tomorrow and assess this evidence, if this is enough to change his mind on cooperating with prosecutors.

CAMEROTA: So, one more time, can you spell it out again? That what they spelled out in court was more than just perks. I mean, they went into what sounds like, I guess, bigger things unless it all falls under the umbrella of perks.

Just give us that litany again.

Sorry. Paula? Sorry, sorry, Paula. Can you hear me?

REID: Now I can hear you, Alisyn. Sorry.

CAMEROTA: So sorry.

Can you give me that litany again of what they just spelled out in court? Because it sounded like it was bigger than just perks. You were talking about grand larceny and you were talking about tax fraud.

Can you spell out the laundry list again?

REID: Exactly. This is quite extensive, Alisyn. There have been questions -- I heard you and the panel talking about will this be the big event.

These are significant charges. They're alleging a 15-year-long tax fraud scheme. So they're alleging that for 15 years, the Trump Organization and/or Mr. Weisselberg were trying to avoid paying taxes.

Specifically, when it comes to Mr. Weisselberg, they're alleging that he tried to avoid paying taxes on $1.7 million in income.

So they're alleging that he received some of these extra benefits, not his direct paycheck, but received income in other ways and didn't properly report it for tax purposes.

[14:35:01]

So when it comes to not paying on $1.7 million of income, that is a significant charge.

Again, what will be interesting to see is, if this evidence, now that it has been revealed, is enough to change his mind, if he will now be willing to cooperate with prosecutors against his former boss.

CAMEROTA: OK. Paula, thank you very much.

Let me bring in our analysts again. We are joined again by Laura, Elie, Abby, and Jen Rodgers.

Laura, tell me what you just heard there from Paula.

LAURA COATES, CNN SENIOR LEGAL ANALYST: Wow. When she said a 15-year scheme, that, in my mind, said, for every year that you fail to pay taxes, it represents a separate count.

Which means that you have -- I think it is a minimum, depending on the amount -- of about seven years per count, if I'm not mistaken, under New York law.

You add that up and you are talking about a very significant prospective sentence.

Of course, it is very rare that someone would get the maximum if convicted on all of those counts. But we're not talking about small potatoes here.

What is unsurprising is that this indictment did not simply rely on statements about fringe benefits. It was far more expansive, filing fraudulent documents, other aspects that Paula laid out for us.

But, again, it goes to the heart of, what was the nature of the position of Allen Weisselberg, what was he in a position to know, to do, who was he acting on behalf of?

Those are the kinds of questions that will now come up.

We know the prospective amount of jail time he is facing.

Now the question will be, look, are you going to be the only person to take the fall for conduct that inured to the benefit of more than one person, inured to potentially the company, and those who were employees as well?

That's a question for this particular now-named defendant, the only one we know of right now who is facing, what, 15 different counts times seven years.

You do the math. At the prospective, 105-plus years. We are nowhere near that.

But imagine what the weight of that must feel like to somebody who has never even been arrested, has had this very cushy job all this time, has believed that he had the ear of the former president of the United States, and his father before that.

We're talking about an extraordinary amount of charges and time facing this particular person.

CAMEROTA: Jen, I would like to get your take.

So as we were just spelling out with Laura, a 15-year tax scheme, including 15 felony counts, a scheme to defraud, conspiracy, grand larceny, falsifying business records. Prosecutors allege he evaded taxes on $1.7 million worth of income.

Is this what you were expecting? Is it bigger?

JENNIFER RODGERS, CNN LEGAL ANALYST: It is bigger than I was expecting. I was expecting it to be limited to the fringe income, fringe benefit scheme.

I will say, while Laura is exactly right, when you look at the worst- case scenario, the statutory maximum, it looks very high and Weisselberg will be looking at that number with wide eyes presumably as he talks it over with his lawyers.

But remember that you really only get hit for the amount of loss to the state. So $1.7 million in income on which you avoided taxes.

The New York state tax rate is around 8 percent. So you are not talking about $1.7 million of fraud. You are talking about 8 percent of that $1.7 million approximately.

So when they really think about the consequences, they'll be talking through not really the statutory maximum but more what he really will be facing. And that depends, in this case, on the actual tax loss amount.

CAMEROTA: OK. That's helpful.

Elie, your take when you hear all of this?

HONIG: The $1.7 figure jumped out at me. That's a big number. What we have to see is how they break it down year by year over the 15 years, because that's what will determine what maximum punishment Allen Weisselberg is looking at.

As Jen says, we have to know, is it the amount of fraud or the total amount of income? There's a big difference of that. That should become clear when we see the indictment.

CAMEROTA: But, I mean, Elie, is that your take -- are they sort of throwing the kitchen sink at this? Are these more different kinds of charges than you were expecting or is this what you expected?

HONIG: It sounds to me like they're charging essentially the tax fraud under various different laws, under various different statutes.

There are different ways you can charge it. You can charge it as tax fraud. You can charge it as a larceny. You can charge it as falsifying records. Meaning, falsifying your tax returns.

Prosecutors do try to do that sometimes. They try to charge the conduct using as many different statutes as they can to cover all of the bases.

That's what it sounds like to me pending the arrival of the actual indictment itself.

CAMEROTA: Laura, we have just been told that Allen Weisselberg, as expected, has pled not guilty. Obviously. we expected that.

So just take us inside. What is happening in the court right now?

COATES: Well, now that he's expectedly -- and we assumed he would plead not guilty to these charges -- there will be discussions about whether he will be released on what is called his own personal recognizance.

Meaning, that he is under an honor system of sorts to return to court for any future court dates, any future hearings.

[14:40:04]

And naturally, if there were to be a trial, he would appear for that as well.

They're going to look at the idea of his conditions of release, whether the court will allow him to return home.

And I would suspect given this is a nonviolent offense, which is normally a key determining factor in terms of whether someone poses a threat to the public's safety.

That's normally what rules the day for judges.

I would expect, based on his lack of a criminal record and the nature of these crimes, that he would be able to return home with some form of supervision or surveillance.

But this is a really -- as Elie said earlier, this gets very real. When you walk through the door in handcuffs to the court, it is not because it was your preference.

And the judge is now looking at him, as he would with any other person who has been charged by prosecutors, as somebody who certainly has a presumption of innocence, absolutely.

But also is now under -- within this justice system. And he will have to respond and conduct himself accordingly.

I bet, right now, they're talking about, what are the parameters for him to be released? What can't he do? Where will his documents, his electronic equipment go? Who will be able to view it? What liberty he will have pending trial.

CAMEROTA: We have a little bit more -- we have a few more details.

Allen Weisselberg and the Trump Organization and the Trump Payroll Office have all pled not guilty.

Here is -- these are live pictures. This means that Allen Weisselberg is leaving the courtroom -- or is this from earlier? He is leaving now. Allen Weisselberg is leaving the courtroom now.

Elie, he's not handcuffed this time, is he?

HONIG: Right. So he has clearly been released, as Laura Coates just said. We will have to figure out what the terms of that release are.

Has he been released on his own recognizance, which means we trust you to come back? Has there been a bail condition, some limitation? Will he be under house arrest, something like that?

But, yes, these proceedings are quick. You are advised of your rights, you plead not guilty, and then you walk out.

CAMEROTA: And he goes home?

HONIG: He will go home right now. The question is that he may be confined to his home. Sometimes when someone is released like this, the judge will say, you

can't leave your home or you can't leave the state or you need special permission or you have a curfew.

Those details I think we will get soon.

CAMEROTA: OK.

And, Jennifer, then what? What happens with the investigation? What happens with Allen Weisselberg's cooperation or lack thereof now?

RODGERS: The investigation will continue, certainly. I mean, Allen Weisselberg is now starting this litigation process, so he will have a status conference day.

You know, his case will proceed. But he and his lawyers will certainly be talking.

This was clearly this last-ditch effort by prosecutors to bring him into the fold, to make him a cooperator, and that's the decision that's facing them now.

CAMEROTA: And do you think, Jen, that something changes now?

I mean, what we had heard was that Allen Weisselberg had not been cooperating with investigators and with prosecutors. But I know that things can change after you are indicted.

In your experience, do things move faster now?

RODGERS: You know, it is really hard to say. I think in cases like this, in white-collar cases, the defendant and his lawyers are often meeting and speaking with prosecutors all along about what the charges are going to be.

They will have told him in advance what he is facing, so it won't be a surprise to him. It is not like he walked into court this morning and learned he was being charged with much more than he anticipated.

So if he changes his mind, it is really from the kind of thought process that Elie and Laura were talking about.

The kind of cold, hard reality of being put in handcuffs, of going to the court, looking at that judge, and thinking about whether you're really going to do this time or whether you're going to flip.

So it is kind of that visceral emotional reaction as opposed to learning new facts. But that can be an important, meaningful reaction for people.

I don't know. We will just have to see.

CAMEROTA: We're watching Allen Weisselberg walk out of court right now. We assume, with his attorneys there.

We also understand that the Trump Organization lawyers are there. It looks like he is getting into a Suburban of some kind and going to

drive away.

We have some new details we are just getting in, though, about what happened in the courtroom.

So prosecutors said that Weisselberg attempted to conceal his participation in the scheme with the knowledge of the company.

Quote, "Even now, there's been no attempt to impose discipline on members of the company," Manhattan prosecutor, Carey Dunne, said. "There's no clearer example of a company that should be held responsible."

Prosecutors asked for Weisselberg's passport to be taken, suggesting that he may be a flight risk, saying he has been and will remain CFO of this international company.

There's, quote, "Ample record of travel by private jet, ample means to support himself out of our jurisdiction."

Elie, your take on that?

HONIG: One of the things judges think about when letting someone out on bail, like Weisselberg, is, is he a flight risk, could he become a fugitive. It is standard to seize someone's passport, as happened here.

[14:45:07]

It is interesting that the judge found he is a person of means, he's a person that could take off.

As to the statement by the prosecutor, that's my question for prosecutors.

I mean, if they say it went beyond Allen Weisselberg, and other people at the organization didn't do anything to stop it and were sort of complicit in this, OK, then why are we only challenging or charging Allen Weisselberg at this stage?

I think that's the challenge that prosecutors face going forward, seeking real accountability within the Trump Organization and not just a paper indictment of the company itself.

CAMEROTA: Just to recap for everyone -- Tristan, I know you are joining us now and I want to get your take if this is what you expected.

We found out, in court, prosecutors described a 15-year tax scheme -- well, the charges include 15 felony counts, including a scheme to defraud, including conspiracy, grand larceny, and falsifying business records.

Prosecutors allege that Weisselberg evaded taxes on $1.7 million of income. Is this what you expected?

SNELL: This is more than I expected. It goes on for a longer period of time.

I think the key thing to look for here is -- and we got a little bit of color about it with some of the things that were said in court -- is the degree to which they went out of their way to falsify things and to mask it.

I think that's really key. Because it is one thing to say, hey, you messed up, you should have put all of this on your taxes, you didn't, you owe all of this money, you owe penalties, et cetera.

It is a different thing entirely to say, you purposefully, intentionally, knowingly, some combination of those things, went out of your way to mask this and that this was a systemic problem at the company. That's a bigger deal.

It also is the tip of the much larger iceberg to say, let's just sum this all up with what today means and what this means with all of the other parts of this investigation, that they're allegedly cooking the books and that they've been doing it for decades.

And that Weisselberg -- why is Weisselberg the one that's there and the other guys aren't?

Because he was the boss. He's the CFO. He's the one in charge of the books.

And then the boss's boss, is the fact that allegedly he was going into talk to Trump every single day, that they were talking constantly. And how much of this Trump know and when did he know it?

CAMEROTA: Yes, Tristan, pardon me.

SNELL: That's the part that's going to happen next as we try to dig this out.

CAMEROTA: Yes, let me interrupt you for a second.

One of the attorneys is speaking. We think this is for the Trump Organization.

ALAN FUTERFAS, ATTORNEY FOR THE TRUMP ORGANIZATION: -- complains, well, this case is setting that precedent. So we have looked at this so carefully.

These cases are always resolved in a civil context. The IRS has never made a case like this. We cannot find where the IRS has ever made a case like this.

And we're all aware, all of you, and all of us, are aware of the very significant financial crimes that have occurred by large financial institutions where this office did not take them on, did not prosecute them. Going back to 2008, the financial collapse of the United States, many of the firms that were involved in those events are located in Manhattan. We did not see this office go after those firms and drag them into court, those companies into court.

And we're talking about a trillion dollars in lost value to homeowners across the United States.

So just to -- those are my thoughts.

And I think that it is an improper precedent. I think the office knows this. I'm not saying anything to you all that they are not aware of.

But I believe the political forces driving today's events are just that. It is politically driven. Notwithstanding the statements by my colleague at the D.A.'s office in court today.

(CROSSTALK)

UNIDENTIFIED REPORTER: -- $1.7 million. I know he's not your client, but that's a lot of money. What would Mr. Trump have to say about that?

FUTERFAS: The allegations in the indictment are just that. They are allegations. They have to be proven.

This is -- these kinds of cases typically are resolved in the civil context. Why? Because the law on compensation, on fringe benefits is murky. It is difficult. It is complex. You can have experts disagree.

So these charges are going to be vigorously contested. And they're going to be vigorously contested by people who are experts in the field and know this law very, very well.

UNIDENTIFIED REPORTER: How concerned is Mr. Trump about the personal -- (INAUDIBLE). As they say it could be the beginning of a more lengthy and more thorough prosecution?

FUTERFAS: The district attorney can say and announce whatever they would like to say and announce. We have no concerns going forward.

[14:50:02]

That's all I can say on that matter.

UNIDENTIFIED REPORTER: (INAUDIBLE QUESTION)

FUTERFAS: The indictment alleges that that amount of money was from 2005 into 2016 or 2017.

But again, the question is what is it about? It's about apartments. It's a something a corporate apartment. It is something -- a properly -- an expense of the company.

And these were complex questions. Never charged in a criminal case. And they shouldn't have been here, quite frankly.

UNIDENTIFIED REPORTER: (INAUDIBLE QUESTION)

FUTERFAS: All civil cases -- I've been a lawyer a long time. My wonderful colleague, Patina Shines (ph) -- she's been a lawyer a long time.

Also, people get into a room, they talk about it. Often, they resolve things.

What can I say? Your own human experience tells you the answer to those questions.

UNIDENTIFIED REPORTER: (INAUDIBLE) -- settlement would require an admission of wrongdoing?

FUTERFAS: We are -- we're -- way before any kind of -- all I can tell you is, all of our common experience would tell you that civil cases, people usually get in a room, they figure out what the issues are, and they resolve them. That's what happens.

UNIDENTIFIED REPORTER: (INAUDIBLE) -- this could be very damaging to the Trump Organization itself?

FUTERFAS: We are -- the company is very, very optimistic that -- and we're certainly hopeful that there will not be significant effects.

I do remind you all that there are large financial institutions in New York City, very well-known financial institutions, that were the subject of criminal prosecutions and that are regulated entities.

We're talking banks, we're talking large financial institutions. And they've all survived very, very well.

What I would tell you all, and something that isn't reported, is that what is the company? The company is about 3,500 employees worldwide. Many of those are in the United States at these properties and hotels and golf clubs.

I visited some of those. And the people that are employed are waiters and they are bellmen and busboys and they clean the rooms and they fix the meals and they are maintenance people and they take care of the grounds.

And they are people from all walks of life, of every country on the planet. And they are good, hard working people.

So those are the people that really are behind this company. You all should know that.

UNIDENTIFIED REPORTER: (INAUDIBLE) -- former President Trump?

FUTERFAS: I would answer that by saying that, certainly, given the nature and the unprecedented nature of these charges, that certainly that's the reason they were brought, OK? If the name of the company was something else, I don't think these

charges would have been brought. In fact, I am fairly certain they would not have been brought if the name was a different name.

UNIDENTIFIED REPORTER: (INAUDIBLE QUESTION)

FUTERFAS: No. The answer is no. I'm going to speak to what we are talking about today.

I'm finished. I appreciate you all, but that's what I have to take about this afternoon.

Thank you.

(CROSSTALK)

FUTERFAS: Alan Futerfas, F-U-T-E-R-F-A-S.

UNIDENTIFIED REPORTER: Thank you.

FUTERFAS: Thank you.

SUSAN NECHELES, ATTORNEY FOR THE TRUMP ORGANIZATION: I just have a few comments to make on behalf of the company as well.

Susan Necheles, attorney for the company as well.

I think all Americans should be concerned about what they see in this case today. This case is truly unprecedented.

The attorney general's office and the district attorney's office brought a joint prosecution here because they dislike Donald Trump politically.

They subpoenaed millions of documents from him personally and pressured witnesses so that those witnesses -- trying to make those witnesses tell them things that Donald Trump -- that they wanted to hear, that Donald Trump had done things criminally, which the witnesses did not do because they could not do.

Although, Carey Dunne, in court, said this was not a political prosecution, I think you can all see what has happened in the press, what you've seen over the last year, and the comment that the attorney general, Letitia James, has repeatedly made.

[14:55:02]

She campaigned on a promise that she would get Donald Trump. She repeatedly said she would use all areas of the law to get Donald Trump. And this is a joint prosecution.

While she was attorney general, and while President Trump was in office, she sued him 70 times using New York taxpayer money. She called him an illegitimate president repeatedly.

So this is a person who, now with the D.A.'s office, have teamed up together to bring this unprecedented prosecution.

The D.A.'s office may say it's not unprecedented, but they cannot point to any case, any case where a corporation has been prosecuted based on a few individuals in the corporation, who allegedly, on their personal tax return, made a mistake or did not pick up fringe benefits on their personal tax return.

There is no such case that we have been able to find. And we do not believe that there's any such case that they have been able to find.

You cannot say, like the D.A.'s office said in court, oh, we brought the case because he didn't cooperate with us.

That's not how it works. You bring the case on principles of corporation -- of liability and when a corporation has done massive wrongdoing.

That's what the D.A.'s office guidelines for corporate liability said and they disregarded those guidelines to bring a case against a Trump company. Never happened before.

We will win this case. But this case should have never been brought.

It is a political prosecution. Political prosecutions where people are targeted criminally because the prosecutors disagree with their political beliefs happen in corrupt countries.

It does not happen in America. It's un-American.

It should not happen here in New York City, the greatest city in the greatest democracy in the world. Should not have occurred.

And it is a sad day in New York that this occurred.

Thank you.

(CROSSTALK)

NECHELES: I'm not answering any questions today.

Thank you very much.

CAMEROTA: OK, we've been listening to the attorneys for the Trump Organization make their case of how they think this never should have been brought in criminal court. They said, at most, this is in a civil context.

Let's get straight to CNN reporter, Kara Scannell, who was inside the courtroom.

So tell us what you learned in there.

KARA SCANNELL, CNN REPORTER: Alisyn, this is one of the most-dramatic court appearances I've been in, in a long time.

Allen Weisselberg was escorted into the courtroom with his hands cuffed behind him and was uncuffed when he sat down at the defense table.

He was largely quiet, as you expect in a hearing like this, answering only when the judge asked what he pleaded. And he said he pled not guilty.

We did also hear a little bit more about the scheme, which I'm sure you've been covering while I was inside.

But a 15-year tax scheme with 15 felony counts brought against the defendants, a scheme to defraud, grand larceny, criminal tax fraud, falsifying business records.

One of the allegations is that Allen Weisselberg did not pay taxes on $1.7 million beginning in 2005.

Now, according to prosecutors, one way he did not pay the taxes is he concealed that he was a New York City resident.

Another allegation is that he lived rent free in an apartment provided in New York City by the Trump Organization.

They said that the scheme also involved secret pay raises.

And that it was -- one of the prosecutors spoke in court and he called it a "sweeping and audacious illegal payment scheme."

Quite a contrast to what you're hearing and you just heard from lawyers for Weisselberg and for the Trump Organization where they are making this into a political case.

One of the attorneys, the general counsel for the district attorney's office, Carey Dunn, he said in court that this is not about politics. Politics has no role in the grand jury. And it played no role here.

But they also said that this was a scheme that Weisselberg was involved with that was known by the company at the top of the company.

One of the big questions people have is, why was the company indicted in this?

They addressed that by saying the company did not cooperate. It took them to court for nearly two years, fighting with the Supreme Court for the tax returns.

And it did not allow any employees to cooperate or testify and be interviewed except when they were called before the grand jury.

So we're getting a sense here that this is going to be a big fight.

The Trump Organization's lawyer saying this was about politics, this should have been handled civilly.

[14:59:52]

And the D.A. saying that this was a 15-year illegal scheme to defraud. And for Weisselberg himself, now, $1.7 million, they're saying, he didn't pay taxes on -- Alisyn?

CAMEROTA: Kara Scannell, thank you very much for all of that breaking news and for guiding us through it.

Let's discuss all of this with Donald Trump's former personal attorney, Michael Cohen, who has been listening in to all of these developments.