Business Insider
New York prosecutors are treating the Trump Organization like it's the mob
jshamsian@insider.com (Jacob Shamsian)
NY prosecutors examining the Trump Organization seem to be treating it like it's run by mobsters.
Similar to mob organizations, the Trump Org is run by family members who prosecutors want to "flip."
Prosecutors could seek racketeering charges, used in both organized crime and business contexts.
When Donald Trump built Trump Tower in New York, he made an unusual decision.
He wanted to build with concrete, when in the 1970s and 1980s large steel beams built the skeletons of most skyscrapers. To supply the massive amount of concrete needed, he paid inflated prices to a company run by Anthony "Fat Tony" Salerno and Paul Castellano, the respective heads of the Genovese and Gambino crime families. Trump and Salerno shared a personal lawyer, Roy Cohn, at the time.
Salerno and Castellano were later put behind bars for racketeering. Now Trump is locked in prosecutors' sights, and the criminal investigations into his and the Trump Organization's finances sure look a lot like mob investigations.
Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James recently announced they'd joined forces in their criminal investigations. Both offices appear to be looking at whether the Trump Organization kept two sets of books - one to receive favorable loan and insurance rates and another to pay as little in taxes as possible.
Vance's office has made the most public progress, securing a Supreme Court victory to subpoena the Trump Organization's tax documents and pushing hard to "flip" Allen Weisselberg, the Trump Organization's chief financial officer and the Trump family's bookkeeper.
Vance also hired a widely respected attorney who specializes in white-collar and organized crime to join his team earlier this year. Legal experts expect his investigators are looking into whether the Trump Organization has run afoul of Racketeer-Influenced and Corrupt Organization, or RICO, laws, statutes that prosecutors have used against both mob organizations and businesses with a pattern of criminal behavior.
The Trump Organization 'family'
Like many mob organizations, the Trump Organization is a family business.
The former president inherited it from his father, Fred Trump. After he was elected to the presidency in 2016, he left it in the hands of his two eldest sons, Eric and Donald Jr. His eldest daughter, Ivanka, left her executive position at the company to join his White House staff.
Though the Trump Organization reportedly has about 20,000 employees, it's run by a tight inner circle. And members of that inner circle who don't have the last name Trump typically have been with the company for decades.
Trump hired Matthew Calamari, the company's chief operating officer, as a bodyguard in 1981 after seeing him tackle someone at the tennis US Open. Calamari's son also now has a prominent security role in the company. And Jason Greenblatt worked on legal issues for the Trump Organization for two decades before joining his presidential administration. Chief Legal Officer Alan Garten has worked for the company since 2006. Ron Lieberman, the executive in charge of management and development, has stuck around since 2007.
Michael Cohen - who worked for Trump for more than a decade as an executive and personal lawyer before testifying against him to Congress and federal prosecutors - has likened the Trump Organization to a "cult": Everyone listens to the leader, people don't talk about what it's really like to the outside world, and no one ever leaves.
"If he said something - I hate to use the example - it's like Rameses from 'The Ten Commandments': So it has been said, so it shall be done," Cohen said in 2019 testimony to the House of Representatives. "That is how the Trump Organization works."
Prosecutors examining the Trump Organization's finances appear to already have the documents they need. Earlier this year, Vance's office won a series of court battles that gave them access to reams of pages of the Trump Organization's tax records going back decades. They include not only Trump's tax returns but also the communications, exchanges, and evaluations that went into determining how Trump's assets were valued for tax and loan purposes.
But those prosecutors still appear to believe information from "the family" will make or break their cases.
Prosecutors want 'family' members to flip
Prosecutors looking into Trump's financial affairs have already gleaned important information from "family" members.
The New York Attorney General's office forced Eric Trump to sit for a deposition for its investigation. Cohen told Insider he's testified for Vance's prosecutors more than a dozen times.
The most valuable potential cooperator might be Allen Weisselberg, who was initially hired by Fred Trump to manage the family's finances in the 1970s and has risen through the ranks of the company since. The bookkeeper knows more about the organization's and family's finances than anyone else. Members of Vance's office reportedly want him to help guide them through the financial documents in their possession.
In addition to examining Weisselberg's own conduct, prosecutors appear to be deploying the same strategy to secure his cooperation that they typically use to seek the cooperation of mob members: putting the screws to his family.
Prosecutors have looked into his eldest son, Barry Weisselberg, who is also a Trump Organization employee (he runs the cash-only Wollman Rink in Manhattan's Central Park). Barry Weisselberg might have broken tax laws, himself: For years, he paid virtually nothing in rent for his apartment - which his ex-wife, Jennifer Weisselberg, said was a wedding gift from Donald and Melania Trump - while apparently miscategorizing it on tax filings.
Jeff Robbins, a former federal prosecutor overseeing money-laundering investigations, told Insider that putting pressure on Barry Weisselberg makes it more likely that Allen Weisselberg will work with Vance's team.
"The likelihood of him cooperating goes up significantly if, in fact, the prosecutors have criminal charges that can reasonably be brought against his sons, for the simple human reason that: What father would not do something unpleasant in order to help his sons out of a legal jam?" Robbins said.
Prosecutors already have the cooperation of Jennifer Weisselberg, whose marriage gave her a window into how intertwined the Trump family business is with its employees' lives. Rather than giving employees regular raises, Trump and Allen Weisselberg would offer perks like paying for apartments or childrens' tuition, she previously told Insider. Vance's office has subpoenaed the private school her children attend, which could allow the office to discover whether the arrangement broke tax laws.
The unorthodox compensation packages were a way the Trump Organization sought to avoid paying certain taxes, Jennifer Weisselberg said. The perks also had another purpose: Trump kept his grip on his top employees by controlling important parts of their lives.
"They want you to do crimes and not talk about it and don't leave," Jennifer Weisselberg said, adding: "It's so controlling ... because if you want to leave and make the same money - you live there. If you want to leave, where are you going to live?"
A fixation on loyalty
The then-special counsel Robert Mueller, apparently noticing the similarities between Trump and mob bosses, hired Andrew Weissmann as his second in command during his investigation into Russian interference in the 2016 election. An experienced mob prosecutor himself, Weissman was renowned for his skill in "flipping" witnesses.
Trump's former campaign chairman, Paul Manafort, held steadily loyal to Trump as Weissman investigated him. Trump rewarded Manafort's loyalty in the waning days of his presidency by granting him a "full and unconditional pardon" for eight counts of tax and bank fraud - although experts say the pardon was poorly worded and could leave Manafort on the hook for other charges.
The former president has railed against the idea of those with charges against them cooperating with prosecutors.
"I've seen it many times. I've had many friends involved with this stuff. It's called 'flipping,' and it almost ought to be illegal," he said in a 2018 interview with Fox News. "You get 10 years in jail, but if you say bad things about something ... now you go from 10 years to, 'They're a national hero.'"
Allen Weisselberg has shown the Trump family more than 40 years of loyalty. Will he cave now? Jennifer Weisselberg told CNN she thinks her former father-in-law will flip, given the overwhelming pressure on his family.
Prosecutors also might seek cooperation from Trump Organization employees who, strictly speaking, were not members of the "family."
Legal experts told Insider that the New York attorney general's recent, unusual announcement that she's conducting a criminal investigation might have been meant to shake loose more marginal figures who have valuable information to share.
"The announcement is meant to do a couple of things, the most important of which is just to continue to shake people up," Randy Zelin, a professor at Cornell Law School and white-collar criminal-defense attorney at Wilk Auslander, told Insider. "Anyone who's in Trump's orbit hearing that announcement is probably, aside from the sphincter tightening, they're immediately on the phone with their lawyer."
Mobs and corporations are organized similarly
Having a hierarchy of employees, a division of responsibilities, a reporting system, and complicated paperwork is just how mobs work nowadays, according to Zelin.
"I don't believe that you investigate a business like organized crime. I think organized-crime investigations are investigated like a business," Zelin said. "I always disagree with people who characterize going after a company like going after the Gambino crime family. It's really the other way around: The Gambino crime family became an organization."
The tools prosecutors use to pursue white-collar criminals also resemble the investigative tactics mob movies tend to play up, like pushing cooperating witnesses - the people who "flip" - into using wires.
"White-collar investigations have gotten far more sophisticated in the last several years," Duncan Levin, Jennifer Weisselberg's lawyer and a former official in Vance's office, told Insider. "Wiretaps used to be reserved for organized-crime investigations. But now we see them as a fairly routine part of more sophisticated white-collar cases."
Mark Pomerantz's career reflects that shift. The lawyer, who Vance hired earlier this year, became renowned for his expertise on white-collar crime after making his name prosecuting John Gotti's son. He's on leave from the elite white-collar criminal-defense firm Paul, Weiss while working on the Trump investigation.
Jennifer Weisselberg told Insider that Pomerantz hired a forensic accountant "who worked on many cases with mob families" to pore over documents she obtained in her divorce.
Prosecutors could seek charges under New York's RICO laws, as Insider's Tyler Sonnemaker previously reported.
The laws - frequently applied to both mob organizations and corporations - are designed to take down people engaged in a pattern of criminal behavior through some sort of "enterprise." Prosecutors could end up charging Trump, his executives, the Trump Organization itself, or some combination of those options.
"The RICO statute is brought all the time in cases which do not involve physical violence but which involve financial criminality," Robbins, now the cochair of the congressional-investigations practice at Saul Ewing Arnstein & Lehr, said. "It doesn't surprise me in the slightest if prosecutors are looking at whether there's a basis to charge the organization with racketeering."
Racketeering charges brought down Salerno and Castellano, the mobsters Trump bought concrete from decades ago. In a strange twist of fate, the top prosecutor who secured their conviction was Rudy Giuliani, who in recent years has served as Trump's personal lawyer and now faces his own legal troubles.
Trump's links to organized crime in his real-estate career extended beyond building Trump Tower. When he built casinos in Atlantic City, New Jersey, in the 1980s, he leased properties from two mob-linked figures, according to a Wall Street Journal investigation.
"They are not bad people from what I see," Trump said in 1982.
In 2016, Trump had a different approach to mobsters. He said that organized crime led only to trouble.
"When you have those relationships, in the end, you lose," he told The Wall Street Journal. "You can solve some problems short term, but long term, you've got a disaster."
LOCK HIM UP!
LOCK HIM UP! LOCK HIM UP!
LOCK HIM UP! LOCK HIM UP! LOCK HIM UP!
