The Trump org also reported executive employee compensation as non-employee compensation --
another big no-no.
(Isn't this something Ivanka was implicated in in the past? Wasn't she compensated as a consultant though she was really an employee?)
‘The Misreporting of Employee Compensation as Non-Employee Compensation
15. Asa further part ofthe schemetodefraud, the defendants misreported portionsofthe
employee compensation paid to certain Trump Organization executives,including but not limited to
Weisselberg. Specifically, it was the practice of the Trump Organization to compensate certain
executives by paying them a yearly salary and a discretionary end-of-year bonus. The salary and, in
most instances, a portion of the executives” end-of-year bonuses were paid to the executives by
Trump Payroll Corp. and reported to federal, state, and local tax authorities as employee
compensation on W-2 forms. However, for Weisselberg and otherexecutives, a substantial portion
of their end-of-year bonuses was paid in the form of checks drawn on other Trump Organization
entities, including Wollman Rink Operations LLC, Trump Intemational GolfClub LLC, the Mar-aLago Club, Trump Productions LLC, VH Property Corp., Trump Las Vegas Development LLC,
Tramp CPS LLC, and other entities.
16. The end-of-year bonus checks drawn on entitiesotherthan Trump Payroll Corp. were
routinely reported to tax authorities as non-employee compensation, and set forth on United States
Intemal Revenue Service 1099 Forms, which are used to report non-employee compensation. This
n
practice, as the defendants knew, was improper. The end-of-year bonus compensation received by
the executives was employee compensation and should have been reported as such. By reporting
portions of employees’ bonus payments as non-employee compensation, the defendants made it
possible for those employees to report the payments as self-employment income.
17. Additionally, by reasonofhaving reported substantial non-employee compensation,
Weisselberg was able to make annual contributions to aKeogh plan, which is a tax-deferred pension
plan that s available to self-employed individuals for retirement purposes. Weisselberg was nota
self-employed individual. But, because he purportedly received substantial non-employee
compensation from the entities such as the Mar-a-Lago Club and Wollman Rink Operations LLC, as
set forth above, he falsely reported the receipt of self-employment income and thereby falsely
claimed that he was entitled to an annual exclusion from his incomeof amounts contributed to his
Keogh plan. The amounts so contributed for the tax years 2012 through 2016 exceeded
approximately $215,000, and over the course of the scheme to defraud, Weissclberg was able to
build up a Keogh plan worth many hundreds of thousands of dollars. Weisselberg knew that the
exclusions from his taxable income ofhis contributions to his Keogh plan were improper. By falsely
reporting that executives including Weisselberg had received non-employee compensation, the
defendants enabled Weisselberg to benefit from Keogh contributions that he was not lawfully
‘permitted to make, and thereby to defraud federal, state, and local tax authorities.
