Tax fraud charges: The pressure's on Allen Weisselberg to flip on Donald Trump

What if Allen Weisselberg doesn't flip?

That’s a question prosecutors in Manhattan likely have already asked themselves before filing Thursday's charges against the Trump Organization and its chief financial officer alleging 15 counts of tax fraud.

“Flipping” defendants means persuading them to switch from the defense to the prosecution team by cooperating against their criminal associates. In exchange, prosecutors promise cooperators some benefit, such as an agreement not to charge them, to charge them with a lesser crime than the full scope of their misconduct, or to recommend a reduction in their sentence.

Flipping defendants is a common strategy in criminal prosecution. That’s because a criminal’s associates are the people best positioned to know details about the facts of his crimes. Even a case based largely on documents, such as a tax case, often requires a narrator to help connect the dots. An insider who cooperates can help put the pieces together in a way that is understandable to a jury.

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Typically, prosecutors use lower-level members of a criminal organization to cooperate against “bigger fish” whose conduct is more egregious. At the Trump Organization, there are few people on the organizational chart who are above Weisselberg. They include Eric Trump, Donald Trump, Jr. and Trump himself.

A cooperator can be particularly valuable in a white-collar prosecution. In those cases, often the issue isn’t what happened, but whether the conduct was done for an improper purpose. An innocent mistake on a tax return may subject the taxpayer to civil fines, penalties or back taxes, but not criminal charges. A deliberate effort to evade taxes, on the other hand, may expose him to prison time. A cooperator can testify about the substance of conversations with co-conspirators to help the prosecution establish whether acts to improperly reduce the tax bill were done willfully.

Naming Weisselberg as a defendant signals that prosecutors have been unsuccessful in persuading him to flip – so far. Sometimes, a subject who declines to cooperate before charges are filed changes his mind once he sees his name on an indictment. Appearing in court where a judge sets conditions of bond that restrict one’s liberty can serve as a wake-up call.

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For example, the Trump campaign’s deputy chairman, Rick Gates, initially refused to cooperate and was named as a co-defendant along with Paul Manafort in a federal indictment in 2017, but flipped shortly thereafter and testified at Manafort’s trial in exchange for a recommendation for a reduction in his sentence. He ended up serving a sentence of 45 days in prison for his role in various fraud and tax crimes. Manafort, on the other hand, was convicted, based in part on Gates’ testimony, and was sentenced to more than seven years in prison before he was pardoned by then-President Donald Trump.

Weisselberg makes for an ideal cooperator. He has served in the Trump Organization since 1973, back in the days when it was run by Fred Trump, the father of the former president. Weisselberg himself is charged with receiving some of the untaxed benefits, and so he likely knows who else at the company was involved in the fraud. His role as chief financial officer gives him access to information about decisions regarding tax planning and how money is acquired and spent. This means that not only can he testify about tax crimes, he also can testify about other potential financial crimes that are under investigation.

Manhattan District Attorney Cyrus Vance has stated in court filings that his office is investigating the Trump Organization for bank and insurance fraud. In fact, Trump’s former lawyer Michael Cohen told Congress that Trump had a practice of manipulating the value of assets to his advantage, deflating their value for tax purposes and inflating their value for purpose of obtaining loans. If so, those charges could expose additional Trump Organization executives to prosecution and to more serious penalties than the tax charges carry.

More inducements possible

In addition, prosecutors would likely be willing to sacrifice the maximum sentence they could obtain against Weisselberg if he could provide testimony to prosecute higher-level Trump Organization executives whose conduct is more serious. For example, a high-level corporate officer who was directing Weisselberg or others to violate the law by making false representations for financial gain would be considered a higher-value target.

But what if Weisselberg doesn’t flip? Prosecutors likely still have some additional inducements to offer him, such as promising to decline to file potential charges against his family members. The indictment makes reference to benefits to relatives of Weisselberg. Reports suggest Weisselberg’s son Barry, while he was an employee of the Trump Organization, lived rent-free in a New York apartment, a benefit for which he did not pay income taxes.

Prosecutors will sometimes offer what is known as “third-party cooperation,” that is, one defendant cooperates and someone else receives the benefit. Allen Weisselberg could agree to cooperate in exchange for a promise from prosecutors to decline to charge Barry Weisselberg. Weisselberg may be willing to throw himself under the bus for Trump, but is he willing to throw his son under, too?

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Even if Weisselberg never flips, prosecutors could later compel his testimony. His legal jeopardy will expire when he is either convicted or acquitted. At that point, he has no right against self-incrimination because he can no longer be incriminated for matters that have already been tried. That means he could not assert his Fifth Amendment privilege to avoid testifying.

Even if prosecutors wanted to question him about subjects beyond the scope of his current criminal case for which he might still retain some exposure, and, accordingly, Fifth Amendment protection, they could immunize him. Under New York law, compelling a witness to testify requires transactional immunity, meaning that Weisselberg could not be charged with any crimes he discussed in the process of providing information about the crimes of others.

Whichever scenario plays out, following Thursday’s charges, prosecutors are one step closer to compelling Weisselberg’s testimony and working their way up the chain to the top of the Trump Organization. It is a short chain that leads right to the former president.

Barbara McQuade, a former U.S. attorney for the Eastern District of Michigan, is a professor at the University of Michigan Law School, an NBC and MSNBC legal analyst, and a member of USA TODAY's Board of Contributors. Follow her on Twitter: @BarbMcQuade

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This article originally appeared on USA TODAY: Trump Organization fraud charges put pressure on Weisselberg to flip