Sophisticated Theft

The recent indictment of the CFO of Trump’s business empire has offered us a window into the differences in dishonest behavior between members of different social classes–and the extent to which anti-social behavior by “others” is viewed more negatively.

As a law professor who was a former U.S. Attorney opined, in the wake of the indictment of Allen Weisselberg,

As I learned during my career as a federal prosecutor, this is the way rich people steal money. The means are more sophisticated than sticking up someone with a gun on a street corner, but purpose is the same, which is why one of the charges is grand larceny— stealing property that doesn’t belong to you.

The charges leveled thus far–the investigation is ongoing, and more are likely–are serious. No one brandished a weapon, but according to the indictment, the company under Weisselberg’s and Trump’s direction engaged in 15 types of fraud over a period of years. Those included a number of schemes to evade income taxes, mostly by finding ways to compensate employees “off the books.”  The organization provided employees with cars, apartments, private school tuition, home improvements and bonuses– without , however, reporting these perks as the taxable income they legally were. That allowed the organization to avoid payroll taxes and allowed the employees thus compensated to significantly reduce both their taxable income and  the amount of taxes they paid.

This wasn’t penny-ante stuff; the indictment accuses Weisselberg alone of concealing approximately $1.7 million of his own compensation from tax authorities.

If this indictment was merely more evidence of Donald Trump’s disdain for the law, it would be worth at most a shake of the head and a comment to the effect that it didn’t come as a surprise. Unfortunately, however, fraud of this sort is apparently widespread among wealthy and near-wealthy individuals who share Trump’s stated belief that “smart” people don’t pay a lot in taxes.

The reactions to the indictments by Trump’s defenders have been telling. Defense lawyers characterized the criminal charges as “inappropriate,” and a number of rank-and-file, “law and order” Republicans shrugged them off as business as usual. Evidently, they consider the theft of millions of dollars accomplished without weaponry less serious than a holdup at gunpoint on the street (netting, perhaps, a couple of hundred dollars and a watch).

Of course, we “little people” have to make up the amounts lost by reason of this tax cheating through our own taxes–but what I find even more troubling is the lack of indignation and condemnation of this clearly fraudulent and criminal behavior. That indulgence undermines both the legitimacy of government and the rule of law.

We sometimes forget the extent to which our legal and economic systems require the voluntary compliance of the vast majority of Americans. To use an obvious example, most of us who drive stop at red lights and obey (most) other rules of the road. We couldn’t hire enough police officers to ensure safe roads if we couldn’t rely on the willingness of large majorities to obey traffic rules.

For that matter, America’s entire system of commerce relies upon the willingness of most sellers to deliver goods as promised, and the willingness of most buyers to pay for those goods in a timely manner without the need to send for the sheriff.

Our tax system similarly depends upon the voluntary compliance of millions of Americans who dutifully file the required paperwork and remit the appropriate payments. When that culture of obedience is allowed to erode–when the well-to-do can publicly wink at each others’ fraudulent evasions–that erosion inevitably breeds resentment among the law-abiding, and excuses additional noncompliance, not just with the tax laws, but within daily commerce.

The so-called “Captains of Industry” who consider themselves too smart to pay their taxes are also the scofflaws most likely to stiff the people with whom they do business. The Trump Organization is a prime example, but certainly not the only one.

Just because a certain type of theft is more sophisticated doesn’t make it less reprehensible. Stealing from the government is no less dishonest than stealing from individuals–and in fact, it is stealing from the individuals who must make up the difference.

It’s evidence of moral bankruptcy, not “smarts.”


  1. In this setting we see the Republicans adamantly refusing to properly fund the IRS. They KNOW their donors are tax cheats and they are doing all they can to defend them by defunding the IRS. Enforcement at the IRS is at record low levels. This is what the Republicans have delivered.

  2. “Indiana Public Retirement System (INPRS) is a U.S.-based pension fund responsible for the pension assets for public employees in the state of Indiana. INPRS is among the largest 100 pension funds in the United States, with $48.910 billion in actuarial accrued liabilities and $37.729 billion in actuarial assets as of June 30, 2017. The fund administers and manages several pension funds in the State of Indiana, the two largest of which are the Indiana State Teachers’ Retirement Fund and the Indiana Public Employees’ Retirement Fund. The others are the 1977 Police Officers’ and Firefighters’ Retirement Fund; the Judges’ Retirement System; the Excise, Gaming, and Conservation Officers’ Retirement Fund; the Prosecuting Attorneys’ Retirement Fund; the Legislators’ Defined Benefit Fund; and the Legislators’ Defined Contribution Fund. Each of the current funds remains separate but administered by the nine-member board of trustees of INPRS.”

    “Just because a certain type of theft is more sophisticated doesn’t make it less reprehensible.”

    And the government stealing from the people who put their life’s blood into working within local systems is no less reprehensible. The Indiana Republican Senate voted to end the state’s Public Employee Retirement Fund “13th Check” which we have received in lieu of a COLA since 2009. Replacing these checks (mine WAS $275.00 annually for service from 1972 to 1994) with a 1% COLA beginning January 1, 2022 is blatant theft of retirement benefits from public employees, teachers, judges, police officers, firefighters, Excise, Gaming & Conservation Officers, prosecutors and legislators throughout the state of Indiana. The Republican Indiana State Senate is beyond the reach of any law; where do we go for protection from this “Sophisticated Theft”?

  3. I like the analogy to traffic laws. I have often thought the same thing, that so much of our day-to-day lives rely on faith that others will comply with the rules and laws the govern our behavior. It is only when some person violates the norms that they are noticed, much like government itself. When it functions properly it is hardly noticeable, but when it goes off the rails it is obvious.

    I would like to hear about the efforts to go after the “dark money” that is secreted out of the country to off-shore accounts in the Cayman Islands and other places. From what I hear it is a substantial amount, and could go a long way to paying off our national debt, or paying for the infrastructure bill. It seems like there is not much will to go after that money, which reminds me of the saying from the television show “The Wire”, “if you go follow the drugs you get a drug dealer, but if you follow the money you never know where it will lead”.

  4. As the first two posters noticed, this comment is the giveaway from Sheila, “Republicans shrugged them off as business as usual.”

    Despite what Antonin Scalia said, our public officials, are all bribed. They’re on the take. They’re owned.

    If you want to see sophisticated theft, dedicate a week to the Fed, the Central Bank. You will understand the term, “we can’t afford it” is truly bullshite.

    Those in our Kleptocracy who clamor about Joe Biden not having the authority to forgive student loans while our Fed underwrites Repos for Wall Street (Pelosi) are thieves/actors. These Fed actors gave Wall Street $29 trillion to clean up their mess.

    Meanwhile, they haggle over fixing the roads and how much corporations should pay in taxes.

    We are dupes.

  5. Agreed, theft is theft. The Former Guy has been cheating since he learned to walk, learning how to shyst from his crooked, racist father. Lying, cheating and stealing is business as usual for T and his ilk, yet he might be paying some actual consequences at long last. The more I learn about narcissism and sociopathy, the more Iʻm convinced T fits the bill. He is a supremely selfish human.

  6. Accountants used to caution the little people that home office deductions are likely to trigger an audit. Then why shouldn’t every corporate aircraft be audited? Contort a trip to your second or third home into a business trip and write it off. If that’s too audacious, “reimburse” your corporation $179.99 for the coach fare equivalent of a $15,000 private flight. Send the plane back for the poodle.

  7. What Patmcc said!

    No, we are not dupes, Todd. Who got those “money is speech” and “corporations are people” laws passed? Republicans. The voters have been lulled into their state of somnolence for decades (Reagan: “Government is the problem”) so they stopped reading and voting. For decades, even our full elections have seen barely over 50% of registered voters vote. In off-year elections, barely 30% vote. The thieving bastards like Trump and Weisselberg know who to pay off and how much they’ll drop for.

    Thugs are still thugs. Crooks are still crooks. Liars, cheats, greedy bastards are always the same. It doesn’t matter whether they were raggedy-assed clothes or silk suits. In modern societies, it’s always been the 25% – 30% who constitute the criminal class. But it’s easier to catch the raggedy-asses than the silk suits. Capitalism is designed that way. Republicans have perfected this thievery.

    Well done, voters.

  8. Some conservatives (so-called and legitimate) asserted that throwing money at the IRS is not the answer. Rather, massively simplifying our tax code and replacing SOME of the dependence on income tax with a national sales tax is long overdue. I happen to agree with them. Our current system of national taxation was designed to allow representatives in Congress to peddle tax code language to provide special deductions, credits, carryovers, exemptions, mark-ups, mark-downs, and so on that all have the effect of reducing revenues, income or both for special interests. In exchange for these favors they pay for political campaigns.

    A national sales tax, much like our state income tax, is much harder to fiddle with from year to year because the sheer volume of taxable events demands that its collection be fully automated. Related to the sales tax is the transaction tax, which is a better method to tax financial services. In other words, every single financial transaction can be assessed a tax of a small fraction of a penny and would raise billions – every use of a debit card, credit card, check, stock or ETF purchase or sale and on and on. It can’t be fiddled with and it’s easy to audit.

    On the income tax side, thousands of pages of tax code could be eliminated and individual tax rates could be reduced and significantly for two reasons: 1) the offset of revenue gained from the sales tax, and 2) the increase in revenue from the elimination of all but a handful of deductions, credits, etc. mentioned above, and those are geared to support low and middle income families and small (and I MEAN small) businesses. The same tax rates are applied to the first $500K or more of income REGARDLESS of how the taxed entity is organized: individual, LLP, LLC, Corp, S-Corp, etc.

    And last the sacred ox just begging to be gored: 501(c)(3) and 501(c)(4) corporations, otherwise known as non-profits. Eliminate them. All of them. No other part of our tax code has been more exploited for profit than the nations charitable organizations, churches, PACs, home-owner associations, and especially universities, some of which have essentially become hedge-funds with an education subsidiary.

  9. If justice and the rule of law were a person, then they are the only celebrity that matters in this issue.

  10. If the past President has done one good thing it would have to be that he disclosed how much we “depended on the kindness of strangers,” (Blanche DuBois in Streetcar Named Desire), to manage our government. If we are to return to the rule of law, we will have to make some new laws to cover the criminality that has been exposed. If it violates the Constitution, shouldn’t it also violate a law somewhere?

  11. Traffic laws – LOL – running red lights? excessive speed? not stopping at stop signs? reckless driving? driving while texting? Give me a break. I am AN AMERICAN! I can do whatever I please! And, if I get caught, I am most likely to get off with a minor fine at best.

  12. J Smith, the former guy is a “Malignant Narcissist,” a term created by Eric Fromm, to describe Hitler, which combines narcissism, sociopathy, and other personality disorder features. It fits Trump to a tee. Your “supremely” ought to have beEn written as “SUPREMELY.”
    All of what Vernon said.
    There was talk, yesterday, about Mark Meadows and Trump’s “Shadow” government, and Meadows suggesting that trump will not be re-installed until October, rather than this month. My first reaction, relating to today’s focus on theft, was that he’s just looking to have more time to grift his sheep. But, it later occurred to me that this may be his way of trying, once again, to avoid indictment, claiming, spuriously, of course, that he’s unindictable as any form of president.

  13. Mitch. Actually, if you look up the clinical requirements for someone to present as a PSYCHOPATH, Trump’s profile checks all the boxes.

    One must ask, “Why do so many millions of the self-imposed oppressed ‘think’ it’s O.K. to have a psychopath for a president?”

    Maybe it’s because of mass ignorance and the crazed, right-wing media that is making a fortune off this mindset that perpetrates our national madness.

  14. There is of course a bright line that separates legal and illegal in law and order countries. For decades businesses have paraded in front of us the meme that their only responsibility is to shareholders who reward them for expertise in toeing the line between legal and illegal thus paying shareholders the maximum return. However many corporate entities hid behind the same meme to go over the line to help themselves to the funds rightly allocated for paying for the infrastructure that they share use of with we the people thus sticking us with their share of the costs for it. For them accountability sucks.

    For us though it’s a reckoning long overdue. Sorry Donald but the mythical world of your imagined exceptionalism has been breached by reality.

  15. Lester your irony is hitting my funny bone again. I am glad most people follow the laws of the road. And yes, I have seen lots of people run a red light which is just one reason why I am cautious when I am driving.

    What do sociopaths want? Power and money. They want to avoid vulnerability at all costs and I suspect many like DT are Alpha males. They abhor sharing their wealth with others because they lack empathy. They have little to no capacity for compassion and because of this create a lot of hell on earth. And Republicans support their grab for wealth and power when they ignore their tax evasion. I can’t say Democrats are not also influenced by the wealthy. But at least Democrats have never promised no new taxes. Biden’s attempt to tax the wealthy more has been stalled by Republicans who don’t want their precious “tax reform” bill to be undermined.

    One has to wonder how much our deficit would be reduced if the extremely wealthy(the 1%) paid their fair share of taxes instead of skillfully working with loopholes in the tax rules. It is too bad they don’t attempt to reduce their taxation with philanthropy that is aimed at ensuring the poor are lifted out of poverty, that the sick are healed without a big bill, that the widow and the orphan are cared for. Well, as I said before, sociopaths have no empathy and don’t care who suffers.

    I have to say that Warren Buffet amazed me when he said he should be taxed more. I’m wondering if he is one of the few honest billionaires. He does not strike me as sociopathic. He’s too humble. I doubt that Bill Gates is a sociopath. If only many more of the billionaires were like those 2.

    If we had a national sales tax, who would be the most affected? The middle class. I too would like it if we could simplify the tax codes, but we should ensure that when we do so, the new tax systems require that the wealthy pay their fair share and that the loopholes helping them hoard their wealth are removed.

    I just got my pension check. So now I will think about which charity I want to support this month so I can be the small difference that makes all the difference in the world.

  16. Robin, I have seen three of this country’s wealthiest men state they should be paying more income taxes. Warren Buffet, President Barack Obama and Stephen King.

  17. The simplest method would probably be a graduated progressive income tax, on businesses and individuals that would cover all income, including dividends, capital gains etc., no deductions or exemptions. Close the off shore loopholes too.

  18. ML,

    Of course. Suggest that on the media, and the Republicans will just get a raise from their corporate donors. Capitalism run amok…

  19. It has been fascinating to see any number of articles/opinions in the “mainstream media” suggesting that the charges against “The Former, Inc” are relatively minor and commonplace. Such is the devolution of our ethical framework.

    And, do consider, if found guilty, the likelihood of no or suspended jailtime and fines as a relatively small percentage of the money gained/tax avoided. And, of course, compare this to the sentences handed down to the poor for minor/non-violent crimes…

    There ARE 2 Americas….

  20. Didn’t Leona Helmsley tell us years ago that taxes were only for poor people? Maybe we should have believed her.

  21. I have long wondered why no AG has gone after Trump for writing fraudulent contracts. He has openly stated that anyone who pays someone hired under a contract the agreed amount is a fool. That is in fact stating that he has never signed a contract with a vendor he intended to pay as written, which is pretty much the definition of a fraudulent contract.

    Vernon Turner, You said “Why do so many millions of the self-imposed oppressed ‘think’ it’s O.K. to have a psychopath for a president?”. The answer to that question is to be found in Isabel Wilkerson’s new book “Caste: The Origins of our Discontents”, starting on Chapter 11, page 178 to 184. Grab a copy next next time you are in a library or bookstore, and read those pages. My bet is that you will walk out with the book.

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