Former Trump Organization CFO Allen Weisselberg testifies on how he was paid

Former Trump Organization Chief Financial Officer Allen Weisselberg told prosecutors Thursday the company allegedly stopped paying personal expenses for him and other executives in 2017 as part of a "cleanup process" when Donald Trump was elected president. The Trump Organization is on trial in New York City for tax evasion.

Weisselberg had allegedly been having the company reduce his reported salary by the same amount as fringe benefits he was getting, allowing him to save on income taxes and the company to save on payroll taxes.

One day in 2012, Weisselberg testified Thursday at the cmpany's criminal tax evasion trial, Trump was in his office on the 26th floor of Trump Tower with Weisselberg when his son Donald Trump Jr. walked in with checks to sign for his children's school tuition.

Weisselberg said Trump chuckled, turned to Weisselberg and said, "I may as well pay for your grandkids too."

Trump began signing three checks per year for each of Weisselberg's two grandchildren to attend Columbia Grammar at a total annual cost of about $100,000, Weisselberg claimed. The jury saw images of some of the checks.

"I said, 'I'm going to pay you back for this,'" Weisselberg testified.

Weisselberg pleaded guilty in August and is testifying as part of a plea deal. He is still being paid $640,000 a year and expecting a $500,000 bonus at the end of the year despite pleading guilty to 15 criminal charges and no longer working in the office as chief financial officer, according to his testimony.

Weisselberg said he paid back Trump by instructing company controller Jeff McConney to reduce his salary and bonus by the same amount as the tuition payments and his rent, car leases and other personal expenses the Trump Organization was paying. In 2015, the amount was more than $195,395, according to a spreadsheet displayed for the jury.

"I paid back the entity that paid my salary," said Weisselberg, who has pleaded guilty to skirting nearly $2 million in income taxes and is testifying pursuant to a deal with the Manhattan District Attorney's office.

Once the Trump Organization stopped paying his rent, his car leases, his grandchildren's tuition and other personal expenses, Weisselberg said he asked for a $200,000 raise to cover the costs.

By reducing his salary, prosecutor Susan Hoffinger claimed it caused the Trump Organization to incorrectly report to tax authorities.

"Did you know the Trump Payroll Corporation was falsifying your W2?" Hoffinger asked.

"I knew my payroll reporting was incorrect, yes," Weisselberg replied.

He conceded the practice saved the company on its payroll taxes. Weisselberg said the alleged practice stopped in 2017, when Trump became president. Prosecutors have suggested at trial the company knew the practice was wrong but allowed it to continue until Trump's campaign and presidency brought new scrutiny.

"We were going through an entire cleanup process of the company to make sure that since Mr. Trump is now president that everything was being done properly," Weisselberg said.