Paper trail and judge’s warning: Trump trial key takeaways, day 12

Donald Trump’s criminal trial in New York entered a new phase on Monday, as prosecutors moved on to the alleged falsification of business records to cover up hush-money payments to Stormy Daniels, after previously calling witnesses who described a conspiracy to kill the story.

The prosecutors in the Manhattan district attorney’s office started this week with the former Trump Organization controller Jeffrey McConney, the No 2 in the accounts department, who processed the former Trump lawyer Michael Cohen’s invoices seeking reimbursement for the hush money.

Here are the takeaways on day 12 of “People of New York vs Donald J Trump”:

Prosecutors argue Cohen’s ‘expenses’ were not processed as expenses

Prosecutors directly made the case that Trump essentially approved and directed an illicit reimbursement plan, whereby the money wired to Cohen was made to look like payments for bona fide legal work through sham invoices submitted by Cohen.

McConney ran through handwritten notes entered into evidence to confirm that the Trump Organization had doubled the amount Cohen was asking for, so that after being taxed at 50%, Cohen would be reimbursed the full amount for which he was out of pocket.

The thrust from prosecutors was that this was all unusual. In fact, McConney testified it was the only time in his 35 years at the company that something technically classified as an expense was “grossed up” – suggesting that they were actually not expenses.

McConney also testified that even though Cohen had written up an invoice that asked to be paid “pursuant to the retainer agreement”, he was not aware of any such retainer. Prosecutors used that to suggest it didn’t exist, and it was a cover for records purposes.

Trump argues ‘legal expense’ was a dropdown label, not a falsification

During the cross-examination, Trump’s lawyer Emil Bove suggested that the alleged falsification of records was not a falsification at all, because the “legal expense” label on the general ledger was a catch-all label used on the Trump Organization’s internal system when entering payments to lawyers.

McConney described the Trump Organization’s accounting software as an antiquated system, implemented around 1990, and “legal expense” was part of a dropdown menu of a number of different categories.

McConney affirmed that the “legal expense” label was used because Cohen was a lawyer and any payments to attorneys were just classified as a “legal expense”. In doing so, he appeared to credit the Trump defense theory that there was never any intent to mislead.

Trump warned of jail for further gag-order violations

Before McConney took the stand, Trump was warned by the presiding judge Juan Merchan that he could next face jail time given the $1,000 fines imposed against him for repeatedly violating the gag order did not appear to be having a deterrent effect.

“As much as I do not want to impose a jail sanction,” Merchan said, “I want you to understand that I will, if necessary, and appropriate.”

Trump was found in contempt again on Tuesday, this time for making inflammatory statements about the jury, after previously being held in contempt for nine earlier violations of the gag order that also prohibits Trump from attacking potential trial witnesses and fined a total of $9,000.