Trump Organization found guilty on criminal tax fraud charges

Mr Trump has not been found guilty of any crimes himself but his companies could have trouble getting loans or doing business in the future

Andrew Feinberg
Wednesday 07 December 2022 02:18 GMT
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A New York City jury has convicted two subsidiaries of former president Donald Trump’s eponymous real estate and licensing company, the Trump Organization, on charges stemming from what prosecutors described as a sweeping, multi-decade scheme to avoid paying payroll taxes by compensating top executives with untaxed benefits such as housing and automobiles.

Jurors rendered a guilty verdict on all of the charges included in an indictment filed last year against the Trump Corporation, the Trump Payroll Corporation, and the Trump Organization’s long-time chief financial officer, Allen Weisselberg.

Mr Weisselberg, who served as a key prosecution witness against his employer as part of a plea agreement, testified during the trial to having received more than $1.5m in untaxed “indirect employee compensation” through the scheme, under which he received a rent-free apartment, private school tuition for his grandchildren, furniture, and Mercedes-Benz automobiles for him and his wife.

Prosecutors also alleged that other Trump Organization executives received similar forms of non-monetary compensation amounting to millions of dollars, none of which was properly accounted for when it came time for the company to pay taxes on employee pay and benefits.

In closing arguments, Trump Organization attorney Susan Necheles claimed Mr Weisselberg was the one who had executed the scheme to satisfy his own avarice and argued that he alone should be punished.

“We are here today because of one reason and one reason only, because of the greed of Allen Weisselberg,” she said. She added that Weisselberg “wanted a deal with the government because he knew he did something wrong and was afraid of a long prison sentence”.

But in their own closing arguments, prosecutors offered up a far more famous name when suggesting who is to blame for the company’s alleged violations of New York tax law.

When he spoke to jurors on Friday, Manhattan assistant district attorney Joshua Steinglass told them it was the ex-president who was ultimately culpable for his company’s misdeeds.

Mr Trump had hardly been mentioned during the weekslong trial, but as he showed jurors company payroll documents showing the untaxed compensation, he placed blame squarely on the former chief executive.

“Donald Trump is explicitly sanctioning tax fraud – that’s what this document shows,” he said. He added that the “narrative” spun by the company which portrayed the ex-president as “blissfully ignorant” of his company’s accounting practices was “not real”.

After the company’s attorneys objected and argued that Mr Steinglass was making an overtly political appeal by invoking Mr Trump’s name, the prosecutor replied that he and his colleagues had “religiously avoided politics” during their presentations.

He said he was justified in using Mr Trump’s name because it is his company on trial, and because Mr Trump is still the head of the company.

“It had nothing to do with the fact he is Donald Trump, but the fact that he is the CEO of the company. If his name was John Doe, there would be no objection here,” he said.

The Trump Organization can now be made to pay a fine that could be as high as millions of dollars as a result of the conviction after the companies are sentenced on 13 January 2023. Additionally, it may be far more difficult for the company to continue to conduct business as it normally has because many banks will not do business with a company that has a criminal conviction.

Mr Trump has long argued that the case against his company is part of a long-running “witch hunt” by Democratic prosecutors aiming to harm his political career, but in her opening statement, prosecutor Susan Hoffinger told jurors that the charges against his company were not political.

“This case is about greed and cheating,” she said. Weeks later, the jury appeared to have agreed with her.

In a statement, New York County district attorney Alvin Bragg described the prosecution of Mr Trump’s companies as having been “about greed and cheating” and said “no corporation is above the law” in his jurisdiction.

“For 13 years the Trump Corporation and the Trump Payroll Corporation got away with a scheme that awarded high-level executives with lavish perks and compensation while intentionally concealing the benefits from the taxing authorities to avoid paying taxes,” he said. “Today’s verdict holds these Trump companies accountable for their long-running criminal scheme.”

New York State attorney general Letitia James, who is herself overseeing a massive civil fraud lawsuit against the entire Trump Organization and whose staff assisted the Manhattan prosecutors in bringing the criminal case against the two Trump subsidiaries, said in a statement that she was “proud to assist in this important case” and commended Mr Bragg and his staff for the successful case against the ex-president’s company.

“We can have no tolerance for individuals or organisations that violate our laws to line their pockets,” she said. “This verdict sends a clear message that no one, and no organisation, is above our laws”.

Mr Trump condemned the verdict in a statement emailed to reporters by his official post-presidential office, which is paid for with government funds.

Under a version of the Great Seal of the United States, Mr Trump said he was “disappointed” by the result and vowed to appeal.

“This case is unprecedented and involved no monetary gain to these two Corporations. It is a continuation of the Greatest Political Witch Hunt in the History of our Country,” he said.

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