A Manhattan jury has found two Trump Organization companies guilty of multiple charges of criminal tax evasion and falsifying business records related to a 15-year scheme to defraud tax authorities by failing to file and pay taxes on the compensation of senior executives.
The Trump Corp. and the Trump Payroll Corp. were found guilty of all the charges against them.
Donald Trump and his family have not been charged in the case, but the former president was mentioned several times during the trial by prosecutors about his connection to executive benefits, including funded apartments. by business, car rentals and personal expenses.
The Trump Organization could face a maximum fine of $1.61 million when it is sentenced in mid-January. The company is not at risk of being broken up as there is no mechanism under New York law that would dissolve the company. However, a felony conviction could affect his ability to do business or obtain loans or contracts.
The guilty verdict comes as Trump faces scrutiny from federal and state prosecutors for his handling of classified documents, his efforts to overturn the 2020 election results and the accuracy of business records and of the Trump Organization’s financial statements. He also faces a $250 million civil lawsuit from the New York Attorney General alleging he and his adult children were involved in a decade-long fraud. The Attorney General is seeking to permanently bar them from serving as an officer or director of a corporation in New York State, among other penalties.
Trump Org. Lawyers said they plan to appeal.
“This was a case of greed and cheating,” Manhattan District Attorney Alvin Bragg said. “The Trump Corporation and the Trump Payroll Corporation got away with a scheme that gave high-level executives lavish benefits and compensation while intentionally hiding the benefits from tax authorities to avoid paying taxes. Today’s verdict holds these Trump corporations accountable for their longstanding criminal plan.
Elie Honig, CNN’s senior legal analyst and former federal prosecutor, said Bragg’s approach was justified.
“Obviously this is a setback for the Trump Org — a major setback for the Trump Org. They have now been found guilty of criminal conduct, criminal tax evasion,” Honig told CNN’s Victor Blackwell on “ Newsroom”.
“It’s kind of a win for the Manhattan district attorney, too,” Honig said. “Their theory, now, that part of the income of employees, including Allen Weisselberg, was paid through benefits to avoid tax liability – that theory has been vindicated.”
Hear what jurors from Trump Org. lawsuit said about trump
Prosecutor Joshua Steinglass told the jury in closing arguments that Trump had “explicitly sanctioned” the tax evasion and urged them to reject the defense’s argument that the Trump Organization’s former chief financial officer, Allen Weisselberg, was a rogue employee motivated by his own personal greed.
“This whole narrative about Donald Trump being blissfully ignorant is just not true,” Steinglass said.
The jury heard that Trump had agreed on a whim to pay his grandchildren’s Weisselberg tuition and signed a lease for an apartment in Manhattan to shorten the executive’s commute. Trump personally signed his employees’ Christmas bonus checks and he initialed a memo cutting the salary of another top executive, which prosecutors say suggested he had known about it since the start of the fraudulent scheme.
Prosecutors have for years alleged that top executives reduced their reported salaries by the amount of company benefits to avoid paying required taxes.
Weisselberg, who is on paid leave from the company, spent three days on the witness stand. He pleaded guilty to 15 felonies for failing to pay taxes on $1.76 million in earnings. As part of his plea deal, he will be sentenced to five months in prison if the judge finds he testified honestly.
Trump Org. Attorney Susan Necheles has pledged to appeal, blaming Weisselberg for any wrongdoing.
“Why would a company whose owner knew nothing of Weisselberg’s personal tax filings be criminally prosecuted for the personal conduct of Allen Weisselberg, for which he had no visibility or oversight? This case was unprecedented and legally incorrect,” Necheles said in a statement. “We will appeal this verdict.
In his testimony, Weisselberg admitted he should have paid taxes on the compensation, totaling about $200,000 in one year, which included a luxury Manhattan apartment overlooking the Hudson River, two Mercedes Benz car rentals, parking , utilities, furniture, and private tuition for his grandchildren. He also testified that he paid himself and other executives bonuses as if they were independent consultants – allowing the Trump companies to escape paying their taxes.
Weisselberg testified that he pulled off the scheme with the help of his underling, Trump Organization Comptroller Jeffrey McConney. McConney, who received immunity for testifying before the grand jury, admitted some of the unlawful conduct in his testimony.
After Trump was elected president, Weisselberg said, there was a “cleanse” and many illegal practices ceased.
He disclosed conversations he had with Trump, Eric Trump and Donald Trump Jr., but told the jury questioned by Trump’s attorneys that he had not conspired or conspired with anyone in the Trump family.
Weisselberg became emotional at times, telling the jury he was “embarrassed” by his conduct and had “betrayed” the Trump family, who had been his employers for 49 years.
Prosecutors and defense attorneys have decried Weisselberg’s split loyalties — wanting to uphold his plea deal and serve a lesser prison sentence and his loyalty to the Trump family, who could pay him $1 million in compensation this year.
To prove the company’s guilt, prosecutors had to show that Weisselberg or McConney was a “senior officer” who committed the crimes in the course of his employment and “on behalf of” the company.
Prosecutors and defense attorneys circled to discuss what “in the name of” meant.
Judge Juan Merchan also struggled to explain the phrase to the jury and turned to two legal treatises to fashion a definition.
The judge explained this to the jury, saying, “According to the definition of ‘in the name of’, the criminal acts need not actually benefit society. But an agent’s actions are not “on behalf” of a corporation if they were undertaken solely to further the agent’s interests. In other words, if the agent’s actions were done simply for personal gain, they were not “on behalf of” the corporation. »
Alan Futerfas, attorney for the Trump Payroll Corporation, told reporters after the verdict that the conclusion was incorrect.
“A new and really interesting problem developed during the trial. Obviously, the definition of “in the name of” – what it means. And we have filed many documents, the defense team, about the meaning of these words,” Futerfas said. “The judge recognized that there was not much definition on this and that will surely be one of the arguments that we will make.”
Weisselberg walked a fine line in his testimony, telling the jury that he never meant to hurt the company, that he was motivated by greed and primarily wanted to pay less tax. But, he also said, he knew at the time that the company would benefit to some degree from his schemes.
In his testimony, Weisselberg said, “It was an advantage for the company, but it was mainly due to my greed.” He told the jury that the company had saved money by paying less tax on his off-the-books compensation and admitted, when asked by prosecutor Susan Hoffinger if, when his main goal was to avoid the taxes, it also created an advantage for the company.
“To some extent, yes,” Weisselberg testified.
Weisselberg said he and McConney knew at the time that the company would pay fewer payroll taxes through the program, although he said they never explicitly discussed it.
Trump’s attorneys repeatedly argued before the jury that “Weisselberg did it for Weisselberg” to emphasize that he was motivated solely by personal greed.
On cross-examination, Weisselberg agreed that the decision not to pay taxes was his own and was made solely for his own benefit.
“It was my intention,” Weisselberg said when questioned by Trump’s attorneys, “for my own benefit.”
Lawyers for the Trump entities called only one witness, longtime real estate company accountant Donald Bender of Mazars USA, who dropped Trump as a client earlier this year.
Trump’s lawyers said Bender either knew about the informal compensation or should have caught the tax evasion and they accused him of lying on the stand.
When questioned by prosecutors, Bender testified that he trusted and relied on Weisselberg, who testified that he was hiding the illegal scheme.
Steinglass, the prosecutor, told the jury that the Trump Corporations were guilty and that the illegal scheme was concocted “so employees could get more take-home pay while costing Trump Corporation less.” It’s a win-win – unless you’re the taxman.
This story has been updated with additional details.