Trump Organisation guilty of 15-year tax fraud scheme after New York trial
The firm was found guilty of avoiding paying personal income taxes on perks such as rent-free apartments and luxury cars
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Donald Trump’s family real estate company has been found guilty of running a criminal scheme to defraud tax authorities for 15 years.
The Trump Organisation was convicted of tax fraud on Tuesday (6 December) after two days of jury deliberations in New York. The scheme operated by the firm included helping executives dodge paying personal income taxes on lavish perks such as rent-free Manhattan apartments and luxury cars.
A jury found two corporate entities at the Trump Organisation guilty on all 17 counts, including conspiracy charges and falsifying business records. The firm, which operates hotels, golf courses and other real estate around the world, is synonymous with the former US president, but Mr Trump himself, nor his family members, were personally on trial.
Manhattan District Attorney Alvin Bragg said the verdict “underscores that in Manhattan we have one standard of justice for all”. As punishment, the Trump Organisation could be fined up to 1.6 million dollars (£1.32 million) — a relatively small amount for a company of its size, but the conviction might make some of its future deals more complicated.
Mr Trump, who recently announced he was running for president again, has said the case against his company was part of a politically motivated “witch hunt” and Trump Organisation lawyer Alan Futerfas has vowed to appeal.
The Manhattan district attorney’s case against the frim was built largely around testimony from the company’s former finance chief, Allen Weisselberg, who previously pleaded guilty to charges that he manipulated the company’s books and his own compensation package to illegally reduce his taxes. Weisselberg testified in exchange for a promised five-month jail sentence.
To convict the Trump Organisation, prosecutors had to convince jurors that Weisselberg or his subordinate, senior vice president and controller Jeffrey McConney, were “high managerial” agents acting on the company’s behalf and that the company also benefited from his scheme.
Trump Organisation lawyers repeated the mantra “Weisselberg did it for Weisselberg” throughout the month-long trial and they contended the executive had gone rogue and betrayed the company’s trust. They argued that no one in the Trump family or the company was to blame.
After Tuesday’s verdict, a company lawyer, Susan Necheles, repeated that argument, stating: “Why would a corporation whose owner knew nothing about Weisselberg’s personal tax returns be criminally prosecuted for Allen Weisselberg’s personal conduct, for which they had no visibility or oversight? This case was unprecedented and legally incorrect.”
Although he testified as a prosecution witness, Weisselberg also attempted to take responsibility on the witness stand, saying nobody in the Trump family knew what he was doing. He said: “It was my own personal greed that led to this.”
Manhattan prosecutors alleged the former president “knew exactly what was going on” with the scheme - an accusation he and the company’s lawyers have denied.
Weisselberg, who pleaded guilty to dodging taxes on 1.7 million dollars in fringe benefits, testified that he and McConney conspired to hide that extra compensation from his income by deducting their cost from his pre-tax salary and issuing falsified W-2 forms.
During his closing argument, prosecutor Joshua Steinglass attempted to refute the claim that Mr Trump knew nothing about the scheme by showing jurors a lease Trump had signed for Weisselberg’s company-paid apartment, plus a memo he initialled authorising a pay cut for another executive who got perks. “Mr Trump is explicitly sanctioning tax fraud,” Mr Steinglass argued.
The verdict does not end Mr Trump’s battle with Mr Bragg, a Democrat who took office in January, as a related investigation of the former president that began under his predecessor, District Attorney Cyrus Vance Jr, is “active and ongoing”.
In that wide-ranging probe, investigators have examined whether Mr Trump misled banks and others about the value of his real estate holdings, golf courses and other assets — allegations at the heart of New York Attorney General Letitia James’ pending lawsuit against the former president and his company.
The district attorney’s office has also investigated whether any state laws were broken when Mr Trump’s allies made payments to two women who claimed to have had sexual affairs with the Republican years ago.
Near the end of his tenure last year, Mr Vance directed deputies to present evidence to a grand jury for a possible indictment of Mr Trump. After taking office, though, Mr Bragg let that grand jury disband so he could give the case a fresh look. On Monday (5 December), he confirmed that a new lead prosecutor had been brought on to handle that investigation, signalling again that it was still active.
Mr Trump is also being investigated by the US Department of Justice over his handling of sensitive government documents after he left office in January 2021, as well as his attempts to overturn the November 2020 election after losing to Joe Biden.