Trump Criminal Charges Accuse Former President Of Tax Deception

Topline

The criminal charges unsealed against former President Donald Trump this week include a surprise allegation that he helped to deceive tax authorities—an accusation that is not among the 34 criminal counts Trump will face in Manhattan court, but that could be crucial to raising the charges from misdemeanors to felonies.

Former President Donald Trump speaks at his Mar-a-Lago estate Tuesday, April 4, 2023, in Palm Beach, … [+] Fla., after being arraigned earlier in the day in New York City. (AP Photo/Evan Vucci)

Key Facts

Prosecutors charged Trump with 34 counts of falsifying business records for hush-money payments to cover up three alleged affairs—that crime is typically a misdemeanor, but the Manhattan District Attorney’s office elevated them to felonies by claiming the false statements were made with “intent to commit another crime and aid and conceal the commission thereof.”

The DA’s office didn’t specify which additional crimes it plans on using to bump the charges from misdemeanors to felonies, and he wasn’t indicted for anything other than falsifying business records, but prosecutors cited at least three other possible crimes that could be used, including tax offenses.

Prosecutors reference some accounting trickery by the Trump Organization in its arrangement to reimburse Trump’s former lawyer Michael Cohen for the $130,000 he paid adult film star Stormy Daniels: The company instead paid him $420,000, allowing him to characterize the payment as income on his tax returns, subject to a 50% tax rate, instead of a reimbursement, according to a 14-page statement of facts filed in conjunction with the indictment.

Trump had direct knowledge of the repayment plan the Trump Organization executed with Cohen, and met with Cohen in the Oval Office in February 2017 to confirm the agreement, prosecutors alleged.

The indictment alluded to two other possible crimes: In one case, it accuses American Media Inc., which owned the National Enquirer, of falsifying its business records, as part of an agreement with Cohen to purchase the rights to damning stories about Trump then bury them by refusing to publish the allegations (a practice known as “catch and kill”).

Campaign finance violations—which Cohen admitted to in pleading guilty to federal charges in the deal with Daniels—were also featured prominently in the Trump indictment: Trump “hid damaging information from the voting public during the 2016 presidential election” to “benefit [his] electoral prospects” and “violated election laws,” according to the statement of facts.

Prior to the indictment being unsealed on Tuesday, legal experts speculated that the district attorney’s office would tie the misdemeanor charges of falsifying business records to federal campaign finance violations—a strategy that hinged on shaky legal footing since the case is being prosecuted in state court.

The tax allegation “may save the case from legal challenges” presented by the election law theory, New York University law professor Ryan Goodman told the New York Times.

Trump pleaded not guilty and has denied all wrongdoing.

What We Don’t Know

Whether prosecutors will cite tax violations or campaign finance violations—or some other crime—to elevate the charges to felonies. Manhattan District Attorney Alvin Bragg said in a press conference Tuesday “the indictment doesn’t specify because the law does not so require,” though he highlighted New York state election law and false statements to tax authorities.

Surprising Fact

Trump urged Cohen to delay the payments to Daniels “until after the election” when “they could avoid paying altogether, because at that point it would not matter if the story became public,” prosecutors alleged.

Chief Critic

Conservative media seized on the absence of some details in the court documents made public on Tuesday, moments after Trump pleaded not guilty before a Manhattan criminal court judge. The New York Post—which has run a barrage of disparaging stories against Bragg during his first year in office, but has also repeatedly criticized Trump—took Trump’s side in its coverage of the indictment: “Is that it? Bragg’s historic case vs. Don falls flat” the tabloid’s Wednesday front-page headline read. Some legal experts also raised questions about the limited information included in the indictment. “I was expecting more in the four corners of the indictment,” white-collar criminal defense lawyer Jeremy Shockett told the Wall Street Journal.

Contra

Bragg said Tuesday the historic indictment of former President Donald Trump is similar to scores of other “bread-and-butter” white-collar crimes his office deals with. Legal experts also observed that the indictment may have been purposely scant on details to avoid the perception that Bragg’s office was attempting to influence potential jurors, amid allegations that the case is politically motivated. “When you give a speaking indictment, you’re swaying the public to an extent,” former prosecutor and Stetson University professor Ellen Podgor told the Wall Street Journal.

Big Number

280. That’s the number of falsifying business records cases the Manhattan District Attorney’s office has filed since 2019, the Wall Street Journal reported.

Key Background

Trump pleaded not guilty to the charges on Tuesday at his arraignment, which marked the first-ever prosecution of a former or sitting U.S. president. Prosecutors allege Trump played a direct role in falsifying business records to make the hush-money payments to Daniels and two others who claimed Trump had extramarital affairs: former Playboy model Karen McDougal, who said she slept with Trump while he was married to Melania Trump, and a former Trump Tower doorman who claimed Trump had a child out of wedlock with his former housekeeper (Trump has denied all three of the alleged affairs). The Trump Organization reimbursed Cohen for the $130,000 payment to Daniels made just before the 2016 presidential election using checks “disguised as a payment for legal services,” prosecutors alleged. American Media Inc., whose former CEO David Pecker was a long-time friend of Trump’s, paid off the doorman in 2015, just after Trump announced his presidential candidacy, then paid McDougal $150,000 for the rights to her story in 2016, according to court records.

What To Watch For

If the case against Trump goes to trial, it is expected to take place some time in the first half of next year. If convicted on all 34 felony counts, he faces a maximum sentence of 136 years in prison, four years for each, though it’s unlikely Trump would receive more than a few months of jail time, New York criminal law experts have said.

Trump Criminal Charges Accuse Former President Of Tax Deception—Here’s Why That Matters