Trump Organization Found Guilty Of Tax Fraud At Trial

Topline

The Trump Organization has been found guilty of criminal tax fraud, a jury declared Tuesday, after prosecutors accused former President Donald Trump’s company of evading taxes by paying executives through gifts and off-the-books compensation—though the company is likely to only face a relatively small fine.

Key Facts

Crucial Quote

“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,” Manhattan District Attorney Alvin Bragg said in a statement Tuesday. “Today’s verdict holds these Trump companies accountable for their long-running criminal scheme.”

Contra

The Trump Organization plans to appeal the decision. Trump, who was not directly involved in the litigation, slammed the verdict in a statement Tuesday as “a continuation of the Greatest Political Witch Hunt in the History of our Country,” while pointing the finger squarely at Weisselberg for any wrongdoing. “This case was about Allen Weisselberg committing tax fraud on his personal tax returns, etc., with he and every witness repeatedly testifying that President Trump and the Trump Family knew nothing about his actions,” Trump said.

Big Number

$1.76 million. That’s approximately how much Weisselberg received in indirect compensation from the Trump Organization between 2005 and 2021, according to prosecutors. The perks included the company paying for Weisselberg’s Manhattan apartment, private school tuition for his family members and leases for Mercedes Benz vehicles for him and his wife.

Big Number

Whether Manhattan prosecutors will still bring charges against Trump himself. While the ex-president was not indicted in the case against the Trump Organization and Weisselberg, the Manhattan District Attorney’s office has also been investigating him directly. That probe had seemed to die off in recent months without anything coming of it, but the New York Times reported in November that prosecutors have now “jump-start[ed]” the criminal investigation into the former president once again. Their investigation is reportedly now focused on Trump’s “hush-money” payments to Stormy Daniels after the adult film actress had an alleged affair with Trump before he became president, which was the initial focus of the DA’s probe when it was first opened in 2019, before prosecutors broadened the scope of the investigation to look into possible bank, tax and insurance fraud. Bragg’s office has hired prosecutor Matthew Colangelo as it ramps up the investigation, it confirmed Monday. Colangelo previously worked at the Justice Department and New York Attorney General’s office—both of which have conducted their own investigations into Trump.

Tangent

The Manhattan prosecutors’ case against the Trump Organization that went to trial is separate from a civil fraud case against the company brought by New York Attorney General Letitia James. James sued the Trump Organization, Trump himself, his children and business associates in September, alleging the company fraudulently inflated the value of its assets on financial statements more than 200 times over the course of a decade, in order to obtain more favorable business terms and inflate Trump’s net worth. That case, which is set to go to trial in October 2023, could result in greater punishments for the Trump Organization than the Manhattan case. James is asking the court to impose a range of penalties, including canceling certificates for Trump’s businesses, barring Trump from engaging in any commercial real estate acquisitions for five years, blocking him and his children from serving as officers or directors in any New York business and forcing the defendants to pay an approximately $250 million fine. The court has also already ordered an independent monitor to oversee the company’s activities until a final judgment is reached at trial.

Key Background

The Manhattan DA’s office—then run by former DA Cyrus Vance—opened its investigation into Trump in 2019 in response to the hush-money payments to Daniels, before becoming more broadly about the Trump Organization’s financials and leading to the Trump Organization and Weisselberg’s indictments in July 2021. Weisselberg pleaded guilty to 15 charges against him in August, and will serve up to five months in prison—versus a potential 15-year sentence if he had been convicted at trial. The CFO testified at trial as part of his plea deal, in which he admitted to the fraudulent scheme and admitted it saved the company money in taxes. Weisselberg did not testify that the Trump family authorized him to commit crimes or collaborated with him on the scheme at all, distancing them from playing a direct role in the fraud, though he did testify that Trump signed checks for his family’s private school tuition.

Further Reading

How Donald Trump And His Longtime CFO, Allen Weisselberg, Used Swanky Apartments To Give Their Kids A Head Start In Life (Forbes)

Trump Organization’s Criminal Trial For Tax Fraud Starts—Here Are The Consequences It Could Face (Forbes)

Prosecutor: Evidence shows Trump ‘explicitly’ OK’d tax fraud (Associated Press)

Jury begins deliberating in Trump Organization’s criminal tax fraud trial (Reuters)