Donald Trump’s businesses have been found guilty of tax fraud, in a significant victory for Manhattan prosecutors who pursued the only criminal case against the former US president’s empire even as he launched a third bid for the White House.
A New York jury on Tuesday convicted The Trump Organization — whose entities had been charged with illegally reducing the tax it paid on executive pay by awarding top managers “off the books” perks — on all 17 counts following a five-week trial.
The case, originally brought by the Manhattan district attorney’s office last summer, hinged upon the testimony given by The Trump Organization’s former chief financial officer Allen Weisselberg, who has worked for the Trump family in a number of roles since 1973.
Weisselberg pleaded guilty in August to defrauding tax authorities via a scheme that allowed him to receive $1.76 million in unreported income from Trump entities, in the form of a luxurious Upper West Side apartment, Mercedes cars and private tuition for his grandchildren.
He was promised a lenient sentence — five months of incarceration, albeit in the notoriously tough Rikers Island jail — on the condition that he testified truthfully in the trial against The Trump Organization.
Sentencing has been set for January 13th. A lawyer for the Trump Organization said it plans to appeal.
“This was a case about greed and cheating,” Manhattan district attorney Alvin Bragg said in a statement following the verdict. “In Manhattan, no corporation is above the law.”
Lawyers for the Trump businesses sought to establish that Weisselberg and The Trump Organization’s controller Jeffrey McConney, who also took the stand, acted alone, and that despite personally signing several cheques and leases, Mr Trump was unaware of the tax fraud being committed by his closest lieutenants.
Under earlier cross-examination, Weisselberg (75), who is still on The Trump Organization’s payroll, fought back tears as he appeared to corroborate that assertion, insisting it was his “greed” alone that had led him to keep the perks off his employer’s tax forms.
Defence attorney Michael van der Veen said the testimony proved that “Weisselberg did it for Weisselberg”. In closing arguments last week, he added: “This case isn’t about Donald Trump, it is about Weisselberg and two corporate entities that did not commit crimes.”
For their part, government prosecutors sought to establish that Weisselberg and other executives had acted with, and for the benefit of, their employer.
“It was a win-win, a way to get more money into executives’ pockets while keeping [The Trump Organization’s] own costs as low as possible,” Manhattan assistant district attorney Joshua Steinglass told jurors during closing arguments.
He added that if the actions of Weisselberg, who earned more than $1million a year as chief financial officer, were truly unimportant to the running of The Trump Organization, it would make him “the highest-paid lackey in history”.
The Trump Organization is unlikely to be fined more than $1 million, but the guilty verdict could hamper the company’s ability to get loans, make deals and obtain government contracts.
Trump, his business and his eldest children face a suite of financial fraud charges in a civil case brought by the New York attorney-general Letitia James, which is set to go to trial in October 2023. A loss in that case could lead to fines in excess of $250 million.
- Copyright The Financial Times Limited 2022