Trump companies unlikely to be fatally hit by tax fraud verdict

Former president has hit out at legal proceedings as a ‘witch hunt’

The court finding in New York that companies in the Trump Organization were guilty of tax fraud may be an embarrassment but is unlikely to lead to the collapse or dissolution of the business of the former US president.

Nor will it lead to any criminal prosecution of Donald Trump or any member of his family.

A jury in Manhattan on Tuesday found the two Trump companies guilty of tax fraud and other financial crimes.

Prosecutors contended that some Trump Organization executives received off-the-books benefits such as high-end apartments, leased expensive cars and even the payment of school tuition costs for family members.


The companies could face a fine of about $1.6 million (€1.1 million), but this is unlikely to have a significant financial effect on the overall organisation which declared revenue of at least $278 million in 2020.

The two companies in the overall Trump Organization at the centre of the case – the Trump Corporation and ‌the ‌Trump Payroll Corporation – are not key revenue-generating parts of the business, but are mainly involved in carrying out back-office roles.

However, it is possible that the court finding could have implications for the Trump businesses if, for example, financial institutions were more reluctant to lend them money.

Donald Trump, whose name features prominently on many of his properties, was not indicted as part of the legal proceedings against his company. Nor were any of his family.

The Trump Organization is expected to appeal the court finding.

Trump and his family could, however, separately face a civil action by the New York attorney general over alleged fraud.

Letitia James in September announced a lawsuit against Trump himself, as well as three of his children and his company. The suit accuses them of “staggering” fraud and alleges the defendants lied to lenders and insurers as well as fraudulently overvaluing assets by billions of dollars.

The former president has criticised the legal proceedings against his companies as a politically-motivated witch hunt.

After the verdict on Tuesday, the Trump Organization hit out at its former chief financial officer Allen Weisselberg. It said he had testified under oath that he “betrayed the trust the company had placed in him”.

“The notion that a company could be held responsible for an employee’s actions, to benefit themselves, on their own personal tax returns is simply preposterous,” it said in the statement.

Prosecutors in the case had contended that Trump “explicitly sanctioned” tax fraud and urged the jury to reject the idea that Weisselberg was a rogue employee motivated by greed.

Prosecutors maintained: “This whole narrative that Donald Trump is blissfully ignorant is just not true.”

The big question, at a time when Trump is already facing investigation over the attacks at the US Capitol on January 6th last year as well as over classified documents being found at his home and club in Florida, is whether the finding of tax fraud against some of his companies will have an impact on the political fortunes of the former president.