Trump Organization Found Guilty of Criminal Tax Fraud

Victoria Bekiempis / Rolling Stone
Trump Organization Found Guilty of Criminal Tax Fraud Donald Trump at the Hilton Anatole on Aug. 6, 2022 in Dallas, Texas. (photo: Brandon Bell/Getty Images)

Prosecutors argued the ex-president "explicitly sanctioned" an illegal tax scheme perpetrated by his companies, which on Tuesday were convicted of all 17 charges they faced

Donald Trump’s eponymous company was found guilty of tax fraud in a weeks-long Manhattan criminal fraud trial during which prosecutors claimed the ex-president was “explicitly sanctioning tax fraud.” The organization was convicted on all nine counts it faced, while the Trump Payroll Corporation was convicted on another eight counts. The jury deliberated for less than two days.

This trial against several of Trump’s namesake businesses — the Trump Organization, Trump Payroll Corporation, and Trump Corporation — stemmed from a 2021 indictment. Prosecutors alleged that the companies colluded in a 15-year-long tax fraud scheme. The alleged fraud plot centered on giving untaxed benefits to Allen Weisselberg, the Trump Organization’s former chief financial officer, in a “sweeping and audacious illegal payments scheme.”

Prosecutors maintained that Weisselberg, who for decades served as Trump’s moneyman, enjoyed many benefits for his almost 50 years of loyalty to the clan. Starting in 2005, Weisselberg stayed rent-free in an apartment on Manhattan’s West Side that was paid for by The Trump Corporation.

The company also covered his utility bills and parking garage fees, the indictment alleged. These perks didn’t end at a free residence — Trump’s corporation covered leases on two Mercedes-Benzes that Weisselberg and his wife allegedly treated as their personal cars. Several of Trump’s companies also gave cash to Weisselberg around the December holidays, so that he could give “personal holiday gratuities.” In total, these generous goodies reached $1.7 million in untaxed benefits.

Weisselberg copped to a 15-count indictment in August for these purported payouts. The septuagenarian answered “yes, your honor” when judge Juan Merchan questioned if he “engaged in a scheme” with the Trump Organization “to defraud federal, New York state, and New York City tax authorities.” Weisselberg’s bombshell admission appeared to directly place Trump’s businesses at the center of criminal wrongdoing, including tax fraud and falsification of business records.

Weisselberg served as prosecutors’ star witness at trial. He linked Trump’s companies to illegal tax practices. Weisselberg told jurors that the rent on his free apartment “was authorized by Donald Trump.” He said that the Trump Corporation paid his utility fees and said it “was my understanding” that this practice was green-lighted by Trump. Weisselberg also said that Trump covered his grandchildren’s private-school fees. Prosecutors claimed that this was a taxable benefit.

During his second day testifying, Weisselberg said that he and other company honchos tried to remove sketchy financial activities from several Trump companies’ records when the reality TV big became president. “We were going through an entire cleanup process at the company after Mr. Trump became president so that everything was done properly,” Weisselberg said. “When Mr. Trump became president and everybody was looking at our company at every different angle,” Weisselberg continued by saying they pored over “all the practices we’d been utilizing over the years and … we corrected everything we had to correct.”

Weisselberg took the stand under a plea deal with prosecutors. Though it’s not a cooperation agreement, Weisselberg was required to “testify truthfully” if called to take the stand. If Weisselberg did so, he would receive a five-month jail sentence and five years probation. Weisselberg won’t learn his sentence until the trial wraps, to “ensure compliance.” Merchan has warned that failure to comply could result in far more time behind bars.

Although Trump himself was not tried, prosecutors directly tied him to illegal financial activity during their second day of closing. Assistant District Attorney Joshua Steinglass pointed jurors to a 2012 document signed by Trump himself, where he okayed a $72,000 salary cut for Trump Organization chief operating officer Matthew Calamari. While this was a reduction in pay, Calamari wound up receiving plum benefits instead which, prosecutors insist, should have been taxed.

Prosecutors contended throughout trial that Trump and his businesses knew full well that Calamari, Weisselberg, and comptroller Jeffrey McConney were participating in practices to provide untaxed income for execs through benefits.

The attorneys repping Trump’s businesses have insisted that these companies did nothing wrong—and that it was all Weisselberg acting for himself

“Mr. Weisselberg dedicated his life to the Trump family … to Fred, to Don, to Don Jr. He helped grow the Trump Organization into the company it is today,” defense attorney Susan Necheles told jurors during closing arguments. “But along the way, he messed up, he got greedy — and once he started, it was difficult for him to stop.”

“Mr. Weisselberg admitted that during this long scheme, no member of the Trump family knew about his ongoing efforts to evade taxes. He was ashamed of what he was doing: You saw him on the witness stand, almost crying,” Necheles argued. “He knew he was doing something wrong and he was ashamed of it, and he kept it secret. When his wrongdoing came to light, the Trump family did not fire him, they did not kick him to the curb after nearly 40 years. How do you fire a member of your own family?” Necheles said. However, “Mr. Weisselberg broke the law … Mr. Weisselberg is paying for his own wrongdoing.”

Necheles also emphasized that Weisselberg didn’t provide any testimony that directly implicated the corporations in illegal activity. “He’s atoning for his sins, but as part of the plea deal, the prosecution forced him to testify against the company he helped to build. Now the prosecution’s case rests on one thing: trying to convince you, the jurors, that Mr. Weisselberg’s actions were done in behalf of the company.” Necheles insisted “they were done solely to benefit himself — and that is the critical issue in this case.”

Trump was not pleased with the verdict on Tuesday, releasing a lengthy statement calling the verdict the “continuation of the Greatest Political Witch Hunt in the History of our Country,” adding that “New York City is a hard place to be ‘Trump,’ as businesses and people flee our once Great City!”

Manhattan District Attorney Alvin Bragg was pleased with the verdict on Tuesday. “This was a case about greed and cheating. In Manhattan, no corporation is above the law,” he said in a statement. “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. Today’s verdict holds these Trump companies accountable for their long-running criminal scheme, in addition to Chief Financial Officer Allen Weisselberg, who has pled guilty, testified at trial and will now be sentenced to serve time in jail.”

Sentencing is expected to take place on Jan. 13.

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