Trump Organization found guilty of tax fraud scheme

NEW YORK, Dec. 6 (Reuters) – Donald Trump’s real estate company was convicted on Tuesday of carrying out a 15-year criminal scheme to defraud tax authorities, adding to the legal troubles the former US president faces while he is campaigning for the office again in 2024.

The Trump Organization — which operates hotels, golf courses and other real estate around the world — was found guilty of paying top executives personal expenses, including former CFO Allen Weisselberg, and issuing bonus checks as if they were independent contractors.

The company faces fines of up to $1.6 million after being convicted of all charges, including plotting to defraud tax authorities, conspiracy and falsifying company records. Trump was not charged in the case.

Judge Juan Merchan, who presided over the trial in New York state court, set a sentencing date for January 13.

While the fine is not expected to be material for a company the size of the Trump Organization, the conviction could complicate its ability to conduct business.

Weisselberg, 75, testified as a key government witness as part of a plea deal calling for a five-month prison sentence.

Manhattan District Attorney Alvin Bragg, whose office was prosecuting the case, called the verdict “very just.”

“The former president’s companies are now convicted of crimes,” Bragg said after the New York courthouse ruling, speaking of the Trump Corporation and Trump Payroll Corporation, the two Trump Organization entities that were convicted.

When asked if he regretted not suing Trump in the case, Bragg did not answer.

He has said the agency’s investigation into Trump continues.

APPEAL

Alan Futerfas, a lawyer for the Trump Organization, said the company would appeal and that corporate liability criminal law was vague.

“It was central to the case,” he told reporters after the verdict.

The jury deliberated for about 12 hours over two days.

The case centered on allegations that the company paid personal expenses, such as free rent and car leases, to executives, including Weisselberg, without reporting income, and gave them bonuses as non-employee benefits from other Trump entities such as the Mar-a-lago. Club, without tax deductions.

According to testimony during the four-week trial, Trump himself signed the annual bonus checks, paid for private school tuition for Weisselberg’s grandchildren, approved the lease on his luxury Manhattan apartment, and approved a payroll deduction for another executive.

“The whole story that Donald Trump was blissfully ignorant just isn’t real,” prosecutor Joshua Steinglass told jurors on Friday during his closing argument.

He said the “smorgasbord of benefits” is designed to keep top executives “happy and loyal”.

Republican Trump, who announced his third campaign for president on Nov. 15, said in a statement that he was “disappointed” by the verdict but called the case a “Manhattan witch hunt.” Both Bragg and his predecessor who filed the suit, Cyrus Vance, are Democrats.

SEPARATE COURT

The Trump Organization is separately facing a fraud case brought by New York State Attorney General Letitia James.

Trump himself is under investigation by the US Justice Department for his handling of sensitive government documents after he left office in January 2021 and attempts to overturn the November 2020 election he lost to Democrat Joe Biden.

Trump Organization lawyers argued that Weisselberg carried out the plan to benefit himself, not for the company. They tried to portray him as a rogue employee. Weisselberg is currently on paid leave and testified that he hopes to receive another $500,000 bonus in January

Trump wrote on his Truth Social platform on Nov. 19 that his family “reaped no economic benefit from the acts of the executive branch.”

Weisselberg, who pleaded guilty in August to concealing $1.76 million in revenue from the IRS, testified that while Trump signed the checks involved, he did not conspire with him.

He said the company saved money by paying his rent, utilities, Mercedes-Benz car lease for him and his wife and other personal expenses instead of increasing his salary because a pay rise would have to account for taxes.

He said Trump’s two sons – who took over the company’s operations in 2017 – gave him a raise after learning of his tax avoidance scheme.

By then, Trump was president and the company was preparing for more scrutiny.

“We went through a whole corporate cleanup process to make sure that since Mr. Trump is now president, everything was done right,” Weisselberg testified.

Reportage by Luc Cohen and Karen Freifeld in New York; additional reporting by Andrew Hofstetter in New York; Edited by Noeleen Walder and Grant McCool

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