Trump organization fined $1.6 million for long-running tax fraud scheme

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The Trump Organization was fined $1.6 million on Friday when a New York judge convicted it of running a 15-year-old tax fraud scheme that prosecutors said the company’s top executives orchestrated out of sheer greed.

Trump Corp.

Prosecutor Joshua Steinglass urged Manhattan Supreme Court Justice Juan Merchan to fine each company to the maximum extent permitted by law.

“The magnitude of the fraud calls for the maximum possible fine for falsifying business records and helping senior managers evade taxes while defrauding the tax authorities. The crimes were deep, broad and long, spanning decades,” Steinglass said. “The conduct can only be described as flagrant.”

The judge agreed, fining Trump Corp. $810,000 and the Trump Payroll $800,000.

Manhattan District Attorney Alvin Bragg welcomed the ruling in a statement.

“While companies cannot serve a prison sentence, this conviction and sentence serves as a reminder to companies and executives that you cannot defraud the tax authorities and get away with it,” said Bragg.

The only person charged in the scheme was the company’s former chief financial officer, Allen Weisselberg.

Weisselberg, 75, pleaded guilty in August and became the prosecution’s star witness during the week-long trial, in which he described how high-ranking officials and the company had evaded taxes.

Weisselberg was also the biggest personal beneficiary of the scheme, prosecutors said. He collected $1.76 million in “indirect employee compensation,” including a rent-free apartment, expensive cars, private school tuition for his grandchildren, and new furniture. Other executives received similar perks and bonuses paid as independent contractors, saving the company money in payroll taxes, Weisselberg testified.

Weisselberg was sentenced this week to five months in prison on Rikers Island. He could have faced up to 15 years in prison had he been convicted at trial.

Weisselberg and the company were first charged in June 2021, following a year-long investigation into the company’s business practices by the Manhattan District Attorney’s Office and the state’s attorney general.

At trial, company lawyers painted Weisselberg as the only bad actor and maintained that other executives, as well as Trump, did not know what he was doing.

“This case was about Allen Weisselberg committing tax fraud on his personal tax returns. Each witness testified repeatedly that President Trump and the Trump family knew nothing about Allen Weisselberg’s actions,” Trump’s attorney Susan Necheles said after the verdict.

In a statement following the sentencing, a Trump Organization spokesman said Weisselberg is “a victim. He has been threatened, intimidated and terrorized” into cooperating with prosecutors.

“President Trump and the Trump Organization are also victims,” ​​the statement continued, because “these politically motivated prosecutors will stop at nothing to get President Trump.”

“We have done nothing wrong and we will appeal this verdict.”

The $1.6 million in fines the district attorney sought is the maximum allowed under applicable statutes in the case. Bragg said after sentencing that that maximum is not enough, adding that “our state law must change so that we can impose more significant penalties and sanctions on companies that commit crimes in New York.”

Experts said the biggest problem for the company than the fine is the conviction, because it could affect the ability of the Trump Organization to obtain bank loans.

In brief comments to reporters after the sentencing, Bragg hinted that there may be more to come. He said the ruling “closes this important chapter in our ongoing investigation into the former president and his dealings. We now move on to the next chapter.”

The Trump Organization faces other legal problems in the state. State Attorney General Letitia James filed a $250 million civil lawsuit, alleging the company was inflating its financial statement value to banks and insurance companies by billions of dollars.

The judge overseeing the case issued an order barring the company from transferring assets without court approval and appointed an independent monitor to oversee the company’s financial statements.

Trump has repeatedly complained that the actions of the district attorney and attorney general are part of the “witch hunt” against him.

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