Trump Organization guilty on all counts in criminal tax scheme | Courthouse News Service
Thursday, November 30, 2023
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Trump Organization guilty on all counts in criminal tax scheme

Jurors rejected defense arguments that sought to pin the blame for untaxed executive perks on the employees themselves.

MANHATTAN (CN) — A monthlong criminal tax fraud trial for the Trump Organization ended Tuesday in swift guilty verdicts.

Jurors began deliberations Monday and sided with the government after just 10 hours, entering convictions on all 17 counts.

In what has been the only proceeding to arise from a three-year probe of former President Donald Trump and his business practices, the verdict marks a resounding victory. Earlier this year, the resignations of top prosecutors in the district attorney's office had brought the strength of their criminal probe into doubt.

“This was a case about greed and cheating. In Manhattan, no corporation is above the law,” Manhattan District Attorney Alvin Bragg said in a statement Tuesday afternoon. “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."

New York Supreme Court Justice Juan Merchan set a sentencing date of Jan. 13, 2023, for Trump Payroll and Trump Corp., two corporate entities that exist under the same umbrella Trump uses to manage his golf courses, hotels and other ventures. Compared with the hundreds of millions of dollars in revenue that Trump netted in just the four years of his presidency, the financial stakes of Tuesday's verdict is negligible. The companies at most could face a fine of $1.62 million.

But as Trump campaigns to regain the White House in 2024 — an increasingly quixotic venture that has turned off powerful forces in the right wing — the sting of the judgment could have broader implications.

Several jurors leaving the courthouse this afternoon declined to comment to reporters.

In an initial statement Tuesday, the Trump Organization continued to push blame for the scheme on Allen Weisselberg, its loyal chief financial officer who remains on the Trump family payroll even after pleading guilty to related charges.

"Mr. Weisselberg testified under oath that he 'betrayed' the trust the company had placed in him and that he, at all times, acted 'solely' for his 'own personal gain' and out of his 'own personal greed,'" a spokesperson said. "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."

Manhattan District Attorney Alvin Bragg, center of back row, speaks to reporters on Dec. 6, 2022, after a New York jury convicted two Trump Organization subsidiaries on all counts in connection with an executive-compensation scheme. (Josh Russell/Courthouse News Service)

District Attorney Bragg went after Weisselberg and the Trump Organization in July 2021, and it required Weisselberg to testify as part of his plea deal. He told jurors last month that his receipt of $1.7 million in off-the-books compensation brought "some benefit to the company but primarily it was, you know, my greed.”  

During the course of the trial, prosecutors detailed a scheme by which the defendants worked from 2005 through 2021 to indirectly compensate Weisselberg and other high-ranking executives by disguising large portions of their salaries as luxury cars and apartments — perks that the executives also concealed from tax authorities.

Weisselberg is looking at five months behind bars in recognition of his cooperation and truthful testimony at trial, but no date for his sentencing has been set. On leave from his CFO role meanwhile, the 75-year-old expects to make the same $1.14 million annual salary plus a bonus as when he formally held the title. 

Trump Corporation attorney Susan Necheles said she disagreed with the outcome of the trial and promised to appeal.

"Why would a corporation whose owner knew nothing about Weisselberg's personal tax returns be criminally prosecuted for Allen Weisselberg's personal conduct, for which they had no visibility or oversight? This case was unprecedented and legally incorrect," Necheles said in a statement Tuesday afternoon.

Alan Futerfas, the lawyer for Trump Payroll Corporation, also affirmed the plan to appeal, particularly focusing on what he called the "vague" language of New York state law that allowed jurors to find the company guilty if its executives carried out criminal acts “in behalf of” the corporation.

“It was central to the case,” Futerfas told reporters outside of the courthouse.

Trump Payroll Corporation attorney Alan Futerfas announces plans to appeal after a jury convicted his client of criminal tax fraud on Dec. 6, 2022. (Josh Russell/Courthouse News Service)

Trump himself was not charged in the case, yet his name tended to dominate. Prosecutors told jurors in summations last week that the former president was “explicitly sanctioning tax fraud” when he authorized salary reductions for top executives.

New York Attorney General Letitia James, whose own office filed a sprawling $250 million civil action against Trump and his business entities in September, commended the guilty verdicts.

“We can have no tolerance for individuals or organizations that violate our laws to line their pockets," she wrote. "This verdict sends a clear message that no one, and no organization, is above our laws.”

On Monday, the Manhattan District Attorney's Office announced the appointment of Matthew Colangelo — a Department of Justice veteran who also worked on the attorney general's civil Trump case —  as new senior counsel to Bragg.

Prosecutors argued that the companies are liable because Weisselberg and the controller at Trump Corp., Jeffrey McConney, were “high-managerial” agents entrusted to act on behalf of the company and its various entities.

“The scheme was intended to allow certain employees to substantially understate their compensation from the Trump Organization, so that they could and did pay federal, state, and local taxes in amounts that were significantly less than the amounts that should have been paid,” the indictment alleged.

Prosecutors treated McConney as a hostile witness after he walked back earlier testimony in the trial that implicated the former president with knowledge of the scheme. McConney's legal fees are being covered by the Trumps per his contract.

Trump has denied knowing that Weisselberg and other executives were dodging taxes, writing on his Truth Social platform last week: “There was no gain for ‘Trump,’ and we had no knowledge of it.”

Michael Cohen, the former personal lawyer to Trump, questioned Tuesday when the other shoe will drop.

“Despite the quick and the accurate determination by the jury convicting the Trump Organization on all counts, once again the man behind all the decisions and actions at the company escapes culpability,” Cohen told Courthouse News Service.

Trump was still in office when his erstwhile confidante pleaded guilty to tax crimes, lying to Congress and campaign finance violations — some of which involved his role in facilitating payments to two women to keep them from talking about alleged affairs with Trump.  

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Categories / Business, Criminal, Employment, Trials

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