The Trump Organization was found guilty on all counts of criminal tax fraud



CNN

A Manhattan Jury Two Trump Organization companies have been found guilty of multiple counts of criminal tax fraud and falsifying business records in connection with a 15-year scheme to defraud tax authorities by failing to pay taxes on the compensation of top executives.

The Trump Corporation and the Trump Payroll Corporation were found guilty of all charges they faced.

Donald Trump and his family have not been charged in the case, but were repeatedly cited by prosecutors during the trial for benefits provided to certain executives, including the former president, company-financed apartments, car leases and personal expenses.

The Trump Organization could face a maximum fine of $1.61 million when sentenced in mid-January. There is no risk of liquidation of the company because there is no mechanism for liquidating the company under New York law. However, a criminal conviction could affect its business or its ability to obtain loans or contracts.

The guilty verdict comes as Trump is under scrutiny by federal and state prosecutors for his handling of classified documents, an attempt to sway the 2020 election results and the accuracy of the Trump Organization’s business records and financial statements. He faces a $250 million civil suit from the New York Attorney General. The Attorney General seeks to permanently bar them from serving as an officer or director of a corporation in New York State.

The Trump Organization. Prosecutors said they plan to appeal.

“This is a case of greed and deception,” Manhattan District Attorney Alvin Bragg said. “The Trump Corporation and the Trump Payroll Group got away with a scheme that provided lavish perks and compensation to top executives, while deliberately hiding the benefits from taxing authorities to avoid paying taxes. Today’s ruling calls for accountability for the Trump Organization’s long-running criminal scheme.

CNN senior legal analyst and former federal prosecutor Elie Honig said Bragg’s approach has been vindicated.

“Obviously, it’s a setback for the Trump Organization. – A huge setback for the Trump Organization. They’ve now been found guilty of criminal conduct, criminal tax fraud,” Honig told CNN’s Victor Blackwell on “Newsroom.”

“It’s kind of a win for the Manhattan district attorney,” Honig said. “Their theory, now, is that part of the income for employees, including Alan Weiselberg, was paid through fringe benefits to avoid tax liability — and that theory has been proven.”

Hear what the jurors in the Trump Organization are up to. The investigation said about Trump

Prosecutor Joshua Steinglass, in closing arguments, told the jury that Trump “clearly condoned” the tax fraud and urged them to reject the defense argument. Alan Weiselberg, the former chief financial officer of the Trump Organization A rogue employee motivated by his own greed.

“This whole narrative that Donald Trump is blissfully ignorant is not true,” Steinglass said.

The jury heard that Trump agreed to pay private school tuition for his Weiselberg grandchildren and signed a lease on a Manhattan apartment to reduce the executive’s travel. Trump personally signed his staffers’ bonus checks in time for Christmas, and he initiated a memo to cut the salaries of another top official, suggesting he knew about the fraud scheme, prosecutors said.

Prosecutors alleged that top executives over the years reduced their reported salaries by the amount of company-provided fringe benefits to avoid paying required taxes.

Weiselberg, who is on paid leave from the company, spent three days on the witness stand. He pleaded guilty to 15 counts of failing to pay taxes on $1.76 million in income. As part of his plea deal, he will be sentenced to five months in prison if the judge finds that he testified truthfully.

The Trump Organization. Prosecutor Susan Nessels vowed to appeal, placing all blame on Weiselberg for any wrongdoing.

“Why is a company that knows nothing about Weiselberg’s personal tax returns being criminally investigated for Alan Weiselberg’s personal conduct? This case is unprecedented and legally wrong,” Nechels said in a statement. “We will appeal this ruling.”

In his testimony, Weiselberg admitted to paying taxes on compensation totaling $200,000 a year, which included a luxury Manhattan apartment overlooking the Hudson River, two Mercedes Benz car leases, parking, utilities, furniture and private school tuition for his grandchildren. He also testified that he paid bonuses to himself and other executives as if they were independent consultants to avoid paying taxes on Trump companies.

Weiselberg testified that he stopped the program with the help of his underling, Trump Organization comptroller Jeffrey McConey. McConey, who was exempt from testifying before the grand jury, admitted to some illegal conduct in his testimony.

After Trump was elected president, Weiselberg testified, there was a “clean-up” and many illegal practices stopped.

She disclosed conversations she had with Trump, Eric Trump and Donald Trump Jr., but when questioned by Trump’s lawyers, told the judge she did not collude or conspire with anyone in the Trump family.

Weiselberg became emotional at times, telling the jury she was “disgusted” by her behavior and “betrayed” by the Trump family, her employer for 49 years.

Prosecutors and defense attorneys have called Weiselberg’s divided loyalties — his desire to live up to his plea, a reduced prison sentence and his loyalty to the Trump family, which could pay him $1 million in restitution this year.

To prove the company’s guilt, prosecutors must prove that Weiselberg or McCany was a “high-level executive agent” who committed the crimes in the scope of his employment and “on behalf” of the company.

Prosecutors and defense attorneys argued over what “on behalf of” meant.

Judge Juan Mercon also struggled with how to explain the phrase to the jury and turned to two legal treaties to craft a definition.

The judge explained it to the jury, “Under the definition of ‘on behalf of,’ the criminal acts need not actually benefit the corporation. But an agent’s actions solely to advance the agents’ own interests are not ‘on behalf of’ a corporation. In other words, if the agent’s actions were taken solely for personal gain, they Not ‘on behalf’ of the Corporation.

Alan Fuderfass, a lawyer for the Trump payroll committee, told reporters that the ruling was wrong.

“A novel and very interesting issue arose during the trial. Obviously, the definition of ‘on behalf of’ — what that means. We filed a lot of documents, the defense team, about what those words mean,” Futterfass said. Granted, that will certainly be one of the arguments we make.”

Weiselberg walked a fine line in his testimony, saying he never wanted to hurt the company, he was motivated by greed and mainly wanted to pay less in taxes. But he added that he knew then that the company would benefit to some degree from his plans.

In his testimony, Weiselberg said, “It was a benefit to the company, but primarily because of my greed.” He admitted that the company saved money by paying less tax on his off-the-books compensation, and even though his primary goal was to avoid taxes, he admitted when asked by attorney Susan Haffinger whether that would benefit the company.

“To an extent, yes,” Weiselberg testified.

Weiselberg said he and McCone knew the company would pay less payroll taxes through the plan, though he said they did not discuss it openly.

Trump lawyers repeatedly argued to the jury that “Weiselberg did it for Weiselberg” to emphasize that he was motivated only by his personal greed.

On cross-examination, Weiselberg admitted that the decision not to pay the tax was his own and that he made it only to benefit himself.

“That was my intention,” Weiselberg said when questioned by Trump lawyers, “to benefit myself.”

Attorneys for the Trump Organizations called Donald Bender, the real estate firm’s longtime accountant, as a fact witness. Mazars AmericaIt dropped Trump as a client earlier this year.

Trump lawyers said Bender must have known about the off-the-book compensation or caught the tax fraud, and they accused him of lying on the stand.

Bender testified when questioned by prosecutors that he trusted and trusted Weiselberg, who testified that he covered up the illegal scheme.

Attorney Steinglass told the jury that the Trump companies were guilty and that the illegal scheme was enacted “so employees can get higher net pay while it costs the Trump Corporation less. It’s a win-win — unless you’re the tax authorities.”

This story has been updated with additional details.

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