July 23, 2024
Home » Ex-president Trump’s company fined $1.6M for tax fraud

Ex-president Trump’s company fined $1.6M for tax fraud


Former President Donald Trump’s company was fined $1.6 million Friday for a scheme in which top executives dodged personal income taxes on lavish job perks — a symbolic, hardly crippling blow for an enterprise boasting billions of dollars in assets.

A fine was the only penalty a judge could impose on the Trump Organization after its conviction last month for 17 tax crimes, including conspiracy and falsifying business records. The amount was the maximum allowed by law. Judge Juan Manuel Merchan gave the company 14 days to pay. A person convicted of the same crimes would’ve faced years in prison.

Trump himself was not on trial and denied any knowledge that a small group of executives were evading taxes on extras including rent-free apartments, luxury cars and private school tuition. Prosecutors said such items were part of what they dubbed the Trump Organization’s “deluxe executive compensation package.”

The company denied wrongdoing and said it would appeal.

“These politically motivated prosecutors will stop at nothing to get President Trump.”

“These politically motivated prosecutors will stop at nothing to get President Trump and continue the never ending witch-hunt which began the day he announced his presidency,” the company said in a statement after the fine was announced.

Neither the former president nor his children, who helped run the Trump Organization, were in the courtroom.

Trump Organization convicted in tax dodge scheme
A Manhattan jury found Donald Trump’s company guilty of tax fraud for a scheme by top executives to avoid paying personal income taxes on apartments, luxury cars, and other perks.

While the fines — less than the cost of a Trump Tower apartment — aren’t big enough to impact the company’s operations or future, the conviction is a black mark on the Republican’s reputation as a savvy businessman as he mounts a campaign to regain the White House.

“Our laws in this state need to change in order to capture this type of decade-plus systemic and egregious fraud.”

Outside the courtroom, Manhattan District Attorney Alvin Bragg, a Democrat, said he wished the law had allowed for a more serious penalty.

“I want to be very clear: we don’t think that is enough,” he said. “Our laws in this state need to change in order to capture this type of decade-plus systemic and egregious fraud.”

Besides the company, only one executive was charged in the case: former Trump Organization Chief Financial Officer Allen Weisselberg, who pleaded guilty last summer to evading taxes on $1.7 million in compensation. He was sentenced Tuesday to five months in jail.

The criminal case involved financial practices and pay arrangements that the company halted when Trump was elected president in 2016.

Over his years as the company’s chief moneyman, Weisselberg received a rent-free apartment in a Trump-branded building in Manhattan with a view of the Hudson River. He and his wife drove Mercedes-Benz cars, leased by company. When his grandchildren went to an exclusive private school, Trump paid their tuition. A handful of other executives received similar perks.

When called to testify against the Trump Organization at trial, Weisselberg said that he didn’t pay taxes on that compensation, and that he and a company vice president conspired to hide the perks by having the company issue falsified W-2 forms.

Assistant District Attorney Joshua Steinglass told jurors Trump had a role, showing them a lease that the Republican signed himself for Weisselberg’s apartment.

“Mr. Trump is explicitly sanctioning tax fraud,” Steinglass argued.

Weisselberg also attempted to take responsibility on the witness stand, saying nobody in the Trump family knew what he was doing. He choked up as he told jurors, “It was my own personal greed that led to this.”

Trump executive Allen Weisselberg gets 5-month jail sentence

Former Trump Organization chief financial officer Allen Weisselberg has been sentenced to five months in jail for dodging taxes. A judge imposed the punishment Tuesday at a court hearing in New York City. The longtime executive for Donald Trump’s family company has also paid $2 million in taxes, penalties and interest. Weisselberg was promised the five-month sentence in August when he agreed to plead guilty to 15 tax crimes. He later testified against the company where he has worked since the mid-1980s. The Trump Organization was convicted last month of helping executives, including Weisselberg, dodge taxes.

At the trial, Trump Organization lawyers repeated the mantra, “Weisselberg did it for Weisselberg.” In its statement Friday, the company took a different tone.

“Allen Weisselberg is a victim,” it said. “He was threatened, intimidated and terrorized. He was given a choice of pleading guilty and serving 90 days in prison or serving the rest of his life in jail — all of this over a corporate car and standard employee benefits.”

A jury convicted the company of tax fraud on Dec. 6.

The Trump Organization was charged through two corporate entities: The Trump Corporation, which was fined $810,000; and Trump Payroll Corporation, which was fined $800,000.

Those fines “constitute a fraction of the revenue” generated by Trump’s real estate empire, Steinglass said in court. It could face more trouble outside of court from reputational damage, such as difficulty finding new deals and business partners.

“We all know that these corporations won’t go to jail, as Allen Weisselberg has,” Steinglass said. “The only way to deter such conduct is to make it as expensive as possible.”

The Trump Organization’s sentencing doesn’t end Trump’s battle with Bragg, who said the sentencing “closes this important chapter of our ongoing investigation into the former president and his businesses. We now move onto the next chapter.”

Bragg, in office for little more than a year, inherited the Trump Organization case and the investigation into the former president from his predecessor, Cyrus Vance Jr.

At the same time, New York Attorney General Letitia James is suing Trump and the Trump Organization, alleging they misled banks and others about the value of its many assets, including golf courses and skyscrapers — a practice she dubbed the “art of the steal.”

James, a Democrat, is asking a court to ban Trump and his three eldest children from running any New York-based company and is seeking to fine them at least $250 million. A judge has set an October trial date and appointed a monitor for the company while the case is pending.

Trump faces several other legal challenges as he ramps up his presidential campaign.

A special grand jury in Atlanta has investigated whether Trump and his allies committed any crimes while trying to overturn his 2020 election loss in Georgia.

Last month, the House Jan. 6 committee voted to make a criminal referral to the Justice Department for Trump’s role in sparking the violent insurrection at the U.S. Capitol. The FBI is also investigating Trump’s storage of classified documents.

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