(Trends Wide) — A jury found two Trump Organization companies guilty of multiple counts of tax fraud and falsifying business records related to a 15-year scheme to defraud tax authorities by failing to report and pay taxes on the compensation of senior citizens. executives.
Trump Corp. and Trump Payroll Corp. were found guilty of all charges they faced.
Donald Trump and his family were not charged in this case. However, prosecutors repeatedly mentioned during the trial the former president’s connection to benefits granted to certain executives, including company-financed apartments, car leases and personal expenses.
The guilty verdict comes as Trump faces scrutiny from federal and state prosecutors over his handling of classified documents, the effort to overturn the 2020 election results and the accuracy of the Trump Organization’s business records and financial statements. He also faces a $250 million civil lawsuit from the New York attorney general accusing him and his adult children of being involved in a decade-long fraud. The attorney general seeks to permanently bar them from serving as officers or directors of a company in the state of New York, among other sanctions.
Prosecutor Joshua Steinglass told jurors in closing arguments that Trump “explicitly sanctioned” the tax fraud and urged them to reject the defense’s argument that former Trump Organization CFO Allen Weisselberg was a rogue employee motivated by his own personal greed.
“This whole narrative that Donald Trump is blissfully ignorant is just not true,” Steinglass said.
The jury heard that Trump agreed on a whim to pay Weisselberg’s grandchildren’s private school tuition and signed a lease on a Manhattan apartment to shorten the executive’s travel. Trump personally signed his employees’ Christmas bonus checks and put his initials on a memo in which he reduced the pay of other top executives, which prosecutors say suggested he knew all along about the fraudulent scheme.
Prosecutors alleged that for years top executives reduced their reported salaries by the amount of fringe benefits issued by the company to avoid paying required taxes.
The week-long post-trial sentence is a victory for the Manhattan district attorney’s office led by Alvin Bragg, which based its case on the Trump Corporation’s general ledger, tax records and Weisselberg’s testimony.
Weisselberg, who is on paid leave from the company, spent three days on the witness stand. He pleaded guilty to 15 felonies for failing to pay taxes on $1.76 million in income. As part of his plea agreement, he will be sentenced to five months in prison if the judge determines that he testified truthfully.
In his testimony, Weisselberg admitted that he should have paid taxes on the compensation, totaling approximately $200,000 in one year, which included a luxury Manhattan apartment overlooking the Hudson River, two Mercedes Benz cars, parking, utilities , furniture and private school tuition for her grandchildren. He also testified that he paid himself and other executives as if they were independent consultants, which allowed Trump’s companies to evade paying taxes.
Weisselberg testified that he pulled off the scheme with the help of his subordinate, Trump Organization controller Jeffrey McConney. McConney, who was granted immunity for testifying before the grand jury, admitted to some of the illegal conduct in his testimony.
After Trump was elected president, Weisselberg testified, there was a “cleanup” and many of the illegal practices stopped.
He disclosed conversations he had with Trump, Eric Trump and Donald Trump Jr., but told jurors when questioned by Trump’s lawyers that he did not plot or conspire with anyone in the Trump family.
Weisselberg became emotional at times, telling jurors that he was “embarrassed” by his conduct and that he “betrayed” the Trump family, who has been his employer for 49 years.
Prosecutors and defense attorneys denounced Weisselberg’s divided loyalties: wanting to live up to his plea deal and serve a lower jail sentence and his loyalty to the Trump family, which could pay him $1 million in compensation this year.
To prove the company’s guilt, prosecutors had to show that Weisselberg or McConney was a “senior management agent” who committed the crimes in the scope of their employment and “on behalf of” the company.
Prosecutors and defense attorneys argued in circles about what “on behalf of” meant.
Judge Juan Merchan also wrestled over how to explain the phrase to the jury, turning to two legal treatises to create a definition.
The judge explained this to the jury and said: “Under the definition of ‘in the name of,’ it is not necessary that the criminal acts actually benefit the corporation. But the acts of an agent are not “on behalf of” a corporation if they were carried out solely to further the agents’ own interest. Put another way, if the agent’s acts were taken simply for personal gain, they were not ‘on behalf of’ the corporation.”
Weisselberg walked a fine line in his testimony, telling the jury that he never wanted to hurt the company, that he was driven by greed and primarily wanted to pay less in taxes. But, he also said, he knew at the time that the company would benefit to some extent from his schemes.
In his testimony, Weisselberg said, “It was a benefit to the company, but mostly it was due to my greed.” He told jurors that the company saved money by paying less tax on its off-book compensation and acknowledged when asked by prosecutor Susan Hoffinger whether, while his primary goal was to avoid tax, he also created a benefit for the company.
“To some extent, yes,” Weisselberg testified.
Weisselberg said he and McConney knew at the time that the company would pay less payroll tax through the scheme, though he said they never explicitly discussed it.
Trump’s lawyers repeatedly argued before the jury that “Weisselberg did it for Weisselberg” to emphasize that he was motivated solely by personal greed.
On cross-examination, Weisselberg agreed that the decision not to pay taxes was his and made solely for his own benefit.
“That was my intent,” Weisselberg said when asked by Trump’s lawyers, “to benefit myself.”
Lawyers for the Trump entities called only one fact witness, longtime real estate accountant Donald Bender of Mazars USA, who dropped Trump as a client earlier this year.
Trump’s lawyers said Bender knew about the off-the-record kickoff or should have discovered the tax fraud and accused him of lying on the stand.
When questioned by prosecutors, Bender testified that he trusted and depended on Weisselberg, who testified that he covered up the illegal plan.
Steinglass, the prosecutor, told the jury that Trump’s companies were guilty, and that the illegal scheme was concocted “so that employees can get a higher take-home pay while costing Trump Corporation less. It’s a win-win situation, unless it’s the tax authorities.”
This story has been updated with additional details.
