Trump Organisation convicted in executive tax dodge scheme
Prosecutors allege former president ‘knew exactly what was going on’
Donald Trump’s company was convicted of tax fraud yesterday in a case brought by the Manhattan District Attorney, a significant repudiation of financial practices at the former president’s business.
A jury found two corporate entities at the Trump Organisation guilty on all 17 counts, including conspiracy charges and falsifying business records.
The verdict came on the second day of deliberations following a trial in which the Organisation was accused of being complicit in a scheme by top executives to avoid paying personal income taxes on job perks such as rent-free apartments and luxury cars.
The conviction is a validation for New York prosecutors, who have spent three years investigating the former president and his businesses, though the penalties aren’t expected to be severe enough to jeopardise the future of Trump’s company.
As punishment, the Trump Organisation could be fined up to US$1.6 million ($2.5m) — a relatively small amount for a company of its size, though the conviction might make some of its future deals more complicated.
Trump, who recently announced he was running for the office of president again, has claimed the case against his company was part of a politically motivated “witch hunt” waged against him by vindictive Democrats.
Trump himself was not on trial but prosecutors alleged he “knew exactly what was going on” with the scheme, though he and the company’s lawyers have denied that.
The case against the company was built largely around testimony from the Trump Organisation’s former finance chief, Allen Weisselberg, who previously pleaded guilty to charges that he manipulated the company’s books and his own compensation package to illegally reduce his taxes. Weisselberg testified in exchange for a promised five-month jail sentence.
To convict the Organisation, prosecutors had to convince jurors that Weisselberg or his subordinate, senior vice president and controller Jeffrey Mcconney, were “high managerial” agents acting on the company’s
behalf and that the company also benefited from his scheme.
Trump Organisation lawyers contended Weisselberg had gone rogue and betrayed the company’s trust. No one in the Trump family or the company was to blame, they argued.
Though he testified as a prosecution witness, Weisselberg also attempted to take responsibility, saying nobody in the Trump family knew what he was doing.
“It was my own personal greed that led to this,” an emotional Weisselberg testified. Weisselberg, who pleaded guilty to dodging taxes on US$1.7M in fringe benefits, testified that he and Mcconney conspired to hide that extra compensation from his income by deducting their cost from his pretax salary and issuing falsified forms.
During his closing argument, prosecutor Joshua Steinglass attempted to refute the claim that Trump knew nothing about the scheme.
He showed jurors a lease Trump signed for Weisselberg’s companypaid apartment and a memo Trump initialled authorising a pay cut for another executive who got perks.
“Mr Trump is explicitly sanctioning tax fraud,” Steinglass argued.
The verdict doesn’t end Trump’s battle with Manhattan District Attorney Alvin Bragg, a Democrat who took office in January.
Bragg has said that a related investigation of Trump that began under his predecessor, District Attorney Cyrus Vance Jr, is “active and ongoing”.
In that wide-ranging probe, investigators have examined whether Trump misled banks and others about the value of his real estate holdings, golf courses and other assets — allegations at the heart of New York Attorney General Letitia James’ pending lawsuit against the former president and his company.
The district attorney’s office has also investigated whether any state laws were broken when Trump’s allies made payments to two women who claimed to have had sexual affairs with the Republican years ago.
—AP