Trump Organization: What could happen if it is indicted

Serious “collateral consequences” may ruin his company

For decades, going into business with Donald Trump was considered a risky proposition despite his celebrity. He earned a reputation for stiffing contractors and biting off more than he could chew. Eventually, banks started asking Trump to personally guarantee their loans.

Now, working with the Trump Organization could become even more fraught. Already marginalized in the corporate world, the former president’s namesake company could soon face an indictment from New York prosecutors. The Wall Street Journal reported the Manhattan district attorney is expected to file charges against the company and its longtime accountant, Allen Weisselberg, on Thursday.

The investigation involves potential tax violations related to unreported compensation, according to a source with knowledge of the case. A spokesman for Manhattan District Attorney Cy

Vance Jr., declined to comment.

However, that could be only the beginning of the company’s problems. The New York state attorney general, which has been conducting a civil inquiry into whether the company improperly inflated or deflated the value of its properties, is also working with the district attorney’s office on the ongoing criminal case.

The cases might sound like small potatoes after years in which Trump faced a special counsel investigation and two subsequent impeachments.

But an indictment by a grand jury, legal experts said, would cloud Trump’s financial future, and could potentially cripple his company.

Under New York state law, a corporation convicted of the financial charges being mulled in the Trump Organization case would face at most a $10,000 per count penalty and an order to pay restitution.

Legal and business experts said the Trump Organization is likely to face serious “collateral consequences” that could ruin the company. That’s because other businesses, banks and municipalities are leery from engaging with entities accused of such offenses. Banks, in particular, are hesitant to lend money to those facing such accusations, legal and business experts said, because there is a strong chance they will never recover their money.

“The Trump Organization, if indicted, could find itself without a place to put its assets and without a source of capital,” said Daniel Horwitz, a defense attorney who is a former Manhattan prosecutor.

“If you are a bank, are you going to lend money to a company accused of a financial crime? If you are another company, would you do business with another that has been indicted? The answer is frequently no.”

Horwitz and other legal experts said a conviction would trigger challenges for the Trump Organization.

An indictment would come at a time when the Trump Organization is already struggling.

The pandemic starved his hotels of traveling customers, his golf courses are losing money, and his extremist politics have turned off potential partners.

Lucrative licensing and entertainment deals have withered or ended altogether.