Trump Organization fined $1.6 million for tax fraud scheme

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The entrance to Trump Tower on 5th Avenue is pictured in the Manhattan borough of New York City, May 19, 2021.

Shannon Stapleton | Reuters

The Trump Organization, former President Donald Trump’s business empire, was hit with a $1.6 million fine Friday for tax fraud and other crimes committed as part of a yearlong scheme to help some of its top executives to avoid paying taxes on the compensation.

The Trump Corp. and The Trump Payroll Corp., two subsidiaries of the Trump Organization, were both sentenced to the maximum possible fines under New York laws. The Trump Organization has denied all wrongdoing and plans to appeal the verdict.

The subsidiaries were found guilty last month on 17 counts, including tax fraud, falsifying business records and conspiracy, as part of what prosecutors called a “sweeping and audacious” scheme to pay off company executives “off the books.” The verdict by a New York City jury marked the first criminal convictions of Trump companies.

One of those executives is former Trump Organization Chief Financial Officer Allen Weisselberg, who pleaded guilty to tax fraud charges last summer and agreed to cooperate with prosecutors against his longtime employer .

The Manhattan district attorney’s office accused Weisselberg of accepting more than $1.7 million in unreported compensation over more than a decade. That compensation came in the form of rent payments on luxury apartments, household appliances, Mercedes-Benz cars for him and his wife, parking garage expenses, and private school tuition fees. for his grandchildren, prosecutors say.

Prosecutors and Trump Organization lawyers gather at the Manhattan Criminal Courthouse for a sentencing hearing in New York City, US January 13, 2023.

Adam Gray | Reuters

Weisselberg and Trump’s companies “perpetrated and benefited from fraud for more than a decade,” Manhattan DA Alvin Bragg said in a statement after the sentence came down Friday morning.

“While corporations cannot serve prison time, this resulting conviction and sentence serves as a reminder to corporations and executives that you cannot cheat the tax authorities and get away with it. It is also an important reminder. that our state law must change so that we can impose more significant penalties and sanctions on corporations that commit crimes in New York,” Bragg said.

The DA added that his office’s investigation into Trump and his businesses remains ongoing.

In a statement after the sentence came down, New York Attorney General Letitia James said it “proves once again that no one is above the law, not even Donald Trump or his business.”

James’ office is leading a civil investigation into Trump, his family and his businesses over allegations of massive financial fraud. He filed a massive civil suit against those parties and others seeking at least $250 million in damages.

Weisselberg, a 75-year-old former executive who has worked for the Trump family since 1973, was sentenced to five months in prison on Tuesday. Reuters reported that the Trump Organization is still paying Weisselberg’s lawyers, as well as a prison consultant to help prepare him for jail at New York’s notorious Rikers Island facility.

“Allen Weisselberg was a victim. He was threatened, intimidated and intimidated. He was given the choice to plead guilty and serve 90 days in prison or serve the rest of his life in prison all because of a corporate car and standard employee benefits,” a Trump Organization spokeswoman said in a statement later Friday morning.

The spokesman also called out Trump and his corporate victims, accusing New York prosecutors of continuing a political “witch-hunt” while ignoring other crimes in the city.

“We have done nothing wrong and we will appeal this verdict,” the spokesman said.

Trump himself has not been charged in the case. He decried the guilty verdict against his company as “a continuation of the Greatest Political Witch Hunt in the History of our Country.” The ruling came shortly after Trump announced his 2024 presidential campaign.

Weisselberg’s attorney, Nicholas Gravante, said in a statement Tuesday that Weisselberg “regrets the harm his actions have caused the Trump Organization and members of the Trump family.”

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