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Trump Organization Convicted of Tax Fraud

S.J. Steinhardt
Published Date:
Dec 7, 2022

The Trump Organization was convicted on 17 counts of tax fraud and other crimes yesterday, multiple news organizations reported. The Manhattan district attorney’s office prosecuted the case in New York State Supreme Court in Manhattan, and the jury deliberated for more than a day.

The star witness for the prosecution was the Trump Organization’s chief financial officer, Allen Weisselberg, who was indicted in the tax-fraud case against the company, along with the Trump Corporation and Trump Payroll Corporation, in 2021. Weisselberg struck a plea deal with prosecutors in August in which he pled guilty to 15 counts of tax fraud. He agreed to cooperate with the investigation into the companies but not with other investigations into Trump himself, the New York Times reported.

Weisselberg admitted to a variety of crimes, such as not paying taxes on off-the-book perquisites that amounted to $1.76 million. Those perks included a rent-free apartment in a Trump building, leased cars for him and his wife, and private school tuition for their grandchildren.

The terms of the plea deal called for Weisselberg to spend five months in jail, followed by five years probation, and to pay nearly $2 million in tax repayments and financial penalties, in exchange for his truthful testimony, The Wall Street Journal reported. He will be sentenced on Dec. 19.

Trump Organization Controller Jeffrey McConney also testified for the prosecution under a grant of immunity, but was ultimately declared a hostile witness after being evasive on the stand, Crain’s New York Business reported

In testifying for the defense. Mazars partner Donald Bender said that he relied on Weisselberg’s information and did not notify the Trumps of anything illegal, according to the Journal. A spokeswoman for Mazars told the Journal that the firm had no knowledge of illegal or criminal activity involving the Trump Organization or Weisselberg. 

The maximum penalty that the companies could pay is $1.62 million, but the reputational and business damage could be greater.

“The parent company, as a felon, could be barred from having contracts with government agencies, and it could make it more difficult to do business with banks,” Pace University Law School Professor Bennett Gershman told Bloomberg before the verdict.

In addition to an ongoing federal criminal investigation of the former president, New York state Attorney General Letitia James, filed a lawsuit in September that alleged fraud and misrepresentation at Trump companies. The suit named the former president, three of his children, Weisselberg, McConney, and other Trump entities as defendants.