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Trump Organization convicted in N.Y. criminal tax fraud trial

Former president Donald Trump announces his bid for president at his Mar-a-Lago estate in Palm Beach, Fla., on Nov. 15. (Thomas Simonetti for The Washington Post)
4 min

NEW YORK — Former president Donald Trump’s namesake company was convicted Tuesday of tax crimes committed by two of its longtime executives after a Manhattan trial that gave jurors a peek at some of the inner workings of the Trump Organization’s finances.

The real estate, hospitality and golf resort operation headquartered at Trump Tower on Fifth Avenue faces the possibility of a $1.6 million fine at a sentencing scheduled Jan. 13. New York Supreme Court jurors began deliberations Monday.

The company was charged with scheme to defraud, conspiracy, criminal tax fraud and falsifying business records. Trump has not been charged with wrongdoing.

Alan Futerfas, a lawyer for the Trump Organization, said Dec. 6 that they would appeal the conviction of former president Donald Trump's real estate company. (Video: Reuters)

The verdicts Tuesday came amid other troubles for the Trump family business, which was sued by New York Attorney General Letitia James in September in a civil case that accuses Trump, three of his adult children and longtime chief financial officer Allen Weisselberg of manipulating the valuations of their properties to get better terms on loans and insurance policies, and to get tax breaks. The suit seeks to recover more than $250 million and has the potential to cripple the Trump Organization’s ability to continue doing business in the state.

In the criminal case, jurors saw a number of Trump Organization payroll and expense records spanning years that showed how executives received perks like luxury apartments and Mercedes Benzes while purposely concealing them from tax authorities.

“This was a case about lying and cheating, false documents to the end of evading taxes for the benefit of individuals and the [Trump Organization],” Manhattan District Attorney Alvin Bragg said at the courthouse after the verdict. “They have now been held accountable in a court of law.”

Trump Organization spokeswoman Kimberly Benza said in a statement that it is “preposterous” the company could be “held responsible for an employee’s actions,” pointing to elements of Weisselberg’s testimony in which he said he was motivated by his own “greed” and that he had “betrayed” the Trump family.

Lawyers for the company said there would be an appeal.

Alan Futerfas, a lawyer for the Trump Organization, said Dec. 6 that they would appeal the conviction of former president Donald Trump's real estate company. (Video: Reuters)

Prosecutors built the case largely around Weisselberg, who pleaded guilty in August to 15 counts including tax fraud, conspiracy and grand larceny. He was promised a steeply reduced sentence of five months in jail in exchange for testifying against the company. He had faced up to 15 years in prison.

Prosecutors claim to jurors that Trump knew of Weisselberg’s tax fraud

In his testimony, Weisselberg detailed how he and the company’s comptroller, Jeffrey McConney, schemed to cheat state and federal tax authorities beginning in 2005 and lasting more than a decade. Weisselberg used the company to cover major personal expenses like rent for a luxury apartment on the Hudson River, Mercedes Benz leases for himself and his wife, and private school tuition for his grandchildren.

In some instances, he paid the company back for his personal expenses, which allowed him to use pre-tax compensation illegally. Other expenses were paid for by the company but not reported as taxable income as required by tax laws.

McConney, who admitted in his testimony to committing crimes, was granted immunity under New York law because he was called by prosecutors as a grand jury witness in the case.

Prosecutors allege a 15-year tax fraud scheme as the Trump Organization and CFO Allen Weisselberg are arraigned on multiple criminal charges

Prosecutors argued that the conduct of Weisselberg and McConney made the company criminally liable. Two Trump Organization entities — the Trump Corporation and the Trump Payroll Corp. — were on trial. Both were found guilty on all charges — 17 counts in total.

The company “cultivated a culture of fraud and deception of lavishing illicit perks to entice its most senior executives of falsifying tax reporting documents to mask the true compensation they paid those executives,” Assistant Manhattan District Attorney Joshua Steinglass argued in his summation last week.

He also accused the company of “scapegoating” its accountants “for not being vigilant enough to sniff out their malfeasance.”

Lawyers for the entities said Weisselberg had no intent to help the company — only himself — and that prosecutors did not successfully prove there was corporate liability. Prosecutors said the company saved on their Medicare tax responsibility and benefited in other ways from the scheme.

The Manhattan district attorney’s office made a point at the close of the case to say Trump had personal knowledge of the tax cheating carried out by his executives. During his summation, Steinglass pointed to a document that had been initialed by Trump and called it “explicit” proof of his knowing that his executives were tinkering with expenses to reduce their tax liabilities.

In a recent social media post, Trump denied having knowledge of the crimes Weisselberg and McConney committed.

Bragg’s office is investigating other aspects of potential criminality, including whether Trump illegally misrepresented his wealth to bank and insurance officials to get better loan and policy rates.

Bragg recently appointed former Justice Department senior official Matthew Colangelo to senior counsel. Colangelo is likely to be involved in the ongoing Trump review.