The Trump Group fined $1.6 million for tax fraud

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

Shannon Stapleton | Reuters

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

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

The subsidiaries were found guilty on 17 counts last month, including tax fraud, falsifying business records and conspiracy, as part of what prosecutors have described as a “broad and bold” program to compensate company executives “off the books.” . The verdict by a New York jury was the first-ever criminal conviction of Trump’s company.

One of those executives was 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.

Manhattan prosecutors charged Weisselberg with receiving more than $1.7 million in unreported damages spanning more than a decade. That compensation came in the form of rent payments for luxury apartments, home furnishings, Mercedes-Benz cars for him and his wife, parking garage fees and private school fees for his grandchildren, prosecutors claimed.

Prosecutors and attorneys from the Trump Organization gather at the Manhattan Criminal Courthouse for the verdict hearing on January 13, 2023 in New York City, USA.

Adam Gray | Reuters

Weisselberg and Trump’s companies “have engaged in and profited from extensive fraud for well over a decade,” Manhattan District Attorney Alvin Bragg said in a statement after the verdict was reached Friday morning.

“While corporations cannot serve jail time, this consistent conviction and sentencing serves as a reminder to corporations and executives that you cannot cheat the tax authorities and get away with it. It’s also an important reminder that our state law needs to change so that we can impose more severe penalties and sanctions on corporations that commit crimes in New York,” Bragg said.

The prosecutor added that his office’s investigation into Trump and his businesses is ongoing.

In a statement following the sentencing, 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 companies over allegations of widespread financial fraud. She has filed a full-scale civil lawsuit against these parties and others, seeking at least $250 million in damages.

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

“Allen Weisselberg is a victim. He was threatened, intimidated and terrorized. He had a choice of pleading guilty and serving 90 days in prison or serving the rest of his life in prison — all over a company car and standard employee benefits,” a Trump Organization spokesman said in a statement later Friday morning.

The spokesman also named Trump and his company victims and accused New York prosecutors of conducting a political “witch hunt” and ignoring other crimes in the city.

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

Trump himself was not charged in the case. He has described the guilty verdict against his company as “the continuation of the largest political witch hunt in our country’s history.” The conviction came shortly after Trump announced his 2024 presidential campaign.

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

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