Donald Trump’s businesses have been found guilty of running a 13-year tax fraud scheme, in a significant victory for Manhattan prosecutors who pursued the only criminal case against the former US president’s empire even as he launched a third bid for the White House.
A New York jury on Tuesday convicted The Trump Organization — whose entities had been charged with illegally reducing the tax it paid on executive pay by awarding top managers “off the books” perks — on all 17 counts following a trial that began October 31.
“The former president’s companies now stand convicted of crimes. That is consequential, it underscores that in Manhattan we have standard of justice for all,” Manhattan district attorney Alvin Bragg told reporters immediately after the unanimous verdict.
The decision is the third big defeat for Donald Trump or his businesses in the space of a few weeks, after the US Supreme Court ordered his taxes to be handed to a congressional committee and an appeals court rejected the former president’s request for a special master to review documents gathered in an FBI search of his Mar-a-Lago home.
Trump also faces a civil case brought by the New York attorney-general Letitia James against him, his children and his businesses, which is set to go to trial in October 2023. A loss in that case could lead to fines in excess of $250mn.
“This verdict sends a clear message that no one, and no organisation, is above our laws,” James, whose office assisted the district attorney’s case, said in a statement.
The Manhattan case, originally brought by the district attorney’s office last summer, hinged upon the testimony given by The Trump Organization’s former chief financial officer Allen Weisselberg, who has worked for the Trump family in a number of roles since 1973.
Weisselberg pleaded guilty in August to defrauding tax authorities via a scheme that allowed him to receive $1.76mn in unreported income from Trump entities, in the form of a luxurious Upper West Side apartment, Mercedes cars and private tuition for his grandchildren.
He was promised a lenient sentence — five months of incarceration, albeit in the notoriously tough Rikers Island jail — on the condition that he testified truthfully in the trial against The Trump Organization.
Sentencing has been set for January 13. A lawyer for the Trump Organization said it plans to appeal.
Trump took aim at the DA’s case before the verdict was delivered on Tuesday, saying the office “has spent almost all of its time & money fighting a political Witch Hunt for DC against ‘Trump’ over Fringe Benefits”.
Lawyers for the Trump businesses had sought to establish that Weisselberg and The Trump Organization’s controller Jeffrey McConney, who also took the stand, acted alone, and that despite personally signing several cheques and leases, Trump was unaware of the tax fraud being committed by his closest lieutenants.
Under cross-examination, Weisselberg, 75, who is still on The Trump Organization’s payroll, fought back tears in earlier cross-examination as he appeared to corroborate that assertion, insisting it was his “greed” alone that had led him to keep the perks off his employer’s tax forms.
Defence attorney Michael van der Veen said the testimony proved that “Weisselberg did it for Weisselberg”. In closing arguments last week, he added: “This case isn’t about Donald Trump, it is about Weisselberg and two corporate entities that did not commit crimes.”
For their part, government prosecutors sought to establish that Weisselberg and other executives had acted with, and for the benefit of, their employer.
“It was a win-win, a way to get more money into executives’ pockets while keeping [The Trump Organization’s] own costs as low as possible,” Manhattan assistant district attorney Joshua Steinglass told jurors during closing arguments.
He added that if the actions of Weisselberg, who earned over $1mn a year as CFO, were truly unimportant to the running of The Trump Organization, it would make him “the highest-paid lackey in history”.
The jury, who deliberated for the best part of two days, asked for testimony by accounts supervisor Deborah Tarasoff to be read aloud again in court on Tuesday, in which she said she had removed Weisselberg’s name from accounting documents weeks before Trump took office.
The Trump Organization is unlikely to be fined more than $1mn, but the guilty verdict could hamper the company’s ability to get loans, make deals and obtain government contracts.