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Trump Organization faces sentencing for tax fraud scheme

Semta News
Semta News
4 Min Read

The Trump Organization is expected to be hit with up to $1.6 million in fines Friday when a New York judge sentences it for running a 15-year tax fraud scheme that prosecutors said top executives at the company orchestrated out of pure greed.

Trump Corp. and Trump Payroll Corp. — both subsidiaries of the Trump Organization — were convicted last month on 17 counts, including conspiracy, criminal tax fraud and falsifying business records.

Manhattan District Attorney Alvin Bragg said after the verdict that for too long the companies had gotten away “with a scheme that awarded high-level executives with lavish perks and compensation while intentionally concealing the benefits from the taxing authorities to avoid paying taxes.” He said the verdicts held them to account “for their long-running criminal scheme.”

The lone person charged in the scheme was the company’s former chief financial officer, Allen Weisselberg.

Weisselberg, 75, pleaded guilty in August and became the prosecution’s star witness during the weekslong trial, where he described how top employees and the company evaded paying taxes they owed.

Weisselberg was also the biggest personal beneficiary of the scheme, prosecutors said. He collected $1.76 million in “indirect employee compensation,” including a rent-free apartment, expensive cars, private school tuition for his grandchildren and new furniture. Other executives received similar perks and were paid bonuses as independent contractors, saving the company money in payroll taxes, Weisselberg testified.

Weisselberg was sentenced this week to five months in jail at Rikers Island. He could have faced up to 15 years in prison had he been convicted at trial.

Weisselberg and the company were first charged in June 2021 after a yearslong investigation into the company’s business practices by the Manhattan district attorney’s office and the state attorney general’s office.

At trial, the company’s lawyers painted Weisselberg as the lone bad actor and maintained that other executives, as well as Trump, were oblivious to what he was up to.

“This case was all about Allen Weisselberg committing tax fraud on his personal tax returns. Every witness repeatedly testified that President Trump and the Trump family knew nothing about Allen Weisselberg’s actions,” Trump attorney Susan Necheles maintained after the verdict.

Trump said in a statement last month that he was “disappointed” in the verdict and planned to appeal.

The $1.6 million in penalties the district attorney sought is the maximum allowed under applicable statutes in the case. Experts have said the bigger problem for the company is the conviction, because it could affect the Trump Organization’s ability to get bank loans.

The Trump Organization faces other legal problems in the state. State Attorney General Letitia James has filed a $250 million civil suit alleging that the company had been inflating its worth in financial statements to banks and insurers by billions of dollars.

The judge overseeing that case has issued an order blocking the company from transferring assets without court approval and appointed an independent monitor to oversee the company’s financial statements.

Trump has complained that the actions of the district attorney and the attorney general are part of the “witch hunt” against him.

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