This story was updated.
Former President Donald Trump’s real estate company was convicted on tax fraud charges in a Manhattan court Tuesday, adding to his legal concerns as he seeks reelection to the White House in 2024 and potentially complicating his firm’s ability to do business in New York.
The jury’s guilty verdict on all counts comes after a criminal fraud case brought against the Trump Organization by Manhattan District Attorney Alvin Bragg.
A Trump Organization lawyer, Susan Necheles, vowed in an emailed statement to appeal: “We disagree with the jury’s verdict,” she said. In earlier public statements, Trump had repeatedly maintained his own innocence and that of his firm. In this case, in a phrase he has also used to describe other legal allegations against him, he described the proceedings as a political witch hunt.
In the trial that began in late October, the Trump Organization was accused of evading taxes by concealing about $1.7 million in taxable income, with the real estate development firm accused of providing off-the-books benefits such as cars, private school tuition and homes since 2005.
Trump did not personally face charges, but his company faces penalties including fines of about $1.6 million. Longtime Chief Financial Officer Allen Weisselberg, who pleaded guilty in August, testified under oath.
Necheles added that “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. Every witness repeatedly testified that Allen Weisselberg committed tax fraud on his personal tax return, solely for his own benefit and with zero benefit to the company."
Sentencing is scheduled for Jan. 13, according to a statement from Bragg.
“This was a case about greed and cheating,” Bragg said in a statement. “In Manhattan, no corporation is above the law.”
The criminal tax trial is separate from a civil suit brought in September against the company, Trump and other executives by New York Attorney General Letitia James. Trump also faces separate U.S. Department of Justice investigations regarding attempts to overturn the 2020 presidential election and the former president’s handling of classified and highly sensitive documents after leaving office.
The all-counts conviction is the first against the former president’s companies, said Bragg, a Democrat. He took office early this year.
Income Reporting Issue
Bragg’s office successfully argued in the trial that the Trump Organization and affiliates defrauded federal, state and local tax authorities by paying Weisselberg and other executives much of their compensation in the form of perks that were not reported as income, which allowed the company and employees to pay less in taxes.
Convictions were for scheme to defraud in the first degree, conspiracy in the fourth degree, criminal tax fraud in the third and fourth degrees, and falsifying business records in the first degree.
The verdict came on the second day of jury deliberations.
Weisselberg, who prosecutors say faces prison time, said “my own personal greed” was to blame for the scheme, according to media reports of the trial. Necheles also argued that the scheme was for Weisselberg’s benefit.
“Mr. Weisselberg testified under oath that he ‘betrayed’ the trust the company had placed in him and that he, at all times, acted ‘solely’ for his ‘own personal gain’ and out of his ‘own personal greed,’” a Trump Organization spokesperson said in an email to CoStar News. “The notion that a company could be held responsible for an employee’s actions, to benefit themselves, on their own personal tax returns is simply preposterous.
“Why would a corporation whose owner knew nothing about Weisselberg’s personal tax returns be criminally prosecuted for Allen Weisselberg’s personal conduct, for which they had no visibility or oversight? This case was unprecedented and legally incorrect.”
Although the potential maximum fine is relatively small for a company whose holdings include high-rises and golf resorts throughout the world, a guilty verdict could further damage the Trump Organization’s reputation and its ability to work with lenders and investment partners, legal experts have previously said.
James’ ongoing civil fraud case also has the potential to significantly hinder the company’s operations.
Trump and his company are accused of making deceptive financial statements to obtain better terms on loans and insurance. James seeks to bar Trump Organization officers from holding such positions in the state for five years. It also seeks at least $250 million in damages.