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Trump Organization to be sentenced for tax fraud, faces fine

The stiffest penalty Donald Trump’s company could receive when it is sentenced Friday by a New York judge for helping its executives dodge taxes is a $1.6 million fine — not even enough to buy a Trump Tower apartment

Michael R. Sisak
Friday 13 January 2023 01:33 EST

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The stiffest penalty Donald Trump’s company could receive when it is sentenced Friday by a New York judge for helping its executives dodge taxes is a $1.6 million fine — not even enough to buy a Trump Tower apartment.

Neither the former president nor his children, who helped run and promote the Trump Organization, are expected to be in the courtroom for the sentencing hearing. The company will be represented by its lawyers.

Because the Trump Organization is a corporation and not a person, a fine is the only way a judge can punish the company after its conviction last month for 17 tax crimes, including charges of conspiracy and falsifying business records.

By law, the maximum penalty that can be imposed by Judge Juan Manuel Merchan is around $1.6 million, an amount equal to double the taxes a small group of executives avoided on benefits including rent-free apartments in Trump buildings, luxury cars and private school tuition.

Trump himself was not on trial and denied any knowledge of his executives evading taxes illegally.

While a fine of that amount isn't likely to affect the company’s operations or future, the conviction is a black mark on the Republican’s reputation as a savvy businessman as he mounts a campaign to regain the White House.

Besides the company, only one executive was charged in the case: former Trump Organization Chief Financial Officer Allen Weisselberg, who pleaded guilty last summer to evading taxes on $1.7 million in compensation.

He was sentenced Tuesday to five months in jail.

Trump has said the case against his company was part of a politically motivated “witch hunt” waged against him by vindictive Democrats. The company’s lawyers have vowed to appeal the verdict.

The criminal case involved financial practices and pay arrangements that the company halted when Trump was elected president in 2016.

Over his years as the company's chief moneyman, Weisselberg had received a rent-free apartment in a Trump-branded building in Manhattan with a view of the Hudson River. He and his wife drove Mercedes-Benz cars, leased by company. When his grandchildren went to an exclusive private school, Trump paid their tuition.

A handful of other executives received similar perks.

When called to testify against the Trump Organization at trial, Weisselberg testified that he didn't pay taxes on that compensation, and that he and a company vice president conspired to hide the perks by having the company issue falsified W-2 forms.

Weisselberg also attempted to take responsibility on the witness stand, saying nobody in the Trump family knew what he was doing. He choked up as he told jurors, “It was my own personal greed that led to this.”

Trump Organization lawyers repeated the mantra, “Weisselberg did it for Weisselberg,” contending that he had gone rogue and betrayed the company’s trust.

Assistant district attorney Joshua Steinglass attempted to refute that claim in his closing argument, showing jurors a lease Trump signed himself for Weisselberg’s apartment.

“Mr. Trump is explicitly sanctioning tax fraud,” Steinglass argued.

A jury convicted the company of tax fraud on Dec. 6.

The company's fine will be barely a dent in the bottom line for an enterprise with a global portfolio of golf courses, hotels and development deals. It could face more trouble outside of court due to the reputational damage, such as difficulty finding new deals and business partners.

The Trump Organization’s conviction and sentencing don't end Trump’s battle with Manhattan District Attorney Alvin Bragg, a Democrat who took office in January. Bragg has said that a related investigation of Trump that began under his predecessor, Cyrus Vance Jr., is “active and ongoing,” with a newly hired prosecutor leading the charge.

At the same time, New York Attorney General Letitia James is suing Trump and the Trump Organization, alleging they misled banks and others about the value of its many assets, a practice she dubbed the “art of the steal.”

James, a Democrat, is asking a court to ban Trump and his three eldest children from running any New York-based company and is seeking to fine them at least $250 million. A judge has set an October trial date. As a preliminary measure, he appointed a monitor for the company while the case is pending.

Trump faces several other legal challenges as he looks to retake the White House in 2024.

A special grand jury in Atlanta has investigated whether Trump and his allies committed any crimes while trying to overturn his 2020 election loss in Georgia.

Last month, the House Jan. 6 committee voted to make a criminal referral to the Justice Department for Trump’s role in sparking the violent insurrection at the U.S. Capitol. The FBI is also investigating Trump’s storage of classified documents.

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Follow Michael Sisak on Twitter at twitter.com/mikesisak and send confidential tips by visiting https://www.ap.org/tips/

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