Trump Organization fined $1.6M for tax fraud scheme

Donald Trump’s company was fined US$1.6 million on Friday as punishment for a scheme in which the former US president’s top executives avoided personal income taxes on lavish work benefits – a symbolic, almost crippling blow to the company with billions of dollars in assets.

The fine was the only punishment a judge could impose on the Trump Organization after it was indicted last month on 17 tax crimes, including conspiracy and falsifying business records.

The amount imposed by Judge Juan Manuel Merchan is the maximum allowed by law, an amount equal to doubling the taxes avoided by a small group of executives on benefits including rent-free apartments in Trump buildings, luxury cars and private school fees.

Trump himself is not on trial and denies knowledge of his executive’s illegal tax evasion. In a statement released after the sentencing, the Trump Organization said it did not do anything wrong and would appeal.

“These politically motivated prosecutors will stop at nothing to get President Trump and continue their never-ending witch hunt, which began when he declared for the presidency,” he said.

Neither the former president nor his children, who helped run and promote the Trump Organization, were in the courtroom for the sentencing hearing.

The Trump Organization was sued through its subsidiary Trump Corp., which was fined $810,000; and Trump Payroll Corp., which was fined $800,000.

While the fine — less than the cost of a Trump Tower apartment — isn’t large enough to affect the company’s operations or future, the conviction is a black mark on the Republican’s reputation as a shrewd businessman as he campaigns to unseat White. house.

Outside the courtroom, Manhattan District Attorney Alvin Bragg, a Democrat, said he wanted the sentence to allow for more serious punishment.

“I want to be very clear: we don’t think it’s enough,” he said. “Our laws in this country need to be changed to catch this type of systemic and egregious fraud.”

The scheme was ‘far-fetched,’ prosecutors said

Prosecutor Joshua Steinglass said the fines were “a fraction of the income” of the Trump Organization and that the scheme was “complete and brazen.”

“All of these corrupt practices are part of the Trump Organization’s executive compensation package, and it’s certainly cheaper than paying these executives higher salaries,” he said.

Defense attorneys argued that the fines should be lower because, they say, state law prohibits fines on multiple charges with the same charge. He estimated that the penalty should be $750,000 or less for each of the two Trump entities.

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

The company asked for 30 days to pay the fine; The judge ordered to pay in 14 days.

Besides the company, only one executive has been charged in the case: former Trump Organization Chief Financial Officer Allen Weisselberg, who pleaded guilty last summer to tax evasion with $1.7 million in restitution.

He was sentenced on Tuesday to five months in prison.

Trump says the case against his company is part of a politically motivated “witch hunt” by vengeful Democrats. The company’s lawyers have vowed to appeal the verdict.

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

Perks include private school tuition

Over the years as the company’s chief moneyman, Weisselberg has received a rent-free apartment in a Trump-branded building in Manhattan with a view of the Hudson River. She and her husband drive a Mercedes-Benz car, leased by the company. When his grandchildren attend exclusive private schools, Trump pays the tuition.

Several other executives received similar perks.

When called to testify against the Trump Organization at trial, Weisselberg testified that he did not pay taxes on the compensation, and that he and the company’s vice president conspired to hide the benefits by issuing false W-2 forms.

Weisselberg also tried to hold the witness accountable, saying no one in the Trump family knew what he was doing. He choked up as he told jurors, “It was my personal greed that caused this.”

The company says its former CFO went rogue

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

Assistant district attorney Joshua Steinglass tried to refute that claim in closing arguments, pointing out to jurors that Trump’s tenant entered Weisselberg’s apartment.

“Mr. Trump is clearly sanctioning tax fraud,” Steinglass said.

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

Corporate fines will hardly be a problem for companies with portfolios of golf courses, hotels and global development deals. Can face other problems outside the court due to reputation damage, such as difficulty in finding new deals and business partners.