NEW YORK (AP) – Donald Trump’s company was fined $1.6 million on Friday as punishment for a scheme in which the former president’s top executives avoided personal income taxes on lavish work benefits – a symbolic blow, almost impossible to cripple 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.
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.
Neither the former president nor his children, who helped run and promote the Trump Organization, were in the courtroom for the sentencing hearing.
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 conspiracy charges and falsifying business records.
The company asked for 30 days to pay the fine; The judge ordered to pay in 14 days.
Under the law, the maximum penalty that Merchan can impose is about $1.6 million, an amount equal to doubling the taxes avoided by a small group of executives on benefits that include 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.
While a fine of that amount won’t 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 for the White House.
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 said the case against the company was 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.
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 in court, 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 the company 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.”
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 strongly condemns 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.
The conviction and conviction of the Trump Organization did not end Trump’s battle with Manhattan District Attorney Alvin Bragg, a Democrat who took office in January. Bragg said the Trump-related investigation that began under his predecessor, Cyrus Vance Jr., is “active and ongoing,” with newly hired prosecutors.
At the same time, New York Attorney General Letitia James sued Trump and the Trump Organization, alleging they misled banks and others about the value of many of their assets, a practice she called the “art of theft.”
James, a Democrat, asked the court to ban Trump and his three eldest children from running any New York-based company and sought a fine of at least $250 million. A judge has set an October trial date. As an initial step, he appointed a monitor for the company while the case was pending.
Trump faces several other legal challenges as he seeks to capture the White House in 2024.
A special grand jury in Atlanta has been investigating whether Trump and his allies committed crimes while trying to overturn his 2020 election loss in Georgia.
Last month, the House committee on January 6 voted to make a criminal referral to the Department of Justice for Trump’s role in sparking a violent insurrection in the US Capitol. The FBI is also investigating Trump’s storage of classified documents.