Trump Organisation fined $2.3 million for tax fraud

The Trump Organisation and its growth into a real estate, hospitality, branding and golf resort behemoth is what catapulted Trump to fame and ultimately into politics. It helped land him a national stage on NBC’s prime-time Apprentice and Celebrity Apprentice productions, both filmed mostly at its headquarters at Trump Tower on Fifth Avenue in Manhattan.

Donald Trump with chief financial officer Allen Weisselberg, centre, and son Donald jnr in 2017.Credit:AP

On December 6, after a trial that took more than a month, a New York Supreme Court jury found the Trump Organisation guilty on charges including scheme to defraud, conspiracy, criminal tax fraud and falsifying business records. The Trump Corporation and Trump Payroll Corp, operating under the same corporate umbrella, were convicted on 17 counts. Trump was not charged in the case.

The tax case had already yielded a guilty plea from and five months in jail for long-time finance chief Allen Weisselberg, 75, who was the key witness against the company. He pleaded guilty in August to 15 felonies and agreed to testify in exchange for a significantly reduced sentence and five years of probation, which was imposed in court on Tuesday. He also paid the state more than $US2 million in back taxes, fines and interest. He had faced up to 15 years in jail.

Weisselberg admitted to orchestrating a long-standing set of illegal practices that benefited himself, other executives and his employer and to personally avoiding taxes on $US1.7 million in unreported income.

Weisselberg’s perks included a prime Manhattan apartment, Mercedes-Benz vehicles issued by the company for himself and his wife, and private school tuition payments for his grandchildren worth $US200,000 a year. He accepted the expenses as gifts for at least a decade beginning in 2005 and later began reimbursing the company for them – but still came out ahead because it enabled him to use pretax funds for personal costs.

According to the testimony at trial, the Trump Organisation began eliminating the illegal practices around 2017 when Trump took office and when an internal audit was conducted at the company by a tax attorney. After those corrections were in place, Weisselberg said he sought, and was given, a raise to compensate for the expenses he had to start paying himself.


The company saved about $US25,000 in its Medicare employer tax responsibility as a result of fraud and also saved on salary costs by paying its executives less, prosecutors argued at the trial.

Weisselberg told the jury that he acted only with another executive, comptroller Jeffrey McConney, to cheat on taxes in various ways relating to executive compensation. Weisselberg blamed himself for the crimes, saying it was his “own personal greed that led to this” and maintaining that the Trump family was not involved in the scheme.

Weisselberg also said there was a longstanding Trump Organisation practice of issuing annual bonuses to executives from company subsidiaries and classifying them as non-employee contractor payments, which is illegal.

Defence lawyer Nicholas Gravante jnr said after the trial that Weisselberg had finalised his official departure from the company on Tuesday and was pleased with a severance package. Gravante said he was not involved in the severance talks. Weisselberg was on the payroll through the trial.

Trump Organisation spokeswoman Kimberly Benza said in a statement that Weisselberg, the company and Trump were victims. She described the prosecutors as politically motivated.

“We did nothing wrong and we will appeal this verdict,” she said.

Manhattan District Attorney Alvin Bragg, whose office secured the Trump Organisation conviction, still has an open investigation into Trump’s business practices and other matters.

In brief remarks after the company’s sentencing, Bragg said the company’s punishment was “not enough” and said state laws for corporate tax fraud should carry harsher penalties. He also said the sentencing “closes this important chapter of our ongoing investigation into the former president and his businesses.”

“We now move on to the next chapter,” he said.

The Washington Post

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