Two of former President Donald Trump’s companies have been found guilty of tax fraud—the first time any of his companies have been found guilty of criminal actions.
Key Details
- The court proceedings found that for 13 years the two companies were part of a scheme that allowed executives to evade taxes through company-paid perks.
- Perks included holiday bonuses rebranded as consulting fees, company-paid apartments, luxury cars, and former CFO Allen Weisselberg’s grandchildren receiving private-school tuition.
- Trump Corp. and Trump Payroll Corp. faced 17 counts of fraud in a trial that lasted a month.
- Charges included scheme to defraud, conspiracy, criminal tax fraud, and falsifying business records.
- Legal teams of both companies have indicated that they will appeal the verdict.
- The former president was not personally charged in the court proceedings, though he is currently embroiled in a series of personal legal cases as he faces criminal probes.
Why it’s news
Though Trump Corp. and Trump Payroll Corp. have been found guilty, the financial penalty for the companies will not be set until January 13. The amount may be nearly $1.6 million, Bloomberg reports.
A million-dollar penalty will likely have an insignificant effect on the companies, but the non-monetary consequences on the companies could have great repercussions. One potential result of the conviction is that the Trump family and its firms could have difficulty making deals in the future.
The verdict could result in restrictions on certain deals the companies could plan to make in the future. For example, Trump’s companies could face more obstacles when working with banks or attempting to negotiate government contracts.
To make matters worse for the company, the investigations haven’t ended. A $250-million civil suit is on the way for the Trump Organization. New York Attorney General Letitia James claims the value of the company was inflated. James is seeking penalties that would go as far as banning Trump’s four companies from New York.
“This case was about Allen Weisselberg committing tax fraud on his personal tax returns, etc., with he and every witness repeatedly testifying that President Trump and the Trump Family knew nothing about his actions, which he admits were done solely for his own benefit, and with no benefit to the two companies,” says the former president.