Donald Trump's company was fined $1.6 million Friday for a scheme in which the former president's top executives dodged personal income taxes on lavish job perks — a symbolic, hardly crippling blow for an enterprise boasting billions of dollars in assets.
What You Need To Know
- Donald Trump's company has been fined $1.6 million as punishment for a scheme in which some of his executives dodged personal income taxes on lavish job perks
- The fine imposed Friday was the only penalty a judge could impose on the Trump Organization
- The company was convicted of 17 tax crimes, including conspiracy and falsifying business records
- The amount imposed by Judge Juan Manuel Merchan was equal to double the amount of taxes a small group of executives avoided on benefits including rent-free apartments, luxury cars and private school tuition
- Trump himself was not on trial and has denied any knowledge of executives evading taxes illegally.
A fine was the only penalty a judge could impose on the Trump Organization after its conviction last month for 17 tax crimes, including conspiracy and falsifying business records.
The amount imposed by Judge Juan Manuel Merchan was the maximum allowed by law, double the taxes a small group of executives avoided on benefits including rent-free apartments in Trump buildings, luxury cars and private school tuition.
Merchan gave the company 14 days to pay.
Trump himself was not on trial and denied any knowledge of his executives evading taxes illegally. In a statement released after sentencing, the Trump Organization said it did nothing wrong and would appeal.
"These politically motivated prosecutors will stop at nothing to get President Trump and continue the never ending witch-hunt which began the day he announced his presidency," it said.
Neither the former president or his children, who helped run and promote the Trump Organization, were in the courtroom.
While the fines — less than the cost of a Trump Tower apartment — aren't big enough to impact 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.
Outside the courtroom, Manhattan District Attorney Alvin Bragg, a Democrat, said he wished the law had allowed for a more serious penalty.
"I want to be very clear: we don't think that is enough," he said. "Our laws in this state need to change in order to capture this type of decade-plus systemic and egregious fraud."
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.
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.
Assistant District Attorney Joshua Steinglass told jurors Trump had a role, showing them a lease the Republican signed himself for Weisselberg's apartment.
"Mr. Trump is explicitly sanctioning tax fraud," Steinglass argued.
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."
At the trial, Trump Organization lawyers repeated the mantra, "Weisselberg did it for Weisselberg." In its statement Friday, it took a different tone.
"Allen Weisselberg is a victim," it said. "He was threatened, intimidated and terrorized. He was given a choice of pleading guilty and serving 90 days in prison or serving the rest of his life in jail -- all of this over a corporate car and standard employee benefits."
A jury convicted the company of tax fraud on Dec. 6.
The Trump Organization was charged through two corporate entities: The Trump Corp., which was fined $810,000; and Trump Payroll Corp., which was fined $800,000.
Those fines 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 sentencing doesn't end Trump's battle with Bragg, who said the sentencing "closes this important chapter of our ongoing investigation into the former president and his businesses. We now move onto the next chapter."
Bragg, a Democrat who took office in January, was referring to a related investigation of Trump that began under his predecessor, Cyrus Vance Jr.
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.