Donald Trump’s company was fined $1.6 million US on Friday as punishment for a scheme in which the former U.S. president’s top executives dodged personal income taxes on lavish job perks тАФ a symbolic, hardly crippling blow for an enterprise boasting billions of dollars in assets.
A fine was the only penalty a judge could impose on the Trump Organization for 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, an amount equal to double the taxes a small group of executives avoided on benefits including rent-free apartments in Trump buildings, luxury cars and private school tuition.
Trump himself was not on trial and denied any knowledge of his executives evading taxes illegally.┬аIn 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 for the sentencing hearing.
The Trump Organization was charged through its subsidiaries Trump Corp., which was fined $810,000; and Trump Payroll Corp., which was fined $800,000.
While the fines тАФ less than the cost of a Trump Tower apartment тАФ 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.”
Scheme was ‘far-reaching,’ prosecutor says
Prosecutor Joshua Steinglass said the fines constitute “a fraction of the revenue” of the Trump Organization and that the scheme was “far-reaching and brazen.”
“All of these corrupt practices were part of the Trump Organization executive compensation package, and it was certainly cheaper than paying higher salaries to those executives,” he said.
Defence┬аlawyers┬аhad argued that the fine should be slightly lower because, they said, state law bars fines on multiple counts of the same charge. They estimated the penalty should have been $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 its conviction last month for 17 tax crimes, including charges of conspiracy and falsifying business records.
The company asked for 30 days to pay the fine; the judge ordered it to pay in 14 days.
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.
Trump has said the case against his company was part of a politically motivated “witch hunt” waged against him by vindictive Democrats. The company’s lawyers have vowed to appeal the verdict.
The criminal case involved financial practices and pay arrangements that the company halted when Trump was elected president in 2016.
Perks included┬аprivate school tuition
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.
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.”
Company says former CFO went rogue
Trump Organization lawyers repeated the mantra, “Weisselberg did it for Weisselberg,” contending that he had gone rogue and betrayed the company’s trust.
Assistant district attorney Joshua Steinglass attempted to refute that claim in his closing argument, showing jurors a lease Trump signed himself for Weisselberg’s apartment.
“Mr. Trump is explicitly sanctioning tax fraud,” Steinglass argued.
A jury convicted the company of tax fraud on Dec. 6.
The company’s fine 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.
