Trump companies convicted on all charges in Manhattan criminal tax fraud case
Kevin McCoy - Delaware Online
NEW YORK – A Manhattan jury on Tuesday convicted two of former President Donald Trump's companies on all charges in a criminal tax fraud scheme, adding a new complication to the many investigations and legal matters shadowing his third presidential campaign.
The Trump Corporation was found guilty on all of nine criminal counts, and the Trump Payroll Corporation was found guilty on all of eight criminal counts. The charges included conspiracy, a scheme to defraud, and three counts of criminal tax fraud for each company.
The companies face criminal penalties of up to $1.6 million. The trial judge, Manhattan Supreme Court Justice Juan Merchan, said after the verdict that the companies would be sentenced on Jan. 13.
Manhattan District Attorney Alvin Bragg, whose office brought the charges, said the verdict was "consequential," and, invoking the slogan he has given his office, added it "underscores that here in Manhattan we have one standard of justice for all."
Defense attorney Allen Futerfas said he was "sure" the verdict would be appealed. That would potentially keep the case in the courts during Trump's 2024 campaign, possibly alongside the federal investigation of documents found at Trump's Mar-a-Lago estate and other cases.
"Symbolically, it is awful," because prosecutors asserted proof that Trump "was well aware of and approved" the scheme, said Andrew Weissmann, a former federal prosecutor who worked on special counsel Robert Mueller's investigation of Russian interference during the 2016 election.
Trump was not charged in the case and did not appear in the courtroom during the trial. Defense lawyer Susan Necheles said trial evidence showed Trump was not involved. However, the former president criticized the prosecution in a social media post in late November.
The jury of eight women and four men returned the verdict after two days of deliberations in the trial focused on a 15-year scheme involving thousands of dollars in off-the-books perks, such as company-paid apartments and luxury cars the companies handed to top executives who routinely failed to report the income on tax returns.
The trial also featured a legal clash over a difficult-to-parse New York state penal law that prescribes the standards prosecutors must meet to obtain criminal convictions of corporations.
The outcome capped a trial that began in late October and was marked by a COVID-19 delay, at times testy legal arguments plus an unsuccessful defense move for a mistrial when a prosecutor asserted that Trump had "explicitly" sanctioned the tax fraud scheme.
Jurors selected for the trial, some of whom said they had strong feelings about Trump, toldMerchan and opposing legal teams early in the case that they would set those sentiments aside, decide the case on the evidence and be fair and impartial.
The judge reminded jurors of that pledge Monday during his legal instructions to the panel before deliberations and asked them to honor it.
The main defense strategy was attacking Allen Weisselberg, the former longtime top financial lieutenant to Trump and an employee of the Trump family for nearly 50 years. He faced similar criminal charges as the companies, plus additional counts for false tax filings.
The 75-year-old disgraced executive pleaded guilty to all of the 15 criminal charges against him in an agreement with prosecutors in August. The deal tentatively allowed Weisselberg to avoid the maximum 15-year prison term he faced and instead serve roughly 100 days in jail. He's still employed and being paid by the Trump Organization, but he's no longer its chief financial officer. Weisselberg's sentencing date was scheduled to be set after the trial.
In exchange, he agreed to repay nearly $2 million in tax underpayments and penalties and testify truthfully during the trial.
"Weisselberg did it for Weisselberg," defense attorney Micheal van der Veen thundered during his closing argument for the Trump Payroll Corporation last week, invoking a defense mantra repeated throughout the trial.
The defense lawyer also told jurors prosecutors had Weisselberg "by the b---s," and the prosecution's star witness would testify to anything.
Weisselberg fought back tears during questioning by defense attorney Alan Futerfas that led him to acknowledge he had betrayed the trust of Trump, his family and his companies.
That line of questioning, along with repeated assertions that Trump was not aware of the tax fraud, proved problematic for the defense teams. Merchan cited them in ruling that Manhattan Assistant District Attorney Joshua Steinglass could contend during the prosecution's closing argument that Trump sanctioned the scheme because it kept top executives happy and saved his companies money.
The argument prompted a lawyer for the companies to seek a mistrial, a request the judge denied.
Prosecutors focused much of their case on eliciting a road map from Weisselberg that showed jurors his crimes and the falsifications, fraudulent tax filings and other ways the scheme was executed.
They also questioned Jeffrey McConney, the controller of the Trump Organization who had reported to Weisselberg.
Testifying grudgingly under a grant of immunity from prosecution, McConney admitted he arranged the corporate paperwork that helped Weisselberg and other Trump executives evade taxes. He also acknowledged he kept a virtual second set of books that documented compensation tax-saving changes for Weisselberg and other executives.
However, McConney testified that he merely followed Weisselberg's instructions.
McConney tested positive for COVID-19 during the trial. So did the judge and a court reporter. The illnesses delayed the trial for days.
Both sides also questioned Donald Bender, a partner of Mazars, the international audit, tax and advisory firm that for years held the multimillion-dollar tax preparation contract for Trump's many businesses.
The defense argued that Mazars failed Trump's businesses because its tax specialists inexplicably failed to find the scheming by Weisselberg and McConney, despite indications of it in Trump company ledgers. Prosecutors noted that Mazars' engagement letters with Trump's businesses required the companies to provide accurate information and said Mazars would not audit the records.
Along with sorting out witness testimony and trial exhibits, jurors had been expected to grapple with the terms of the New York penal statute that defines corporate criminal liability.
The law states in part that convictions require evidence that the offense was committed by or involved "a high managerial agent acting within the scope of his employment and in behalf of the corporation."
Given his former CFO role, the jury could have determined Weisselberg was that high-ranking official – or perhaps McConney, despite his testimony that his job was not a managerial post.
And what does "in benefit of" mean?
During his instructions on the law to the jurors on Monday, Merchan said that "if the agent's acts were taken merely for personal gain, they were not in behalf of the corporation."
He also told jurors "it is not necessary that a criminal act actually benefited the corporations."