Trump Org. fined $1.6 million after conviction for 17 felonies, including tax fraud

(CNN) — The Trump Organization was fined $1.6 million — the maximum possible penalty — by a New York judge Friday for running a decade-long tax fraud scheme, a symbolic moment because it is the only judgment for a criminal conviction that has come close to former President Donald Trump.

Two Trump entities, The Trump Corp. and Trump Payroll Corp., were convicted last month of 17 felonies, including tax fraud and falsifying business records.

Under New York law, the most the companies can be fined is about $1.6 million, a penalty Trump Organization can easily afford.

Prosecutor Joshua Steinglass asked Judge Juan Merchan to make Trump Organization pay the maximum fine, though he admitted that it will have a “minimal impact” on a multibillion-dollar company.

“We all know that these corporations cannot go to jail as Allen Weisselberg has,” Steinglass said Friday, referring to Trump Organization’s long-time chief financial officer who was sentenced to five months in jail earlier this week as part of a deal he reached with prosecutors. “The only way to effectively deter such conduct is to make it as expensive as possible.”

New York District Attorney Alvin Bragg said Friday that the fine against Trump Organization is important but he also wants lawmakers to raise the fines for companies that break the law.

“This conviction was,” Bragg said outside of the courtroom Friday, “was consequential, the first time ever for criminal conviction of former President Trump’s companies, and indeed I would go so far as to say the first time ever for any former president certainly in my lifetime.”

But, Bragg added, the fine isn’t enough of a penalty.

“I want to be very clear — we don’t think that is enough. Our laws in this state need to change in order to capture this type of decade-plus systemic, egregious fraud,” Bragg said.

The Trump Organization entities have 14 days to pay the fine.

The real estate business is not at risk of being dismantled because there is no mechanism under the law to dissolve the company. No individual will go to jail based on the jury’s verdict. However, a felony conviction could impact Trump Organization’s reputation and ability to do business or obtain loans or contracts.

Trump and his family were not charged in this case, but the former president was mentioned repeatedly during the trial by prosecutors about his connection to the un-taxed benefits doled out to certain executives, including company-funded apartments, car leases and personal expenses. One prosecutor said Trump “explicitly sanctioned” tax fraud.

One of the jurors told CNN that the jury saw a “culture of fraud,” at Trump Organization, but referred to Trump as a nondescript “Bob Smith” at times when talking about the company owner’s awareness of the crimes in relation to the charges.

Weisselberg last year pleaded guilty to 15 felonies related to the tax fraud scheme and agreed to testify truthfully against the company at trial.

He remained on paid leave at  Trump Organization, where he was compensated a little more than $1 million a year, until Tuesday when he was sentenced. Weisselberg received a severance package that one person familiar with the deal called “generous.”

Merchan, who sentenced Weisselberg, said at the time that but for the deal he would have given Weisselberg more time in jail after listening to the evidence at trial.

Merchan said he found most “offensive” a $6,000 payroll check Weisselberg had made out to his wife, who never worked for Trump, so she could become eligible for Social Security benefits.

Not over yet

The Manhattan district attorney’s office continues to investigate the company’s business practices.

Prosecutors are conducting a wide-ranging investigation and in recent months their focus has returned to the company’s involvement in hush-money payments made to silence adult film star Stormy Daniels from going public with an affair with Trump just before the 2016 election, people familiar with the matter said. Trump has denied the affair.

Prosecutors are also looking into potential insurance fraud after new material came to light from the New York attorney general’s civil investigation into the accuracy of the Trump Organization’s financial statements, the people said.

The biggest threat currently facing the company could be New York Attorney General Letitia James’ $250 million civil lawsuit, which has alleged Trump, his three eldest children, Weisselberg and others defrauded lenders, insurers and tax authorities by inflating the value of multiple Trump Organization properties for more than a decade.

In addition to money, James, a Democrat, is seeking to permanently bar Trump and the children named in the lawsuit from serving as a director of a business registered in New York state. She is also seeking to cancel Trump Organization’s corporate certificate, which if granted by a judge, could effectively force the company to cease operations in New York state.

The judge overseeing the lawsuit put an independent monitor in place to review Trump Organization’s financial statements and business decisions. He recently denied motions to dismiss the case and said he considered sanctioning Trump’s attorneys. The trial is set for October.

Trump has denied wrongdoing and said the lawsuit is politically motivated.

This story has been updated with additional details.

The-CNN-Wire
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