The Trump family's real estate business is expected to go on trial in New York next week on charges related to tax fraud. This could result in the company being fined and complicating its operations.
The Manhattan district attorney's office filed a lawsuit in July 2021 against the Trump Organization and Allen Weisselberg, its former chief financial officer, for tax fraud. They were accused of intentionally misappropriating “off the books” benefits that were granted to executives.
Over the course of his career, Weisselberg has worked for the Trump Organization. In August, he pleaded guilty to hiding over $1.76 million in income. As part of his plea agreement, he was ordered to testify at the trial of the company.
Although Donald Trump has not been charged, the trial of his namesake company is taking place at a time when he is considering running for re-election in 2024. His son Eric and Donald Trump Jr. are currently running the company. Other prosecutors are also looking into the former president, including allegations of obstruction of justice.
The Trump Organization could face up to $1.6 million in fines for various charges brought against it. Some of these include three counts of tax fraud and six counts of illegal activity. The company's two subsidiaries, Trump Payroll Corp. and Trump Corporation, are additionally charged in the case.
Trump's lawyers have claimed that the case is being carried out in a selective manner due to the prosecutors' political views. However, the judge overseeing the case has rejected this claim. Alvin Bragg, the district attorney in New York, and Cyrus Vance, the former head of the Manhattan district attorney's office, are both Democrats.
In response, the Trump Organization's lawyers have claimed that the prosecutors failed to provide evidence to the grand jury that indicted the company. They also said that the prosecutors are targeting the company because a number of its officers failed to report certain perks on their personal tax returns.
An attorney who specializes in tax law said that the Trump Organization's alleged illegal activity could help prosecutors prove their case against the company. For instance, if the company was able to maintain its off-the-books income for several years, it could show that it was trying to avoid paying taxes.
The case filed by the prosecutors is different from the civil fraud lawsuit that was filed by the New York state Attorney General on September 21. In the lawsuit, Letitia James accused the Trump Organization and several of its executives of overstating the company's assets in order to get bank loans and insurance coverage.
Marc Scholl, a former prosecutor, said that the Manhattan district attorney's office can only bring financial penalties related to the charges. He noted that a corporation could face up to a maximum of $250,000 in fines for each count of tax fraud.
Professor Miriam Baer of Brooklyn Law School said that the trial could have a negative impact on the Trump Organization's business. She noted that other companies might not do business with the organization if the judge decides to impose harsh penalties on it.
Despite the high-profile nature of the cases brought by the Manhattan district attorney's office, trials are rarely carried out.
The prosecutors have accused Allen Weisselberg, the company's finance director, of taking advantage of the perks offered to him by the Trump Organization. They said that he received various perks, such as rent for an apartment in New York and the leasing of two luxury cars. He was also allegedly involved in the purchase of personal items, such as carpets and televisions.
The prosecutors noted that Weisselberg was able to avoid paying taxes by failing to report the various perks on his personal tax returns. He was also allegedly given $133,000 in refunds that he didn't deserve.
Although it's not illegal to receive perks from an employer, these must be reported as income on the individual's tax returns, according to Jay Soled, an accounting professor at a business school in New Jersey.
The preceding is a summary of an article that originally appeared on The Daily Cable.