What You Need to Know
- Two Trump Organization business units were sentenced on Friday in New York after a felony conviction last month.
- A $250 million civil fraud case brought by New York Attorney General Letitia James is scheduled for trial in October.
- “Does any company want to disclose they’re entering into a deal with a company convicted of tax fraud?” said Frank Agostino, a former IRS lawyer.
The $1.6 million penalty two Trump companies must pay for their tax fraud crimes is the maximum under the law, but it is likely to be eclipsed by longer-term blowback to the Trump Organization.
The two business units were sentenced on Friday in New York State Supreme Court after a felony conviction last month. The real punishment lies ahead, in potential fallout that goes beyond reputational damage to freezing the firm out of coveted deals, bank loans and government contracts, legal experts say.
“Doing business with a company that has been found guilty of unscrupulous practices may exceed the risk tolerance of lenders, insurers and potential business partners,” said Barbara McQuade, a former federal prosecutor who now teaches at the University of Michigan’s law school.
The sentencing comes after the jury returned its verdict against the two units on all 17 counts, including conspiracy, criminal tax fraud and falsifying business records. The case stems from a scam spanning more than a decade to hide taxable income by compensating executives with unreported…
