Trump Organization Found Guilty of Criminal Tax Fraud in New York Trial

The guilty verdict is a blow to Mr. Trump, who, while facing civil lawsuits and criminal investigations, declared his third consecutive presidential bid last month. The conviction and subsequent penalties for his company could compound the weariness from some Republicans who want to move on to other party leadership.

A judge set the company’s sentencing for Jan. 13.

Manhattan District Attorney

Alvin Bragg

said the verdict holds the Trump business accountable for a long-running criminal scheme. “This was a case about greed and cheating,” Mr. Bragg said in a statement. “In Manhattan, no corporation is above the law.”

Mr. Trump wasn’t charged in the case, but his presence loomed over the trial. Prosecutors said that Mr. Trump sanctioned the tax-free benefits, and personally signed some checks for private-school tuition for former finance chief Allen Weisselberg’s grandchildren. During closing arguments, a defense attorney said Mr. Trump relied on an outside accountant who never told him the perks in question were illegal.

“Mr. Trump and his family are not here on trial before you,” the judge instructed the jury on Monday.

Mr. Trump said in a statement that he was disappointed with the verdict. “This case is unprecedented and involved no monetary gain to these two corporations,” he said.

A lawyer for the Trump Organization said the company would appeal.

A company spokeswoman said Mr. Weisselberg testified that he acted for his own personal gain. “The notion that a company could be held responsible for an employee’s actions, to benefit themselves, on their own personal tax returns is simply preposterous,” the spokeswoman said.

During the trial, which began in late October, jurors heard testimony from Trump Organization employees, a longtime Trump accountant and Mr. Weisselberg, the company’s former chief financial officer and star prosecution witness who pleaded guilty to 15 felonies for his role in the scheme.

Under an agreement with prosecutors, Mr. Weisselberg is expected to be sentenced to five months in jail, and likely serve just a portion of that, so long as he testified truthfully at trial.

He is scheduled to be sentenced on Dec. 19.

Prosecutors portrayed the Trump Organization as fostering a culture of fraud and deception, where off-the-books compensation extended beyond Mr. Weisselberg to other executives. Mr. Weisselberg told the jury that he illegally avoided paying taxes on benefits he received, including leased cars and a rent-free Manhattan apartment.  

The verdict, which came on the second day of deliberations, largely turned on the question of whether Mr. Weisselberg intended to commit tax crimes to help not only himself, but also his employer. Under a New York law defining corporate criminal liability, jurors were required to find a high-ranking officer acted “in behalf of” his employer, or with an intent that there could be some benefit to the Trump Organization. 

Defense attorneys cast Mr. Weisselberg as a rogue employee who sought to save money on his personal taxes. “Weisselberg did it for Weisselberg,” Trump attorney Michael van der Veen repeatedly told the jury throughout the trial.  

Donald Bender, a partner at accounting firm Mazars USA LLP, testified for the defense. He told the jury that he relied on the information Mr. Weisselberg provided and didn’t notify the Trumps of anything illegal. “Bender failed in his job,” said Susan Necheles, another lawyer for the Trump business.

A spokeswoman for Mazars said that during its work for the Trump Organization, the firm had no knowledge of illegal or criminal activity involving the company or Mr. Weisselberg. 

The tax-fraud case was an offshoot of a larger investigation into Mr. Trump and his company by the Manhattan district attorney’s office. The probe began under

Cyrus Vance Jr.

, a Democrat who formerly led the office. Under his leadership, the probe first examined hush-money payments to adult-film actress Stormy Daniels, then expanded into a battle over access to Mr. Trump’s tax returns that ended at the U.S. Supreme Court. Mr. Vance investigated whether Mr. Trump and his company inflated and deflated assets on statements provided to banks, insurers and tax authorities. Mr. Trump and the company have denied wrongdoing.

After Mr. Bragg took office at the beginning of the year, two top prosecutors resigned from the probe. One of them said in a letter that Mr. Bragg had decided against bringing a criminal case. Mr. Bragg has said his investigation continues and that he will tell the public whether it concludes with an indictment or without bringing charges. 

After a multiyear probe, New York Attorney General Letitia James filed a separate civil-fraud lawsuit against the former president, three of his adult children and his company earlier this year. She accused the Trumps and their company of engaging in a decadelong scheme to falsely value their assets and generate $250 million in ill-gotten gains. The Trumps have denied the allegations.

Write to Corinne Ramey at [email protected]

The guilty verdict is a blow to Mr. Trump, who, while facing civil lawsuits and criminal investigations, declared his third consecutive presidential bid last month. The conviction and subsequent penalties for his company could compound the weariness from some Republicans who want to move on to other party leadership.

A judge set the company’s sentencing for Jan. 13.

Manhattan District Attorney

Alvin Bragg

said the verdict holds the Trump business accountable for a long-running criminal scheme. “This was a case about greed and cheating,” Mr. Bragg said in a statement. “In Manhattan, no corporation is above the law.”

Mr. Trump wasn’t charged in the case, but his presence loomed over the trial. Prosecutors said that Mr. Trump sanctioned the tax-free benefits, and personally signed some checks for private-school tuition for former finance chief Allen Weisselberg’s grandchildren. During closing arguments, a defense attorney said Mr. Trump relied on an outside accountant who never told him the perks in question were illegal.

“Mr. Trump and his family are not here on trial before you,” the judge instructed the jury on Monday.

Mr. Trump said in a statement that he was disappointed with the verdict. “This case is unprecedented and involved no monetary gain to these two corporations,” he said.

A lawyer for the Trump Organization said the company would appeal.

A company spokeswoman said Mr. Weisselberg testified that he acted for his own personal gain. “The notion that a company could be held responsible for an employee’s actions, to benefit themselves, on their own personal tax returns is simply preposterous,” the spokeswoman said.

During the trial, which began in late October, jurors heard testimony from Trump Organization employees, a longtime Trump accountant and Mr. Weisselberg, the company’s former chief financial officer and star prosecution witness who pleaded guilty to 15 felonies for his role in the scheme.

Under an agreement with prosecutors, Mr. Weisselberg is expected to be sentenced to five months in jail, and likely serve just a portion of that, so long as he testified truthfully at trial.

He is scheduled to be sentenced on Dec. 19.

Prosecutors portrayed the Trump Organization as fostering a culture of fraud and deception, where off-the-books compensation extended beyond Mr. Weisselberg to other executives. Mr. Weisselberg told the jury that he illegally avoided paying taxes on benefits he received, including leased cars and a rent-free Manhattan apartment.  

The verdict, which came on the second day of deliberations, largely turned on the question of whether Mr. Weisselberg intended to commit tax crimes to help not only himself, but also his employer. Under a New York law defining corporate criminal liability, jurors were required to find a high-ranking officer acted “in behalf of” his employer, or with an intent that there could be some benefit to the Trump Organization. 

Defense attorneys cast Mr. Weisselberg as a rogue employee who sought to save money on his personal taxes. “Weisselberg did it for Weisselberg,” Trump attorney Michael van der Veen repeatedly told the jury throughout the trial.  

Donald Bender, a partner at accounting firm Mazars USA LLP, testified for the defense. He told the jury that he relied on the information Mr. Weisselberg provided and didn’t notify the Trumps of anything illegal. “Bender failed in his job,” said Susan Necheles, another lawyer for the Trump business.

A spokeswoman for Mazars said that during its work for the Trump Organization, the firm had no knowledge of illegal or criminal activity involving the company or Mr. Weisselberg. 

The tax-fraud case was an offshoot of a larger investigation into Mr. Trump and his company by the Manhattan district attorney’s office. The probe began under

Cyrus Vance Jr.

, a Democrat who formerly led the office. Under his leadership, the probe first examined hush-money payments to adult-film actress Stormy Daniels, then expanded into a battle over access to Mr. Trump’s tax returns that ended at the U.S. Supreme Court. Mr. Vance investigated whether Mr. Trump and his company inflated and deflated assets on statements provided to banks, insurers and tax authorities. Mr. Trump and the company have denied wrongdoing.

After Mr. Bragg took office at the beginning of the year, two top prosecutors resigned from the probe. One of them said in a letter that Mr. Bragg had decided against bringing a criminal case. Mr. Bragg has said his investigation continues and that he will tell the public whether it concludes with an indictment or without bringing charges. 

After a multiyear probe, New York Attorney General Letitia James filed a separate civil-fraud lawsuit against the former president, three of his adult children and his company earlier this year. She accused the Trumps and their company of engaging in a decadelong scheme to falsely value their assets and generate $250 million in ill-gotten gains. The Trumps have denied the allegations.

Write to Corinne Ramey at [email protected]