Trump Organization CFO Allen Weisselberg Resigns to AuthoritiesAllen Weisselberg is the chief financial officer at Trump Organization Inc. and will appear before a New York criminal court judge on Thursday, July 1, 2021. Trump Organization's long-serving chief financial officer, Allen Weisselberg, has surrendered before New York authorities. He is facing tax-related charges. Credit - Barry Williams-New York Daily News/BloombergIs Donald Trump going to be held responsible for the crimes that appear to swirl around him?Maybe he has already. The former president could be most hurt by Thursday's indictment of his business and one its top executives. Two entities operating as the Trump Organization were indicted by the New York Attorney General and Manhattan District Attorney. They are accused of providing cars, apartments and tuition for private schools, as well as bonuses to employees. They also failed to report the income payments as income. The Trump Organization allegedly was able to hide benefits that were provided to employees and thereby avoid paying payroll taxes. This allowed employees to artificially lower their taxable income. Weisselberg is accused of hiding approximately $1.7million of his compensation from tax authorities.Although defense lawyers dismissed these charges as unjustified and inappropriate, the crimes are serious. This is how rich people steal money, as I discovered during my time as a federal prosecutor. Although the means may be more sophisticated than a person with a gun standing on a street corner in the middle of nowhere, the purpose is the exact same. This is why grand larceny is one of the charges.Trump is not listed as a defendant but he does own the corporation, which is subject to significant criminal exposure. Corporate defendants are not eligible to go to prison. However, they can be assessed penalties, fines and restitution for back taxes. Trump may also be subject to legal fees to defend his business against the charges. These costs will directly impact his pocketbook.Continue the storyThe collateral consequences of the criminal conviction could make it even more expensive. The Trump Organization's money is made in real estate and construction, which are highly leveraged industries that require loans to participate in deals. The Trump Organization could have a harder time borrowing money if it is under criminal indictment. A bank may refuse to approve new loans to a company that is under investigation. A business under investigation could make it more difficult to obtain insurance coverage. This is due to the increased risk and potential for a monetary judgement against it. Certain policies have clauses that allow insurance companies to renege on their obligations in the event of criminal charges being filed. Trump Organization may find it more difficult to maintain its current operations due to limitations on capital and loss of insurance coverage.These consequences are not the only ones. The reputation of Trump is also likely to be damaged. Trump Organization uses the Trump name to promote hotels, resorts and golf courses as well as wine and other products. A criminal indictment could damage the brand and reduce its value, leading to lost revenue.It is possible that additional charges will be added to the indictment. Attorney General Letitia Jam stated that the investigation was ongoing and that additional charges could be brought against Trump. This would match the information given by Michael Cohen, a former Trump attorney, in which he testified before Congress that Trump regularly manipulated assets' value to suit his own purposes. He increased the assets' value for the purpose of obtaining loans, and decreased the assets' value for the purpose of paying taxes. According to reports, another area of inquiry could be the payment of hush to Stormy Daniels for her silence regarding an alleged extra-marital affair that occurred leading up to 2016 and falsifying business documents in order to hide the payment. Cohen was sentenced to eight years imprisonment. These inquiries could lead to additional financial penalties for the company if they are found to be true. These charges, unlike Thursday's indictment on Thursday, could go beyond corporate entities to name Trump as a defendant. This could expose him to financial penalties and even prison.Trump may not find any of this important politically. Trump's base members have proven themselves loyal supporters and a criminal conviction may serve to rally support rather than damage his reputation. Trump, who has called the New York investigation a witch hunt and suggested that he could use the indictment to encourage donors to help his legal defense. After Thursday's arraignment, a spokesperson for Trump Organization stated that the charges were politically motivated and inappropriately used a large and unchecked amount of power by local prosecutors to target a political opposition. This is just the right language to fuel the base and generate money. Trump doesn't miss an opportunity to raise funds from donors. He raised more than $200 million in one month, after losing the November elections.However, if Weisselberg or the Trump Organization are convicted for crimes, his support base will cease to exist. Trump will be more concerned about lost profits if the evidence trail leads him to criminal charges.
