Prosecutors did not indict the former president, but they invoked him throughout the monthlong trial. The Trump Organization had been his springboard to fame and power.
The Trump Organization, the family real estate business that made Donald J. Trump a billionaire and propelled him from reality television to the White House, was convicted on Tuesday of tax fraud and other crimes, forever tarring the former president and the company that bears his name.
The conviction on all 17 counts, after more than a day of jury deliberations in State Supreme Court in Manhattan, stemmed from the company’s practice of doling out off-the-books perks to executives: They received luxury apartments, leased Mercedes-Benzes, extra cash at Christmas, even free cable television. They paid taxes on none of it.
The Manhattan district attorney’s office, which prosecuted the case, had previously obtained a guilty plea from the scheme’s architect, Allen H. Weisselberg, the company’s longtime chief financial officer. Mr. Weisselberg, one of Mr. Trump’s most loyal lieutenants, testified as the prosecution’s star witness but never implicated the former president.
Prosecutors did not charge Mr. Trump, but they invoked him throughout the monthlong trial, telling jurors that he had personally paid for some of the perks and had even approved a crucial aspect of the scheme. The prosecution sounded a drumbeat of damning evidence about a freewheeling culture at his company, revealing that pervasive illegality flourished there for years.
“We got to see the inner workings of the Trump Organization: the greed, the lies, the cheating,” the Manhattan district attorney, Alvin L. Bragg, said in an interview on Tuesday evening, reflecting on a victory that marked the height of his young tenure.
The verdict carries limited financial repercussions and will not directly threaten to imperil Mr. Trump’s company. But the conviction, and the prosecution’s explosive claim in closing arguments that Mr. Trump had been “explicitly sanctioning tax fraud,” could reverberate through his nascent 2024 presidential campaign, providing fodder for political opponents.
It is also expected to embolden Mr. Bragg as he intensifies his broader criminal investigation into Mr. Trump, which focuses both on his business practices and on hush money paid to a porn star who has said she had an affair with him, according to people with knowledge of the matter. Mr. Bragg came under fire earlier this year after he declined to seek an indictment of Mr. Trump.
It is unclear whether Mr. Trump will now face charges, but of all his legal entanglements, including two federal criminal investigations involving his final days as president, none has been as personally embarrassing as the district attorney’s inquiry.
In a relatively muted statement, Mr. Trump said he was “disappointed with the verdict” but planned to appeal. He blamed Mr. Weisselberg, saying the case was about his “committing tax fraud on his personal tax returns.”
The Trump Organization lamented in its own statement that it was being made accountable for Mr. Weisselberg’s crimes. “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 statement said.
Susan Necheles, a lawyer for the company, called the case “unprecedented and legally incorrect.”
The felonies — tax fraud, scheming to defraud, conspiracy and falsifying business records — are hardly a death sentence for the Trump Organization. A company cannot be imprisoned, and the Trump Organization is not publicly traded, meaning there are no financial regulators to punish it or public shareholders to flee from it. The maximum penalty it faces is $1.62 million, a pittance for Mr. Trump, who typically notched hundreds of millions of dollars in revenue during his presidency.
Still, the case will inflict reputational damage on the Trump Organization and the former president, whose identities are inextricably intertwined. While the company is well known for cutting corners, and reporters have extensively documented Mr. Trump’s ethical lapses over the years, the verdict branded it as a felonious enterprise — its greatest legal reckoning.
The conviction is the nadir of an already disastrous year for the Trump Organization: Its longtime accounting firm fired it, New York’s attorney general filed a fraud lawsuit against it and Mr. Bragg’s investigation grinds on.
“We can have no tolerance for individuals or organizations that violate our laws to line their pockets,” the attorney general, Letitia James said in a statement on Tuesday.
Mr. Trump has blamed the prosecution on politics and has accused Mr. Bragg and Ms. James, who are Black, of being racists. Even before the verdict was read, Mr. Trump said on his social media platform, Truth Social, that Mr. Bragg was “fighting a political witch-hunt for D.C.”
Mr. Trump’s attacks on prosecutors are a rallying cry for his voters — particularly as he embraces extremist elements of American society during a third run for president — but they may alienate lenders and business partners.
The case emerged from a wider investigation into the former president by the district attorney’s office, which has long been focused on the hush money and whether Mr. Trump fraudulently inflated the value of his properties to obtain favorable terms from lenders.
Seeking a company insider to testify, prosecutors turned to Mr. Weisselberg, who cut his teeth with Mr. Trump’s father, Fred Trump, a half-century ago. When Mr. Weisselberg resisted the pressure campaign, he was indicted in the tax-fraud case in 2021, along with two Trump Organization entities, the Trump Corporation and Trump Payroll Corporation.
The case against Mr. Weisselberg was barreling toward trial until he struck a plea deal with prosecutors in August. Mr. Weisselberg, who is on paid leave from the Trump Organization, declined to cooperate with the broader investigation into Mr. Trump but agreed to testify against the company.
At trial, the defense lawyers questioned Mr. Weisselberg’s motives for testifying, noting that his agreement with prosecutors called for him to spend as few as 100 days in jail.
Over two emotional days on the witness stand, Mr. Weisselberg admitted that he had reaped about $1.8 million in indirect and hidden compensation, allowing him to evade hundreds of thousands of dollars in taxes. The benefits included a rent-free apartment in a Trump building overlooking the Hudson River; leased cars for him and his wife; and private school tuition for their grandchildren.
Mr. Trump personally paid the tuition, Mr. Weisselberg testified, linking the former president to the broader scheme. To support the contention that Mr. Trump was “explicitly sanctioning tax fraud,” prosecutors produced a document he signed that they said showed him authorizing one of the scheme’s crucial elements: a reduction in salary for another executive who was receiving clandestine benefits.
Although no evidence emerged that Mr. Trump knew his executives had failed to pay taxes on the payouts, prosecutors noted that he was a hands-on boss, particularly when it came to money.
“This case is about greed and cheating,” Susan Hoffinger, the lead prosecutor, told the jury in opening arguments. By the trial’s end, the prosecution had argued that misconduct was pervasive throughout the Trump Organization, which “cultivated a culture of fraud and deception.”
If the company had any hope of acquittal, it rested on the cross-examination of Mr. Weisselberg, who admitted to betraying his employer and carrying out the scheme without Mr. Trump’s approval. Asked by a defense lawyer, Alan Futerfas, whether Mr. Weisselberg was embarrassed about his behavior, the executive, near tears, replied softly, “More than you can imagine.”
In closing arguments, Ms. Necheles told the jury that Mr. Weisselberg had repeatedly testified to acting for his own benefit, not to help the company or the Trump family. And the judge overseeing the case, Juan Merchan, explained to jurors that for the company to be guilty, Mr. Weisselberg could not have undertaken the scheme merely for his own personal gain.
Ms. Necheles argued that the prosecution had failed to meet that burden. She noted that when Mr. Weisselberg was asked on the stand about his motivation for deducting the value of his perks from his overall compensation, he said, “My intention was to save pretax dollars” — not to help the company.
The admission reinforced what became a mantra for the defense: “Weisselberg did it for Weisselberg!”
In his closing statement, a prosecutor, Joshua Steinglass, took aim at that refrain, arguing that “Both halves of that sentence are wrong.”
He added: “It was not just Weisselberg doing it, and it was not just Weisselberg benefiting from it.”
An alternate juror, interviewed on Monday evening after being dismissed from the case, said that she agreed with the prosecution that the scheme could not be distilled into a single phrase. The woman, who asked not to be identified because of concerns about online abuse, argued that there was little daylight between the company and its top executives. If benefiting them did not benefit the company, she said, what would?
The company was able to save a small amount on taxes by not reporting the perks to the tax authorities, the prosecution noted. And it paid those benefits instead of awarding bigger salaries, theoretically saving some money on compensation.
“It was a win-win — a way to get more money into executive pockets while keeping their own costs as low as possible,” Mr. Steinglass said. He argued that there was also a “tremendous amount of evidence” that Mr. Weisselberg had indeed intended to benefit the company, even if it was to a far lesser extent than himself.
The jurors spent about 10 hours deliberating, returning to the courtroom several times to request information. When their deliberations concluded, they seemed eager to deliver their verdict: They buzzed the courtroom four times to notify the judge that it was time to be heard.
The full fallout from the conviction is unclear.
The Trump Corporation and Trump Payroll Corp. are not central to Mr. Trump’s moneymaking enterprise. They essentially perform back-office functions, employing and paying top executives.
And although the reputational toll of felonies could make it harder to expand the company, the Trump Organization was already running in place. Rather than tackling new projects in recent years, the company has largely tended to its existing properties, including office and apartment buildings in New York, some hotels and 16 golf courses that it owns or manages.
That pullback was underway before the district attorney’s office opened its investigation into Mr. Trump in 2018. Under Mr. Bragg’s predecessor, Cyrus R. Vance Jr., the inquiry initially focused on the $130,000 payment to the porn star, Stormy Daniels, before pivoting to the broader examination of whether Mr. Trump inflated the value of his properties.
Late last year, Mr. Vance instructed the prosecutors to begin presenting evidence about Mr. Trump to a grand jury.
But soon after Mr. Bragg took office in January, he and his top aides developed concerns about proving that Mr. Trump had intended to break the law, a necessary element of proving the crime. Mr. Bragg balked at seeking an indictment, a decision that prompted the resignation of the two senior prosecutors leading the investigation and stirred a public uproar.
Things may be different now.
Mr. Bragg is expected to continue pursuing his investigation into Mr. Trump, and he has refocused on the hush money in recent months, The New York Times reported in November. His prosecutors are also seeking to apply renewed pressure on Mr. Weisselberg to turn on Mr. Trump.
“To me, this guilty verdict against the Trump Organization is not the end of, but just the beginning of juries holding the former president, his corporation and his inner circle accountable,” Mr. Vance said. “This was a good day for the Manhattan district attorney’s office.”