Jury begins deliberations in Trump trial: What to know about falsifying business records

Trump's legal fate hinges on a rarely discussed white-collar crime.

May 29, 2024, 12:40 PM

A jury began deliberations on Wednesday in a New York case against former President Donald Trump over his alleged role in hush money payments made to adult film star Stormy Daniels.

The criminal trial, the first for an ex-president in U.S. history, has drawn the nation's attention to a rarely discussed white-collar financial crime: falsifying business records.

As part of a scheme to reimburse former Trump attorney Michael Cohen for the payments to Daniels, Trump fraudulently recorded $130,000 in expenses as the cost of legal services for Cohen, prosecutors alleged.

Trump has pleaded not guilty and denied any wrongdoing. He has denied having sex with Daniels.

Here's what to know about the crime of falsifying business records and the typical penalties, according to interviews with New York City-based criminal defense attorneys.

What does falsifying business records entail?

Falsifying business records, a violation of New York state law, constitutes the entry of inaccurate information on a business document to benefit oneself.

In other words, a description of the crime is "sort of in the name," Adam Konta, a senior partner at Manhattan-based law firm Konta, Georges & Buza, told ABC News.

However, the crime of falsifying business records not only requires an incorrect entry on a company form but also an intent to mislead in an effort to reap reward.

"Every crime requires both an act and a criminal intent behind the act," Matthew Galluzo, a criminal defense attorney in New York City and a former prosecutor in the New York County District Attorney's Office, told ABC News.

If a boss asks a secretary to mark a form incorrectly and he or she does so without awareness of an attempt to mislead, the secretary is innocent of a crime, Galluzo said.

Similarly, an accidental or harmless recording error falls short of a crime, he added.

The most common example of the crime involves fibbing about a company's financial information for the sake of evading or minimizing tax payments, or in an effort to hoodwink potential investors, Galluzo said.

Michael Cohen leaves federal court in New York, Aug. 21, 2018.
Mary Altaffer/AP, FILE

Why is the alleged Trump crime a felony and how will prosecutors need to prove it?

The crime of falsifying business records constitutes either a misdemeanor or a felony, depending on the circumstances of a given violation, the attorneys said.

The act rises to a felony when the inaccurate record is entered as part of an effort to commit a different, underlying crime, the attorneys said.

The misdemeanor version of the crime usually means "destruction or falsification of business records," Konta said. "When you're doing that in hopes of committing a separate crime, then it's what's called a 'bump up.'"

The standard is akin to the legal treatment of trespassing, Konta added, noting that the mere act of trespassing is a relatively minor crime but the charge becomes far more serious if a trespasser attempts to steal.

In closing arguments on Tuesday, prosecutor Josh Steinglass said the underlying crime they are alleging as part of the falsifying records charge is that Trump violated New York state election law.

Trump committed "election fraud, by any means necessary -- lawful and unlawful," Steinglass said, telling jurors there is a "mountain of evidence" to prove it.

Judge Merchan sustained an objection from the defense regarding Steinglass' effort to explain the law of the case.

Defense attorney Todd Blanche tried to downplay prosecutors' theory of the case and emphasized that Cohen was Trump's attorney in 2017 and that the $35,000 paid each month over that year was Trump paying him for his services.

"Take a step back. Nobody disputes that Mr. Cohen was President Trump's lawyer in 2017," Blanche said. "So what makes more sense, that president was paying his personal attorney in 2017 the $35,000 per an agreement he made with his personal attorney?... Or the version that Mr Cohen said?"

What is the penalty for falsifying business records?

The maximum penalty for a felony count of falsifying business records is four years in state prison.

"However, there's no mandatory minimum sentence," Galluzo said.

Due to Trump's age and lack of a criminal history, a jail sentence of any length is unlikely if he is convicted, Galluzo added, noting however that the 13-month jail sentence served by Cohen in a related case potentially raises the possibility of incarceration for Trump.

In federal court, Cohen pleaded guilty to two violations of campaign finance law resulting from hush money payments made to Daniels and former Playboy model Karen McDougal. Trump also denies having sex with McDougal.

In addition, Cohen pleaded guilty to five counts of tax fraud and one count of false statements made to a bank.

Penalties in falsification of business records cases are often driven by the amount of money at stake in the potential fraud, Daniel Hochheiser, a criminal defense attorney in New York, told ABC News.

Trump is alleged to have reimbursed Cohen for $130,000 in hush money payments, though the statement of facts accompanying the indictment claims that then-Trump Organization Chief Financial Officer Allen Weisselberg agreed to a total repayment of $420,000, including other expenses and a year-end bonus.

"Somebody who makes a false business record in a $100,000 fraud is generally punished less severely than somebody who makes a false entry in a record involved in a scheme to commit a $10 million fraud," Hochheiser said.

"I don't see any scenario in which Trump goes to jail," Hochheiser added. "Even if he's convicted of everything."

ABC News' Aaron Katersky, Peter Charalambous, Olivia Rubin, Lucien Bruggeman and Julia Reinstein contributed to this report.

Related Topics

Trending Reader Picks

ABC News Live

ABC News Live

24/7 coverage of breaking news and live events

news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news