Trump’s Hush-Money Case – Trodden Legal Ground to New Frontiers

May 3, 2024Supply Chain Chronicles

How would you rule? – There’s Hush Money, Concealment, and Subterfuge; But Establishing Fraud Isn’t So Cut-and-Dried.

If a political candidate dodges a scandal with hush money paid through his attorney, then mislabels the repayment installments, has he defrauded the voters?

Currently in the New York Supreme Court, Donald Trump faces criminal fraud charges for falsifying business records to conceal a crime. Setting aside any pro- or anti-Trump sentiment, this case treads some familiar ground on its way to something new, and may just include a cautionary tale about venturing into the legal unknown.

Manhattan DA Bragg alleges that after Trump’s attorney Michael Cohen paid $130,000 to silence Stormy Daniels on Trump’s and her alleged affair, Trump then committed 34 acts of felony fraud by deviously labeling reimbursement payments to Cohen as “retainer for services rendered”.

This harkens back to the 1994 case U.S. v. D’Amato, where an attorney was hired by a corporation to lobby his U.S. senator brother, though on the record he was paid to “report on Congressional Proceedings.” After a fraud conviction in the Federal District Court, it was vacated for insufficiency by the Second Circuit Court of Appeals.

The finding was that the concealment and mislabeling didn’t constitute fraud, as the interested parties were cognizant of the arrangement, behaved accordingly in good faith, under no false pretenses, without personally benefitting, and not in the furtherance of illegal acts.

Now we have another case with political overtones concerning a lawyer’s payment and seemingly analogous circumstances.

BUT… (one of several times) the plot thickens. That latter factor – “furtherance of illegal acts” may come into play.

Falsifying business records is a misdemeanor in New York unless it facilitates another “underlying crime”. This would be the hush money payment, right? Nope. That’s not illegal in New York.

There may, however, be another party in the mix – the American voters. The claim is that the falsifications benefitted Trump’s election prospects, violating federal election interference law.

This is truly unprecedented juridical territory; the charges concern state law infractions, that depend on a finding of federal law violations. In a scathing initial op-ed, Boston law professor Jed Shugerman called this “stretching jurisdiction”.

Shugerman has since come around, and legal experts continue to be split on the merits and possible outcome of the case as jury selection continues. Time will tell.

How Would You Rule?

In such cases, where the legalities are ill-defined and untested by trial, your best bet is probably to avoid the risks, costs, and uncertainty of litigation; which can be sidestepped with a robust built-in legal risk management team on your side, ready to go to bat for you.

Need a legal risk management team on your side?

Contact Commerce Law Partners today and Prepare to Win.

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