Former President Donald Trump faces criminal charges in Manhattan, and a Delaware limited liability company is likely at the center of those charges.
He is the first former president in U.S. history to be charged with criminal offenses.
Trump was arraigned on multiple felony charges in Manhattan on Tuesday following his Thursday indictment by a grand jury that had been investigating hush money payments to two women who claimed to have had affairs with him, multiple news outlets have reported.
News about the potential charges has been trickling out long before the indictment was handed down. Specifically, the former president is under investigation for hush money payments to two women who claimed to have had sex with him. That includes a $130,000 payment made ahead of the 2016 election reportedly made to silence an adult film star about their affair.
LIVE UPDATES: Donald Trump lands in New York to face criminal charges
The Delaware connection
The seedy business believed to be at the center of Trump’s indictment was routed through limited liability companies set up in Delaware. Two companies created in 2016 by Trump’s former personal attorney, Michael Cohen, were used to pay off Daniels, as well as a national tabloid, to not publish details about another alleged affair.
Two weeks before the 2016 general election, Cohen created Essential Consultants LLC to funnel $130,000 in what he would later call “hush money” to former adult film star Stephanie Clifford, professionally known as Stormy Daniels. He told investigators the payments were made at Trump’s behest and that he was reimbursed by Trump in a way that hid the true purpose of the payments.
The previous month he had created Resolution Consultants LLC with the intention, according to federal prosecutors, of reimbursing the National Enquirer’s parent company for its $120,000 purchase of a story from former Playboy Playmate Karen McDougal about her intimate involvement with Trump.
Those payments were made public in a 2018 article published by the Wall Street Journal after Trump was elected.
Later that year, Cohen was charged by federal prosecutors with evading taxes and making unlawful campaign contributions, among other counts tied to the payment to Daniels. Cohen would later plead guilty to the campaign contribution charge and serve time in prison.
Why form a company in Delaware?
To create the Delaware LLCs, Cohen employed the help of a local company that registers and maintains entities on behalf of their beneficial owners. Known as a corporate capital, Delaware is the legal home to over 1 million business entities.
For some, the relative anonymity of beneficial owners and quickness is a selling point for forming a limited liability company in Delaware. Some of those companies have been used in the highest-profile global money laundering schemes in recent decades.
However, it’s not really clear why Cohen used Delaware LLCs to route money to Daniels. Cohen signed his name on Essential Consultants incorporation certificate, though state law would have allowed him to list a registered agent for the company.
SHELL GAMES: Delaware dissolves shell companies created to pay off women by Trump-fixer Michael Cohen
In a largely symbolic move, the Delaware Attorney General’s Office filed a complaint in 2019 in the state’s Court of Chancery seeking to cancel the registration of Cohen’s two Delaware LLCs “because a corporate officer of each of the Defendants has pleaded guilty, and thus confessed, in federal courts.”
The Delaware attorneys asserted that the companies had been used to purchase Clifford’s and McDougal’s “silence and prevent her story from influencing the election.” A state judge ordered the dissolution of Essential Consultants LLC and Resolution Consultants LLC in 2020.
What is Trump charged with?
Donald Trump pleaded not guilty Tuesday to 34 felony counts of falsifying business records in connection with thousands of dollars in hush money payments to multiple people, according to reporting by USA Today.
The case brought by Manhattan District Attorney Alvin Bragg went beyond the $130,000 hush money payment to Daniels, to include a $30,000 payment to a former Trump Tower doorman, “who claimed to have a story about a child Trump had out of wedlock,” prosecutors asserted.
Prosecutors referenced another $150,000 payment, which appeared to track a separate allocation to McDougal to silence her about an alleged long-running affair before the 2016 election.
Trump, prosecutors said, “falsified New York business records to conceal crimes that hid damaging information from the voting public during the 2016 presidential election.”
Trump has denied wrongdoing and pleaded not guilty to the charges in a Tuesday arraignment hearing.
Other ongoing investigations
The indictment of Trump comes as he campaigns for the 2024 Republican presidential nomination and as he is being investigated for other potential crimes.
In Georgia, state authorities are conducting a criminal investigation into election fraud. The evidence includes a recorded call to state Secretary of State Brad Raffensperger asking him to “find” the votes to overturn the results for President Joe Biden.
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Federal officials are also probing Trump’s involvement in the Jan. 6, 2021, insurrection at the U.S. Capitol, his alleged efforts to overturn the election result in his favor as well as the former president’s handling of classified documents.
Contact Xerxes Wilson at (302) 324-2787 or xwilson@delawareonline.com. Follow @Ber_Xerxes on Twitter. Related for Subscribers.
