MW Cooking the books: Pals Donald Trump and Vince McMahon both resolve hush-money cases

By Lukas I. Alpert

Trump is sentenced to no jail time for covering up payments to women, while McMahon settled with the SEC for similarly hiding payoffs from WWE's books

In this corner, two billionaire entertainment titans writing checks to make embarrassing stories of affairs go away - and in the other corner, prosecutors and regulators who called those acts cooking the books.

Both soon-to-be president Donald Trump and former wrestling kingpin Vince McMahon resolved their hush-money cases on Friday, each receiving what amounted to a slap on the wrist for their efforts to bury those payments.

Ultimately, both of the the cases - involving two men, both 78, who have long been friends - centered on accounting irregularities at their companies that were the result of trying to hide the payments from public scrutiny.

After losing a last-minute effort to get the Supreme Court to block the final penalty hearing in the case, Trump was given an unconditional discharge - meaning no jail time - at a hearing on Friday morning after being convicted last year of 34 counts of falsifying business records.

The result, however, does mean Trump will be the first person ever to enter the presidency as a convicted felon when he takes office on Jan. 20.

New York Supreme Court Justice Juan Merchan acknowledged the unprecedented nature of the case as he rendered the sentence. Trump appeared virtually at the hearing from Florida.

"Never before has this court been presented with such a unique and remarkable set of circumstances," Merchan said.

Trump insisted, as he had throughout the trial, that he was "totally innocent," saying, "I did nothing wrong."

"It's been a political witch hunt," the president-elect said. "It was done to damage my reputation so that I would lose the election, and obviously, that didn't work."

McMahon, who stepped down as chief executive of World Wrestling Entertainment following allegations he paid millions of dollars to women who accused him of sexual misconduct, reached a settlement with the Securities and Exchange Commission on Friday to pay a fine for using company money to make the payments and not disclosing those payments to the board or to shareholders.

"Company executives cannot enter into material agreements on behalf of the company they serve and withhold that information from the company's control functions and auditor," said Thomas P. Smith Jr., associate regional director of the SEC's New York office.

In a statement on X, McMahon said he was happy the matter was resolved.

"In the end, there was never anything more to this than minor accounting errors with regard to some personal payments that I made several years ago while I was CEO of WWE. I'm thrilled that I can now put all this behind me," he said.

Trump had been accused of illegally covering up payments made to buy the silence of people who alleged he had engaged in extramarital sexual encounters, in an effort to keep damaging information from surfacing before the 2016 presidential election.

At the heart of the matter was a $130,000 payout to adult-film star Stormy Daniels, who tried to sell her story of an alleged sexual liaison with Trump to the National Enquirer. Trump denied the encounter ever took place and argued that the case, brought by Manhattan District Attorney Alvin Bragg, a Democrat, was politically motivated.

The crux of the case centered around checks to reimburse his personal lawyer, Michael Cohen, for making the payment to Daniels, and a series of ledger entries that recorded them.

Prosecutors said Trump agreed to pay Cohen $35,000 a month for a year to cover what he had paid Daniels, along with $50,000 for an unrelated service, an additional $180,000 to cover any tax liabilities so that Cohen could claim the hush-money reimbursement as income, plus a $50,000 bonus.

To cover the money up, prosecutors say Trump and his chief financial officer listed the payments as "legal services rendered" in the Trump Organization's ledger books.

That sleight of hand amounted to a crime of falsifying business records, Bragg said, hitting Trump with 34 counts - one for each of the checks as well as for each misleading ledger entry.

In McMahon's case, the SEC said he had engineered payments of $7.5 million and $3 million to two women who had accused him of sexually abusing them. The agency said McMahon, who was then the WWE's CEO and majority shareholder, had taken the money from the company's coffers but never informed the board or its lawyers and accountants.

That led the company to materially misstate its earnings in two separate years to pay McMahon more money than he was owed, as his compensation was based on the company's performance.

As part of the settlement, McMahon has agreed to pay a $400,000 fine and to reimburse the WWE $1.33 million.

In 2022, in the wake of the scandal, McMahon stepped down from any management role at the WWE. He briefly returned as executive chair to help orchestrate the company's merger with Ari Emanuel's Endeavor Group Holdings and Zuffa LLC, the parent company of the Ultimate Fighting Competition, to become TKO Group Holdings, Inc. $(TKO.UK)$

McMahon has since resigned from the new company, in which he is a minority shareholder.

McMahon's longtime wife, Linda McMahon, from whom he recently separated, has been named by Trump as his nominee to lead the Department of Education. She headed the Small Business Administration during Trump's first term.

-Lukas I. Alpert

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January 10, 2025 12:22 ET (17:22 GMT)

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