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Speaker 1: This is Bloomberg Law with June Brussel from Bloomberg Radio.

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Speaker 1: For the first time a Trump business has been convicted

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Speaker 1: of criminal conduct. After a month long trial, a New

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Speaker 1: York jury convicted the Trump Corps and Trump Payroll Corps

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Speaker 1: of all seventeen counts against them, including a scheme to defraud, conspiracy,

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Speaker 1: criminal tax fraud, and falsifying business records. Manhattan District Attorney

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Speaker 1: Alvin Bragg took a victory lap on CNN. It's consequential

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Speaker 1: and have the namesake company of a former president of

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Speaker 1: the United States held accountable by a jury by way

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Speaker 1: of a criminal conviction. At trial, prosecutors proved a scheme

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Speaker 1: that allowed executives such as former chief financial officer Alan Weisselberg,

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Speaker 1: to evade taxes on company paid perks, including free apartments

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Speaker 1: and luxury cars, for more than a decade. And then

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Speaker 1: when we look at the con here, um, you know

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Speaker 1: it's tax fraud, but really it's it's cheating, it's lying,

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Speaker 1: it's greed. Joining me is Bloomberg Legal reporter Patricia Hurtado,

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Speaker 1: who covered the trial, that tell us about some of

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Speaker 1: the evidence that convinced the jury. The evidence showed that

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Speaker 1: the employees, including many high ranking executives, got kerk's, and

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Speaker 1: I'm talking about the company's CFO, Alan Weisselberg, the chief

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Speaker 1: operating officer, Matthew Calamari Senior. Many of these men, they

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Speaker 1: would get perks like apartments that the company would pay

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Speaker 1: for that the employees didn't pay taxes on. Many of

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Speaker 1: them got his and her Mercedes senses for themselves and

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Speaker 1: their wives. Many of them got parking paid for in

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Speaker 1: their apartment buildings, as well as their car licenses and

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Speaker 1: registration carried forward. They never pay taxes on many of them,

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Speaker 1: even like Wifelberg got the flat screen TVs and furnished

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Speaker 1: his Flurida condo with furniture and with parpening from ABC Carpets.

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Speaker 1: You know, it was a very nice way of living.

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Speaker 1: If you were a Trump executive, you got these kerks,

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Speaker 1: and then they claimed they were quote unquote backing them

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Speaker 1: out of their salary, so they would get like a

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Speaker 1: hundred thousand dollars worth of perk, but they were getting

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Speaker 1: them deducted from their salary, and then they were not

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Speaker 1: paying state and federal taxes. Tell me about Wiseelberg's testimony,

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Speaker 1: because he was the prosecution star witness, but it sure

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Speaker 1: seemed like he was reluctant to be there. Yeah, I mean, basically,

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Speaker 1: the prosecutors elicted at that Wifelberg as well as the

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Speaker 1: current company controller. They're all on the Trump payroll. They're

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Speaker 1: still being paid, They're still on the books as employees.

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Speaker 1: Weifelberg hopes to collect his annual bonus of another four

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Speaker 1: hundred thousand dollars at the end of this year. The

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Speaker 1: d A was arguing they were beholden still to the

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Speaker 1: Trump company and wanted to inflict his little damage upon

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Speaker 1: their employer, the Trump organization. So they were very careful

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Speaker 1: in what they said, especially Weisfelfer, who has an agreement.

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Speaker 1: It was in a cooperation agreement with the d A

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Speaker 1: per se, it was just an agreement to testify truthfully.

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Speaker 1: So both sides try to elicit the testimony from him

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Speaker 1: that supported their case. What's the likely sentence, Well, both

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Speaker 1: of the companies now face what is estimated to be

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Speaker 1: a grand total of one point six million dollars and

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Speaker 1: fine for not having their employees paying taxesn't for being convicted.

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Speaker 1: Some may say, well, that's paltry for a company like

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Speaker 1: Trump ord Why does it matter, but it's a huge

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Speaker 1: paint on the good name and goodwill of the company

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Speaker 1: that belongs to the former president. He obviously was tweeting

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Speaker 1: about it and complaining that he knew nothing of this fraud.

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Speaker 1: Some people are suggesting to us that it may make

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Speaker 1: it more difficult for the company to do business because

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Speaker 1: some lenders and possibly partners may not want to do

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Speaker 1: any business anymore with the Trump Org and its entities

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Speaker 1: because of this conviction, because why would you want to

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Speaker 1: do business with a felon. In a statement, Trump said

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Speaker 1: that this was all about Alan Weisselberg committing tax fraud

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Speaker 1: on his own for himself. Quote. He and every witness

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Speaker 1: repeatedly testifying that President Trump and the Trump family knew

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Speaker 1: nothing about his actions. But pat wasn't there evidence at

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Speaker 1: trial that Trump knew about the scheme? Signed checks, They

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Speaker 1: showed ledgers or memos where Trump was personally Okaine certain

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Speaker 1: bonus payments, and you saw his you know, signature and

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Speaker 1: initial with the black sharky Okaine, these payments. He saw

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Speaker 1: him approving certain executive getting carly. There were three employees

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Speaker 1: that testified for the prosecutors, and the testimony showed that

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Speaker 1: basically Donald Trump had to and did approve and sign

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Speaker 1: every check over. So when you start thinking about what

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Speaker 1: would Donald Trump see and what came across his death,

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Speaker 1: that's obviously many of these payments, like including payments to

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Speaker 1: these leases for these Mercedes ben were approved by Donald Trump.

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Speaker 1: There was also evidence that shows he had had conversations

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Speaker 1: with Wifelberg about getting an apartment for him paid for

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Speaker 1: by the Trump corporation. So there were many indications that

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Speaker 1: Trump knew and the amazing moment at the trial. For days,

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Speaker 1: repeatedly the defense had solicited questions, did Donald Trump no, no,

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Speaker 1: he didn't know where the witness would answer, And then

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Speaker 1: the d A had evidence showing Donald Trump had signed

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Speaker 1: something or approved something, or sanctioned something, or conversations like

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Speaker 1: he had with Wifelberg. We said, you should have an apartment.

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Speaker 1: Your wife not there. It's terrible for you to go

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Speaker 1: home to a cold house in Lawn Island. It's such

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Speaker 1: a long time for you to be on the Long

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Speaker 1: Island railroad home. So why don't you get in an

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Speaker 1: apartment in Manhattan and you can work longer hours. So

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Speaker 1: different were stations that witnesses cited indicating Donald Trump personally knew,

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Speaker 1: and Donald Trump was personally paying for Wifelberg first one

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Speaker 1: grandchild and then a second grandchild, a private school truition,

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Speaker 1: which is quite of a big trunk of change, and

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Speaker 1: the juror saw of those checks authorizing the payment by Trump.

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Speaker 1: And then later on when Trump became president, who took

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Speaker 1: over Eric Trump and Donald Trump Jr. So Weiselberg testified, yes,

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Speaker 1: there it was. I had to go to Eric and

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Speaker 1: Don and they signed the check authorizing the payment for

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Speaker 1: the private school tuition. And then during the closing arguments,

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Speaker 1: the prosecutor actually argued that Trump knew exactly what was

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Speaker 1: going on. Joshua Steinlass said, this whole narrative that Donald

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Speaker 1: Trump is blissfully ignorant is just not real. Actually it

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Speaker 1: was stunning because he got up at one point and

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Speaker 1: he said, I'm going to argue now that Trump knew,

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Speaker 1: and defense got up there and said objection, objection. There

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Speaker 1: was an instruction that your prosecution was model out to

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Speaker 1: argue Trump mayor because Trump son died it and he's

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Speaker 1: got at the defense table and the judge told them, well,

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Speaker 1: you're the one that brought Donald Trump into this discussion.

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Speaker 1: You kept saying he didn't know. Well, now the DA

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Speaker 1: gets to argue to the jury what they have that

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Speaker 1: he did know that you opened the door. So they

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Speaker 1: basically fell into the trap of the just now allowing

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Speaker 1: the prosecutors to start arguing and show evidence. To prosecutors

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Speaker 1: noted Trump actually had an open door policy. He actually

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Speaker 1: enjoyed talking to employees as a rump corporation and hearing

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Speaker 1: about what was going on at his company. Jeff mcconne

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Speaker 1: could have blown the whistle at any time, yet he

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Speaker 1: never went to Trump and said, your CFO is making

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Speaker 1: me commit fraud. Your CEO is also making me commit fraud.

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Speaker 1: This wasn't just McConney following orders. He wasn't just a soldier.

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Speaker 1: He was a co conspirator. And the other reasons he

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Speaker 1: didn't walk down the hall to blow the whistle is

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Speaker 1: because he undoubtedly knew what you almost already at least

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Speaker 1: to say that Donald Trump knew exactly what was going

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Speaker 1: on with his top executive. And that was a pretty

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Speaker 1: dramatic moment. The Manhattan d A. Alvin Bragg is taking

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Speaker 1: victory lapse. But the question is, with all this evidence,

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Speaker 1: why didn't he prosecute Trump? Here? That's a great question,

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Speaker 1: and a colleague of mine tried to ask Brag that

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Speaker 1: question after the verdicts of seventeen counts in just a

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Speaker 1: near ten hours of deliberations, don't you have any regrets

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Speaker 1: about not pursuing a case against Donald Trump in this

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Speaker 1: case too? And he walked out and would not answer that.

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Speaker 1: Brag now says that the investigation is continuing and this

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Speaker 1: trial is just one chapter in it. But he had

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Speaker 1: dropped the ball on the prosecution of Trump, and that

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Speaker 1: was very well publicized. Now he's back on track. Well,

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Speaker 1: he has insisted throughout this entire time period and also

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Speaker 1: in the middle of the turmoil and controversy over the

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Speaker 1: quitting of these two senior prosecutors who were doing this

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Speaker 1: Trump investigation. Now that Trump investigation allegedly also involved Trump's

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Speaker 1: valuation of assets and inflating of his assets. That's part

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Speaker 1: of this two hundred fifty million dollar lawsuit that's been

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Speaker 1: brought by the New York Attorney General with Titia Jane.

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Speaker 1: So those two prosecutors, including one Mark pomerant or season

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Speaker 1: former federal prosecutor, and he gave an interview in a

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Speaker 1: podcast where he said, of Trump, did anybody else that

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Speaker 1: John Doe Trump would have been indicted, but that they

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Speaker 1: wouldn't pull the trigger on him. He basically alleged that

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Speaker 1: Brad lost his will and it seemed like all was

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Speaker 1: given up because they've only indicted Allen Weisslberg's and the

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Speaker 1: company in this tax rod case and they did not

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Speaker 1: bring a criminal case against Donald Trump for his family

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Speaker 1: for the valuation of assets. I guess we'll see if

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Speaker 1: they bring a case in the future. Thanks Pat. That's

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Speaker 1: Bloomberg Legal reporter Patricia hard Otto. The music industry is

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Speaker 1: firing a warning shot at brand owners and influencers on TikTok.

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Speaker 1: Don't use our music without first getting a license. The

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Speaker 1: music industry is cracking down legally on brand owners that

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Speaker 1: use unlicensed songs in social media posts, sending a warning

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Speaker 1: to companies looking to capitalize on the explosive growth of

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Speaker 1: TikTok and other short form video sharing platforms. Joining me

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Speaker 1: is Bloomberg Law reporter Isaiah Poretz, who has written about this.

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Speaker 1: Tell us about the energy drinkmaker Bang and what it

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Speaker 1: went through with music lawsuits. So, Bang Energy is an

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Speaker 1: energy drink maker. They make drinks very similar to Monster

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Speaker 1: Energy or Red Bull that they compete in the same market,

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Speaker 1: and over the past two years they've achieved enormous marketing

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Speaker 1: success by hiring influencers and promoting their products not commercial advertising,

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Speaker 1: but on social media platforms like TikTok and Instagram, where

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Speaker 1: they're able to catch on to various music trends or

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Speaker 1: dance trends, and they've seen explosive growth that way. But

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Speaker 1: the problem was that they didn't obtain a license to

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Speaker 1: use that music in more than a hundred of their videos,

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Speaker 1: and so they were hit with lawsuits from all three

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Speaker 1: of the major US record labels, Warner Music, Stony Music,

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Speaker 1: and Universal Music, and they are found libel for coprate

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Speaker 1: infringement in two of those cases. Um and those cases

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Speaker 1: are now paused because ban is going through bankruptcy, but

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Speaker 1: it certainly is a warning for other brands that are

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Speaker 1: looking to use the most popular music in any type

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Speaker 1: of video that promotes their product. TikTok has a licensing

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Speaker 1: deal with several major record labels. What kind of deal

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Speaker 1: do they have and why isn't that good enough to

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Speaker 1: cover these Yes, so they have over the past few

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Speaker 1: years created licensing deals with the major record labels which

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Speaker 1: allow ordinary uses to access the very vast audio library

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Speaker 1: with the trendiest songs. But the problem is, if you

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Speaker 1: read the terms service and get into sort of the

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Speaker 1: nitty gritty of how exactly you can use that music,

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Speaker 1: it does say that that music and content that TikTok

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Speaker 1: provides is only for personal or non commercial use. So

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Speaker 1: if you're a brand or even ordinary individual creator who

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Speaker 1: is trying to promote a product and you put that

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Speaker 1: product in a video you think it to the latest

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Speaker 1: hit of the day, you need an additional license to

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Speaker 1: use that song, so that that larger music library only

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Speaker 1: covers personal use. TikTok does have a commercial library which

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Speaker 1: has all royalty for music, so you don't need to

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Speaker 1: get a license to use that. Um. But the problem

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Speaker 1: is that only contains sort of about half in leen songs,

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Speaker 1: which is a lot less than larger library, and um,

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Speaker 1: it doesn't have the most popular songs. You spoke to

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Speaker 1: one lawyer who said that people are confused about what

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Speaker 1: they can and can't do. Yeah, So the lawyers that

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Speaker 1: I spoke with, you know, the ones who consult with

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Speaker 1: various brands about these sort of baloxial property related issues

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Speaker 1: and marketing issues. Um, a lot of them said, especially

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Speaker 1: smaller brands, they kind of see that other brands or

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Speaker 1: that other people are hopping onto various TikTok trends that

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Speaker 1: go viral very quickly, and they kind of assume that

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Speaker 1: they can use the music um and whichever way they want,

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Speaker 1: which certainly isn't the case. They need to obtain a

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Speaker 1: separate license to use some of the most popular music,

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Speaker 1: which also is not a very easy task. You have

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Speaker 1: to reach out to multiple different people to obtain that license.

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Speaker 1: What's the line between commercial use and personal use, you

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Speaker 1: know with TikTok? Yeah, so I think that's where it

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Speaker 1: does get a little bit more complicated, and and that

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Speaker 1: line can't be blurry. You know, if you're using or

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Speaker 1: promoting a product in any way, I think that is

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Speaker 1: clearly sort of a commercial use. But um, one of

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Speaker 1: the lawyers I spoke with said it it becomes more

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Speaker 1: uncertain when you know, you might be a content creator

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Speaker 1: who is doing a product review that was not sponsored

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Speaker 1: by the product maker, but then you still make money

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Speaker 1: from the social media platform for the amount of views

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Speaker 1: you get, you know, is that commercial use? I think

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Speaker 1: it's not entirely clear. Yet it sounds like okay, well,

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Speaker 1: there are all these organizations whose job it is to

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Speaker 1: license rights for artists, etcetera. And there are music labels.

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Speaker 1: Why is the licensing so complicated? Yeah, So in the

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Speaker 1: licensing music licensing industry, there are certain circumstances where, um,

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Speaker 1: you know, let's say you're a restaurant that wants to

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Speaker 1: play music or a bar that wants to play music. Um,

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Speaker 1: you can very easily obtain a license that covers literally

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Speaker 1: millions and millions of songs, um, just through a one

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Speaker 1: stop shop. UM. But because of how the licensing laws

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Speaker 1: work in the US, when it comes to using music

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Speaker 1: that is synchronized with video, which is what the cases

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Speaker 1: with these social media platforms. UM, that's where it enters

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Speaker 1: this area of you have to bargain individually with each

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Speaker 1: copyright holder, which can get very complicated, especially with music,

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Speaker 1: because songs traditionally have two copyrights attached to them. One

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Speaker 1: protects the musical composition, which is the sheet lyrics, the

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Speaker 1: sheet music and the lyrics. One protects the sound recording. UM.

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Speaker 1: So those are often owned by separate copyright holders, so

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Speaker 1: we have to reach out to both of them. There

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Speaker 1: can be multiple people who wrote a song together and

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Speaker 1: they can each be represented by different music publishing publishers.

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Speaker 1: So it all becomes super complicated. Um, and it definitely

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Speaker 1: makes it much more difficult if you're a small brand

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Speaker 1: to obtain a license. I was interested in in the

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Speaker 1: Bang lawsuit, you write that copyright violations are strict liability,

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Speaker 1: but the judge couldn't determine whether Bang should face additional

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Speaker 1: liability based on its knowledge. So what was that about? Yeah?

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Speaker 1: So UM, the question where the judge couldn't make a

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Speaker 1: determination at this point was whether or not kick Talk

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Speaker 1: or whether or not Baning Energy should face additional liability

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Speaker 1: because it encouraged or it it allowed its influencers on

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Speaker 1: their own accounts to use music that promoted the Bang

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Speaker 1: Energy drinks without a license. Um. And in that type

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Speaker 1: of secondary liability of should Bang based additional finds because

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Speaker 1: it encouraged others to violate copyright? Um. That requires a

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Speaker 1: different level of knowledge. So in that case, UM, the

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Speaker 1: music record labels needs They need to show that Bang

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Speaker 1: knew that the influencers or violating copyrights. UM for being

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Speaker 1: itself and for bying his own TikTok account. Uh, that's

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Speaker 1: a strict liability. So even if saying I didn't realize

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Speaker 1: that that the songs that we're using were unlicensed and unauthorized. Um,

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Speaker 1: it doesn't matter being was using them. That's a violation

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Speaker 1: of prop right law. Um. It's again slightly different with influencers,

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Speaker 1: and that again is not quite as resolved as the

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Speaker 1: law I think. So, how many other companies are facing

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Speaker 1: lawsuits over the use of you know, music that is unauthorized. Yeah,

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Speaker 1: so Jim Stark, Uh, they they are a company that

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Speaker 1: also became very popular on social media that makes various

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Speaker 1: Jim clothing. Uh, they were sued a year or two

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Speaker 1: ago and they had to settle that suit. And then

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Speaker 1: just recently in the past couple of weeks, Warner Music

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Speaker 1: sued a UK based makeup and skincare group called Iconic

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Speaker 1: London for the sayings the issue of copyright infringement and

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Speaker 1: the lowers of spook Too said that they may see

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Speaker 1: an increase in the number of UM lawsuits relating to

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Speaker 1: brands using music for commercial purposes. So, just to make clear,

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Speaker 1: the average person who's going to make a TikTok video

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Speaker 1: can use any music they want in the video. They

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Speaker 1: can use any music they want that's available on the

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Speaker 1: TikTok platform, that that the audio library, which is quite

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Speaker 1: large UM, is covered by the licensing deals UM and

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Speaker 1: that they would not talk to worry about any lawsuit

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Speaker 1: from the record labels. Thanks so much, Isaiah. That's Isaiah

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Speaker 1: Port's Bloomberg Law Reporter, and that's it for this edition

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Speaker 1: of The Bloomberg Law Show. Remember you can always get

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Speaker 1: the latest legal news on our Bloomberg Law Podcast. You

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Speaker 1: can find them on Apple Podcasts, Spotify, and at www

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Speaker 1: dot Bloomberg dot com slash podcast Slash Law, And remember

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Speaker 1: to tune into The Bloomberg Glass Show every week night

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Speaker 1: at ten b m Wall Street Time. I'm June Grosso

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Speaker 1: and you're listening to Bloomberg m