How charges against the Trump Organization could cramp Donald Trump's high-flying lifestyle

• Donald Trump wasn't charged in Thursday's indictments against his company and its CFO.
• But the charges will still give him financial headaches, legal experts say.
• Trump's personal finances are closely entwined with the company's, which now may hemorrhage deals.
• See more stories on Insider's business page.

Former President Donald Trump was not personally charged in Thursday's 15-count indictment against the Trump Organization and its CFO, but he is not out of the woods yet.

The Manhattan District Attorney's investigation is ongoing, and prosecutors still appear to be interested in Trump's personal role in possible tax fraud schemes. Cary Dunne, a prosecutor in the case, blasted Trump in court Thursday for downplaying the charges and said the alleged crimes were not "the act of a rogue or isolated employee." The indictment also said the former president personally signed checks that were under scrutiny.

While it may not be immediately evident, the 15-count indictment also is likely to hit the former president's wallet.

Trump's personal finances are closely entwined with the Trump Organization's. His high-flying lifestyle - living in his Mar-a-Lago estate in Florida, using his private jet, makeup and hairstyling - have all been categorized as business-related tax deductions, according to a New York Times analysis of his tax returns.

CFO Allen Weisselberg and Trump's two oldest sons, Donald Jr. and Eric, have led day-to-day operations at the Trump Organization ever since the former president relinquished some control in 2017. But Trump still holds vast power and on-paper oversight, and he remains an owner and shareholder of the company.

"If you kill the Trump Organization, basically you kill the Trump family's means of a rather extravagant high-profile and lavish lifestyle," Randy Zelin, a defense attorney at Wilk Auslander LLP and former New York state prosecutor, told Insider.

Banks may dump the company

Weisselberg and lawyers for the Trump Organization pleaded not guilty to Thursday's charges. But the company still may have an immediate problem with its lenders, according to legal experts.

Banks are highly regulated and will likely look at an indictment against a company as an excuse to back out of any deal, even if that company hasn't been convicted. The company will also have a hard time opening new bank accounts and lines of credit.

"The most initial impact on Trump himself will be financial," Anthony Capozzolo, a former prosecutor in the Manhattan District Attorney's office and a former federal prosecutor in Brooklyn, told Insider. "One of the biggest collateral effects of a company being indicted is its banking relationships and other business relationships because, immediately, all of those companies have obligations, especially banks that are highly regulated. They are obligated to not do business with companies breaking the law."

The Trump Organization has around $600 million in debt due over the next four years, according to Bloomberg News. Zelin said it will have an even harder time finding new lenders with the reputational damage and legal headaches the indictments introduce.

"The moment the Trump Organization is charged, every bank is going to treat that as an act of default," Zelin said. "No one will lend the Trump Organization a penny. You are essentially suffocating everyone who relies on the Trump Organization for their current standard of living."

However, the bulk of the company's debt - $330 million - is owed to Deutsche Bank, which does not plan to demand immediate repayment unless the Trump Organization is convicted of bank-related fraud, according to the New York Times. Thursday's charges did not include bank fraud.

The fines upon conviction, according to New York state law, would be around double the amount of unpaid taxes. While that would be a blow, it wouldn't be enough to bankrupt the company on its own.

It's going to be harder to make new deals

In recent years, the Trump Organization hit some rough patches.

It's a private company that doesn't need to make public financial disclosures, but since it's in the hospitality industry, its hotels, golf courses, and other businesses have no doubt been ravaged by the coronavirus.

Then many corporations cut ties with the Trump Organization following the January 6 insurrection at the US Capitol, when a mob of pro-Trump supporters sought to stop Congress from certifying the 2020 presidential election results. The company had already lost some partners following Trump calling Mexicans rapists and imposing a ban on people from Muslim-majority countries entering the US. While Trump was president, the company had also curtailed its exploration of foreign deals to limit potential conflicts of interest.

The companies still doing business with the Trump Organization may use an indictment as an excuse to back out of deals. The terms of the Trump Organization's various contracts and licenses with casinos, hotels, apartment buildings, and other businesses aren't fully known. But it's very common for companies to sever ties upon an indictment rather than waiting for a conviction, according to Rebecca Ricigliano, a regulatory enforcement lawyer at the law firm Crowell & Moring and former state and federal prosecutor.

"It's broader than bank loans or other loans and things like that. It's contractual obligations writ large," Ricigliano said. "And obviously the potential for fines, the potential for draining the books for legal fees. It costs a lot of money to mount a legal defense."

Local governments that may have contracts with the Trump Organization - in places where the company has golf courses or ongoing development deals - may also try to back out of any contracts with the company, causing more headaches, legal experts told Insider.

Staffers may run to the DA's office to save themselves

Now that the ongoing investigation has produced its first indictment, people who may be on the fence about cooperating may be more likely to take the plunge.

As Jeremy Saland, a former prosecutor in the Manhattan District Attorney's Office and current attorney at Crotty Saland in New York, told Insider's C. Ryan Barber and Camila DeChalus, the Trump Organization may see an exodus of staffers knocking on the DA's door.

"Not only will banks, lenders, and business associates begin to flee, the financial consequences may send employees running for lifeboats and pointing a finger at the captain to protect themselves before everyone is submerged along with the former president," Saland said.

The Trump Organization doesn't have many options to head off such an exodus, either. While CEOs typically try to cooperate with prosecutors to save their company, Trump has maintained his innocence and belittled the investigation as politically motivated.

"It's a little bit tricky because the organization is so intertwined with the individuals," Ricigliano said. "It's almost like a family business that has become bigger over the years."

Since the special grand jury in the investigation will run until November, prosecutors may still bring a superseding indictment against the Trump Organization and Weisselberg, and may bring additional charges against Trump himself.

Prosecutors are also looking into other issues, like whether the Trump Organization misrepresented property values to pay little in taxes while receiving favorable loan and insurance rates, and whether it broke financial laws by arranging a hush-money payment for Stormy Daniels. Those issues were not addressed in Thursday's indictment.

"We're just waiting for the other shoe to drop," Zelin said.

C. Ryan Barber and Sonam Sheth contributed reporting.