President Trump’s former campaign chairman Paul Manafort was found guilty on eight counts of financial crimes today.
Here’s everything you need to know:
Deplaning in West Virginia ahead of tonight’s rally, President Trump praised his former campaign chairman Paul Manafort as a “good man” and attacked special counsel Robert Mueller’s investigation as “witch hunt” and a “disgrace.”
“Paul Manafort is a good man. He was with Ronald Reagan. He was with a lot of different people over the years. I feel very sad about that. It doesn’t involve me but I still feel…” Trump said.
Trump noted that the charges Manafort was convicted of on Tuesday have “nothing to do with Russian collusion” and criticized the investigation for arriving at this point.
“It’s a witch hunt and it’s disgrace. But this has nothing to do with what they started out,” Trump said. “It was not the original mission believe me. It was something very much different. It had nothing to do with Russian collusion.”
Trump did not answer any questions about his former personal attorney Michael Cohen, who plead guilty to eight charges in his trial related to tax, fraud and campaign finance violation charges.
A jury found Paul Manafort guilty on eight of 18 counts against him. Those eight counts carry a maximum sentence of 80 years.
The judge has not set a sentencing date yet.
Here’s the breakdown of the counts:
Note: The count numbers are drawn from indictment, which is why the numbering seems off
A mistrial was declared on the remaining 10 counts: Three hiding foreign bank accounts and seven bank fraud or bank fraud conspiracy.
As Paul Manafort exited the courtroom, he was did not smile, but he gave a quick nod to his wife, Kathleen, who was sitting in the front row.
Kathleen made no comment as she left the courthouse.
After the trial concluded, prosecutors and defense attorneys were cordial and shook hands.
Judge T.S. Ellis spoke directly to Paul Manafort at the podium to tell him he has been found guilty of several charges.
He did not smile. Manafort’s attorney Kevin Downing stood behind him.
Manafort’s wife, Kathleen, expressed no emotion and stared ahead. She had her hands clasped on her lap.
Paul Manafort was found guilty of five tax fraud charges, one charge of hiding foreign bank accounts, and two counts of bank fraud.
The other 10 charges were declared a mistrial.
The charges: Manafort was charged with 18 counts of tax and banking crimes.
Judge T.S. Ellis said he will ask each juror their feelings about reaching a verdict.
If they all say they cannot reach a verdict: Ellis says he would likely declare a mistrial on 10 counts and have the verdict read on the remaining eight counts.
Both sets of attorneys said they agreed with this plan.
The jury in the Paul Manafort trial has reached a verdict on eight counts, but it can’t reach consensus on 10 counts.
Earlier on Tuesday, the jury asked Judge T.S. Ellis what would happen if they couldn’t reach a verdict on a count, and Ellis said to keep working on it.
Paul Manafort’s attorney Kevin Downing spoke to reporters on way into courthouse. He would not comment on news that President Trump’s former lawyer Michael Cohen is in court right now, and expected to take a plea deal.
Here’s the full exchange:
Downing: “It’s a note”
Reporter: “What is it about?”
Downing: “We will find out in a minute.”
Reporter: “Do you have any thoughts about Cohen out of New York?”
Downing: “None — thanks guys.”
The jury wrote a note to Judge T.S. Ellis earlier today and asked for guidance on not being able reach consensus on a single criminal charge in the Paul Manafort trial.
Ellis read the jury’s note out loud in court while jurors were present.
According to court transcripts, here’s what the note said:
8/21/18
Your Honor, if we cannot come to a consensus on a
single count, how should we fill in the jury verdict form for
that count?
And what does that mean for the final verdict?
We will need another form, please.
Ellis then added: “Signed the foreman.”
Judge T.S. Ellis today told jurors to keep deliberating and instructed them with a “Sawyers charge” — more commonly known as an “Allen charge.” The term Sawyers comes from a 1970 court case in the 4th Circuit, US v. Sawyers.
So what is an Allen or Sawyers charge? It is a supplemental instruction given by the trial court when a jury has reached an impasse in its deliberations and is unable to reach a consensus.
What must it contain? The judge may instruct the jury to go back and try their deliberations again, but the charge must not coerce a jury, and it must be fair, neutral and balanced. The judge must also incorporate a specific reminder to jurors on both sides (minority and majority jurors) that they must reconsider their positions in light of the other side’s views.
Can a judge give multiple Allen charges? Yes. The judge can instruct the jury multiple times to go back and try again if they are deadlocked.
But sometimes, they’re controversial.
The way a judge delivers Allen charges and how juries react to them can be controversial as defendants have argued they can be coercive to the jury. It is notable, therefore, that Ellis today emphasized to jurors they should stay true to their convictions and take all the time they need. He even told jurors they could ignore this instruction altogether.
“You should not surrender your honest conviction” simply to reach a verdict, Ellis told the jury Tuesday while he spoke for them about five minutes. He encouraged each juror to make their own decisions on each count, but if some were in the minority on a decision, they could think about what the other jurors believe.
“You’re the exclusive judges,” he said, encouraging them to make their own decisions about witness testimony and evidence in the case.
“Take all the time which you feel is necessary,” he said.
Speaking for about five minutes, Judge T.S. Ellis told the jury: “You should not surrender your honest conviction” simply to reach a verdict.
He encouraged each juror to make their own decisions on each count, but if some were in the minority on a decision, to think about what the other jurors believe.
Give “deference” to each other and “listen to each other’s arguments,” he said.
“You’re the exclusive judges,” he said, encouraging the jurors to make their own decisions about witness testimony and evidence in the case.
“Take all the time which you feel is necessary.”
Paul Manafort’s attorney Kevin Downing asked Judge T.S. Ellis to give the jury a new verdict form, after the jury said “we will need another form please” in their Tuesday note.
Ellis said he would not.
Downing said he wished jurors would be given a third option on the form – a hung jury option for each count. The jury verdict form gives jurors only the options of not guilty or guilty for each of the 18 charges against Manafort.
The judge said he will not ask the jury for a partial verdict at this time. They must continue their work, he told the court.
Judge T.S. Ellis said he is preparing to give the jury a direction to continue deliberations to see if it can reach a unanimous conclusion.
The court is on a five-minute recess as both sets of attorneys review the instruction language, called a Sawyer instruction, that Ellis intends to give.
He also said he is not yet ready to ask jurors where they stand on other counts.
He added that the situation arising Tuesday was “very typical.”
The jury asked in a note signed by the foreman today: “If we cannot come to a consensus for a single count, how can we fill in the verdict sheet?”
The jury note also said they needed a new verdict sheet, and they asked what not coming to a conclusion would mean for the “final verdict.”
Defense Attorney Kevin Downing commented on his way into court, confirming that it is a note.
When asked about whether he thought there would be a verdict soon, Downing said:
He was then asked if this was a verdict, to which he replied, “No, this is a note.”
There is a note from the jury in the Manafort trial, but no details yet on what the note says.
Prosecutors and defense attorneys are all in the courtroom.
The jury has left the jury room, but is not in the courtroom – the judge is not in the courtroom yet to call them in.
For the second day in a row, there is nothing else on Judge TS Ellis’ docket besides the Paul Manafort trial. While the jury deliberates, the courtroom stays open for reporters and members of the public to wait.
Many of the people in the room are passing the time by reading books. Others have been chatting – in hushed library voices. A small group began playing poker Tuesday morning in the hallway outside the courtroom.
The Paul Manafort trial jury reconvened and the jurors exited the court to resume deliberations at 9:37 a.m. ET.
The jury has now entered its 4th day of deliberations, having deliberated for 23 hours so far.
Judge Ellis, as he does, every morning asked jurors to affirm that they had not discussed or researched the case overnight. They responded in unison in the affirmative.
Paul Manafort, his wife, his defense attorneys, and the prosecutors were in the courtroom this morning when the jury reconvened.
The jury in the trial of former Trump campaign chairman Paul Manafort will begin its fourth day of deliberations Tuesday as the guessing game of when it will return with a verdict continues.
Manafort lawyer Kevin Downing said he believes the ongoing deliberations are a good sign for his client, but there’s very little insight available into what the jury has discussed, at least since they asked four questions about the charges last Thursday.
Manafort is charged with 18 counts of tax evasion, bank fraud and hiding foreign bank accounts in the first case brought to trial by special counsel Robert Mueller as part of the investigation into Russian interference in the 2016 US election. He has pleaded not guilty to all the charges.
Judge T.S. Ellis and both teams of lawyers met twice Monday morning in private. The conversations lasted about 10 minutes each, and Ellis said transcripts will be made public at the end of the trial.
The trial carries major implications for the future of Mueller’s investigation. Trump has repeatedly called the probe a “witch hunt” that hasn’t found evidence of Russian collusion with his campaign, and his allies in and out of the White House say the special counsel should wrap things up.
Our live coverage has ended, but we’ll be back tomorrow morning for jury deliberations. Scroll through the posts below to read more about the Paul Manafort trial or track the case here.
Paul Manafort’s attorney Kevin Downing told reporters Monday he believes the ongoing deliberations are good for his client.
“The jury announced that they are going to continue to deliberate starting tomorrow morning … Mr. Manafort is very happy to hear that and he thinks it was a very good day,” he said after court was dismissed.
Asked if the extended deliberations were good for Manafort, Downing said, “We believe so.”
After three full days of deliberations, the jury still has not returned a verdict.
Jurors in the criminal trial of former Trump campaign chairman Paul Manafort will continue their deliberations tomorrow at 9:30 a.m. ET.
Manafort is charged with 18 counts of tax evasion, bank fraud and hiding foreign bank accounts in the first case brought to trial by special counsel Robert Mueller as part of the investigation into Russian interference in the 2016 US election. Manafort has pleaded not guilty to all the charges.
What happened in court today: Jurors began a third day of deliberations this morning. Judge T.S. Ellis also held two private bench conferences with prosecutors and defense attorneys. Ellis said the conferences will be unsealed after the trial.
Judge T.S. Ellis just said the court will stand in recess and the jury will continue deliberating until at least 6:15 p.m. ET.
Jurors started their deliberations at 9:35 a.m. ET.
Ellis also held a short bench conference with the lawyers — making it the third bench conference of the day.
Earlier today, Ellis held two sealed bench conferences with prosecutors and defense attorneys. There was no indication of what was discussed. Ellis said the conferences will be unsealed after the trial.
Kevin Downing, Manafort’s defense attorney, just left the courthouse. On his way out, he answered a couple of questions, and said his client “feels good.”
Here’s the exchange:
Question: Any updates?
Downing: “Well, the jury is still out deliberating.”
Question: How confident do you feel?
Downing: “I feel good. Mr. Manafort feels good.”
Downing made nearly identical comments this morning. On his way into the courthouse, when asked how Manafort was feeling, he said: “He’s feeling really good.”
Judge T.S. Ellis just held another sealed bench conference with prosecutors and defense attorneys. It lasted about seven minutes, and Ellis said the conversation will be unsealed after the trial.
This is the second such bench conference of the day. The first lasted about 10 minutes, and there was no indication of what was discussed. Ellis said that conference will also be unsealed after the trial.
Meanwhile, the jury continues deliberations. We’re not sure when they could reach a verdict.
Judge T.S. Ellis is back on the bench this morning to speak with both teams of lawyers under seal.
The conversation will be made public at the end of the trial, Ellis said. There is no indication about what was discussed, though the judge made it clear that the transcript will be released after the trial.
The prosecutors, defense attorneys and Manafort are all in court.
Judge T.S. Ellis has only one item on his docket today: the Manafort trial.
While we wait as the jury deliberates, you can read more about Judge Ellis and revisit some of his most memorable lines (he’s talked about Baked Alaska and birthday cake during the trial).
The jury in the Paul Manafort trial reconvened at 9:31 a.m. ET. They were dismissed from court to resume deliberations at 9:35 a.m. Today marks their third day of deliberations.
Judge T.S. Ellis asked jurors if they had followed instructions not to discuss the case with anyone or take up their own research about the case. The jurors resoundingly answered — in unison — that they had followed his instructions.
Defense attorney Kevin Downing answered a couple of questions this morning as he walked into the courthouse.
He said his client Paul Manafort is “feeling really good.”
Here’s the full exchange:
Question: Do you think there will be a verdict today?
Downing: “I don’t know. We’ll see what happens. Good morning, everybody.”
Question: How is your client feeling today?
Downing: “He’s feeling really good.”
The jury is set to begin its third day of deliberations this morning. We’re not sure how long the process could take, but we’ll update you here when we know more.
The jury in Paul Manafort’s trial left Friday without reaching a verdict. They’ll be back for a third day of deliberations at 9:30 a.m. ET.
We’re not sure how long all of this could take: There could be a few more hours left, or the process could take days. Manafort is charged with 18 counts of tax and banking crimes, and the jury has a lot of evidence to sift through as it debates those charges.
We’ll update here as soon as we know more.
Judge T.S. Ellis dismissed the jury for the weekend at 4:55 p.m. ET about seven hours after they began deliberating today.
“Put it out of your mind until Monday,” Ellis said, adding, “Thank you for your work today.”
They are scheduled to return at 9:30 a.m. ET Monday.
Paul Manafort’s attorney Kevin Downing told reporters the team “really appreciate the support of President Trump,” when asked by reporters about the President’s comments concerning Manafort earlier today.
What Trump said this morning: The President answered questions about the Manafort trial as he left the White House on his way to New York.
“I think the whole Manafort trial is sad,” Trump said. “I think it’s a very sad day for our country. He worked for a me for a very short period of time. But you know what, he happens to be a very good person. I think it’s very sad what they’ve done to Paul Manafort.”
Downing also said he believes the jury is deliberating longer because it favors Manafort:
Reporter: “Do you think the jury deliberating longer favors your client?
Downing: “I do and he does.”
The jurors’ note and Judge T.S. Ellis’ brief comments today suggest the jury will be back for at least another day of deliberations on Monday.
Judge Ellis will bring the jury back in at 4:50 p.m. ET today. He will ask them what time they want to convene on Monday — 11 a.m. or 1 p.m. (Ellis usually starts court at 1 p.m. on Mondays.)
Judge T.S. Ellis said he would make several in-court discussions he had with prosecution and defense lawyers public once the trial ends. The announcement came in his hearing of the media’s requests to unseal information in the Paul Manafort trial.
But one won’t be unsealed: The one that’s part of an “ongoing investigation” will not be made public, he said.
What’s this about: That exception happened during Rick Gates’ testimony, when the former Trump campaign deputy leader was asked by Manafort’s team how many times he was interviewed about his role on the Trump campaign. The special counsel’s office investigating the Trump campaign and Russian government coordination said it wanted to keep that in-court discussion private because it would reveal new information about their ongoing investigation. Ellis agreed.
Gates is cooperating with the special counsel’s office for Manafort’s case and, apparently, on other still-unresolved potentially criminal matters.
Ellis said in court that discussion wouldn’t be “permanently under seal, I hope,” and that he couldn’t say if it’d be unsealed at the end of the trial, like the other in-court conversations.
The other bench conferences “have to do with the administration of the jury,” Ellis said.
The jury in the criminal trial of Paul Manafort has delivered a note to Judge T.S. Ellis.
The note hasn’t been read in court yet.
Some background: The jury also delivered a note to the judge on Thursday. They asked four questions about the case. They were…
We’ll update here as soon as we know more.
Terry Farrar, the wife of the former US Ambassador to Panama, has been attending the Paul Manafort trial since it started 14 days ago (barring a few days she was called for grandma duty by one of her four grandchildren).
Farrar said this is her first trial — which is easy for her to attend since she lives across the street. While in the courtroom, Farrar has been knitting blankets to donate to her church.
Every time Farrar has entered the courthouse she has followed the procedure of forgoing electronics and going through security.
Today, however, something different happened.
After the jury was sent back to resume deliberations, two US Marshals pulled Farrar out of the courtroom and into the hallway.
“They told me I was not allowed to have my sewing materials in court with me,” Farrar said.
Farrar had brought plastic knitting needles with her to work on blankets during court. “They think it could be used as a weapon,” even though she added, “they said I don’t fit the profile.”
To illustrate her small size, Farrar recalled how government officials, who worked for her husband, used to use her for weightlifting practice.
“I’m less than 100 pounds,” Farrar said, “they used to use me as a weight.”
The US Marshals ushered her downstairs to run her bag through the courthouse security checkpoint again, and put her bag through the x-ray machine.
“They said they didn’t understand how it had gotten through,” Farrar said.
Her materials have been confiscated (security is holding the knitting needles for her downstairs), but Farrar said she is determined to keep sewing. She plans to use her fingers to crochet.
Farrar has used her blanket making as a marker for how long the trial has gone on.
“I call it a ‘four blanket trial,’ hopefully it won’t be a five blanket trial,” she said.
The judge presiding over the trial of Paul Manafort said he’s received “threats” and is not willing to disclose jurors’ names and addresses requested by media outlets.
“I don’t feel right if I release their names,” Judge T.S. Ellis said.
Ellis did not disclose details about the threats in a hearing Friday. But he said it was enough to make him wary of making the 12 jurors and four alternates’ names public. The jury has not yet reached a verdict and is currently deliberating for the second day.
“I had no idea myself this case would arouse such public interest. I still am surprised,” Ellis said.
He added that the US Marshals Service follows him everywhere, even to his hotel — which he presumably stays in when court is in session because he lives outside of Northern Virginia. The jurors don’t have that protection, and Ellis even keeps secret the name of his hotel, he said.
He also noted that making the jurors’ names public in such a high-profile case could chill future potential jurors in similarly watched cases from wanting to serve.
The media attorney, Matthew Kelley from the law firm Ballard Spahr, argued that the appeals court governing the area says juror names should be made public except in special circumstances.
Paul Manafort, his defense team and prosecutors are in the courtroom for the 2 p.m. ET hearing on motions brought by CNN and other media to unseal some sealed parts of the trial, as well as the names of jurors.
The judge had asked the team, including Manafort, to attend.
President Trump on Friday characterized the trial that is ongoing against his former campaign chairman Paul Manafort as “very sad.”
But asked if he would pardon Manafort, Trump answered, “I don’t talk about that.”
He went on to criticize the trial, in which Manafort is facing multiple charges, including bank fraud.
Judge T.S. Ellis said he will hold a hearing after 2 p.m. ET today on a motion by CNN and other media organizations to unseal the names and addresses of jurors, as well as other parts of the trial that are currently secret.
The judge says he plans to make public all bench conferences currently under seal with one exception — likely the part of the trial where the Special Counsel’s office discussed information about their ongoing investigation.
Some names and medical information may also be redacted from what is ultimately unsealed.
The jury’s first day of deliberations ended yesterday after they asked the judge four questions.
Those questions were…
And here’s how Judge T.S. Ellis responded:
The jury in the trial of former Trump campaign chairman Paul Manafort will return to court at 9:30 a.m. ET for its second day of deliberations.
After a full day Thursday, the jury hadn’t yet reached a verdict on the 18 counts of tax evasion, bank fraud and hiding foreign bank accounts brought by special counsel Robert Mueller as part of the investigation into Russian interference in the 2016 US election.
We’re not sure how long all of this could take: There could be a few more hours left, or the process could take days. Manafort is charged with 18 counts of tax and banking crimes, and the jury has a lot of evidence to sift through as it debates those charges.
We’ll update here as soon as we know more.
Judge T.S. Ellis told the courtroom Thursday he would instruct the jury to rely on their “collective recollection” regarding their questions on “shelf” companies and foreign banking filing requirements. He would give them no further answers on those points.
Regarding their question about “reasonable doubt” — the legal threshold for acquitting a defendant — he said that the prosecutors had to prove their case not “beyond possible doubt,” but beyond “doubt based on reason.”
The jury had also asked if the court could match exhibit numbers to indictments. Ellis said the court could not amend the exhibit list.
The jury in the Paul Manafort trial asked four questions as they indicated they’d continue deliberations tomorrow.
Here’s what they asked:
Jurors in the criminal trial of Paul Manafort will continue their deliberations tomorrow.
Earlier today, the jury sent a note to the court and asked four questions. They also indicated they will be deliberating tomorrow.
Manafort, his attorneys and prosecutors were assembled in court.
The jury began deliberating this morning.
The jurors in the Paul Manafort trial took a break at 11:44 a.m. ET.
We’re not sure how long deliberations will take: The process could take hours, or it could take days.
Manafort is charged with 18 counts of tax and banking crimes, and the jury has a lot of evidence to sift through as it debates those charges.
We’ll update you here as soon as we know more.
Judge T.S. Ellis brought the jury into the courtroom at 9:47 a.m. ET today and formally charged the jurors to begin deliberations.
The 12 jurors exited the courtroom at 9:56 a.m. for deliberations in the case. The jury will now receive some direction from the court security officer and then begin deliberating.
Paul Manafort faces 18 counts including submitting false tax returns, bank fraud and failing to disclose foreign bank accounts.
The trial of the former Trump campaign chairman began on July 31 and is now in its 13th day.
Judge T.S. Ellis has nine other unrelated-to-Manafort court proceedings scheduled on his docket today, from 8:30 a.m. until at least 4 p.m. Some in the afternoon may be quite involved, so his courtroom will have activity throughout the day.
He is still set to bring the Manafort jury into the courtroom briefly at 9:30 a.m. to set them up to begin deliberations.
So what happens next? We’re not sure how long deliberations will take: The process could take hours, or it could take days.
We’ll update you here as soon as we know more.
Jurors are set to begin deliberating at 9:30 a.m. ET today whether to convict President Trump’s former campaign manager Paul Manafort of bank fraud and tax evasion.
The high-stakes prosecution of Manafort by special counsel Robert Mueller’s team reached its conclusion with Wednesday’s closing arguments. Prosecutors accused Manafort of “lies,” and defense lawyers questioned the credibility of key witnesses.
So what happens next? We’re not sure how long deliberations will take: The process could take hours, or it could take days. Manafort is charged with 18 counts of tax and banking crimes, and the jury has a lot of evidence to sift through as it debates those charges.
We’ll update here as soon as we know more.
Jurors are set to begin deliberations tomorrow morning in the criminal trial of former Trump campaign chairman Paul Manafort.
In case you missed it, here’s what happened in court today:
Paul Manafort’s defense attorney Kevin Downing spoke briefly to the cameras on his way out of court.
Manafort’s wife did not answer questions when she left the courthouse.
Court has adjourned for the day and the jury has been formally charged with their tasks.
The court will reconvene at 9:30 a.m. ET and the jury will then begin its deliberations.
Judge T.S. Ellis has dismissed the four alternate jurors, formally excusing one of them who has to take her son to school on Friday. If needed, the other three could be asked to return.
Earlier in jury instructions, Ellis described to jurors how they should go about the deliberations.
Ellis also offered words of caution to jurors regarding their interactions with the media.
Disclosures of deliberations “seems to me to do an injury to the deliberative process,” Ellis said Wednesday, before releasing the jury for the evening. He emphasized that it wasn’t an order, but rather a suggestion.
After more than 90 minutes of tediously giving instructions to the jury, Judge T.S. Ellis added one note that prosecutors fought hard to get in.
He told the jury to ignore any arguments that the special counsel prosecuted Paul Manafort for political purposes.
Why this matters: In closing arguments, Manafort’s lawyers repeatedly said he was the victim of “selective” prosecution and that the special counsel cherry-picked information because they were “desperate” to charge Manafort with crimes.
After jurors exited, prosecutors raised strong objections and asked Ellis to set the record straight in front of the jurors.
What happened before the trial: Ellis ruled that Manafort could not argue that he was the target of a political prosecution by the special counsel because of his ties to Donald Trump.
Judge T.S. Ellis told jurors that “the government is not required to conduct an audit before bringing a criminal prosecution.”
He gave this instruction Wednesday afternoon after legal wrangling — including earlier in the day when the jury was out of the room — about what he should tell jurors regarding IRS tax audits.
Why this matters: Prosecutors wanted Ellis to make it clear that you don’t need to be audited before being charged with tax crimes. Manafort’s lawyers noted during witness testimony that Manafort was never audited, and they told jurors in closing arguments that Manafort is innocent.
Jury instructions are continuing and should last another hour.
Judge T.S. Ellis is now giving the final instructions to the jury.
This is a routine procedure that happens in every case and will last an hour and a half.
In his instructions, Ellis told jurors that his comments during the proceedings were not meant to sway the jury or decide the case.
He also told jurors to “draw no inference” from any time he rebuked lawyers from either side. (He didn’t note this to the jury, but Ellis has prodded and rebuked prosecutors since the trial began.)
A more impassioned, quick-talking Greg Andres rebutted the defense team’s closing arguments by pushing firmly back at Manafort.
The defense “wants you to believe it’s a case against Rick Gates,” Andres said.
Gates was the quarterback, Andres said, quoting an email where Manafort directed Gates with those words. Andres continued with the sports analogy: “Guess who the coach of that team is … guess who owns that team? Mr. Manafort.”
Andres told the jury that Manafort’s lawyers were is using Gates’ admissions, and alluding to potential witnesses who weren’t called to the stand, to distract from the 388 documents and 27 witnesses that were presented at trial.
He took one last dig at the defense before concluding. He said that a chart that the defense showed the jury, detailing Manafort’s wealth, was “as good as” the financial documents Manafort allegedly doctored and were presented as evidence at trial.
Some of the jurors took notes during Andres’ speedy presentation, which was more animated than his longer closing arguments Wednesday morning. Judge T.S. Ellis is now giving the jury their final instructions, a process that is expected to last about an hour and a half.
The court is taking another 15 minute recess as Judge T.S. Ellis continues to deliberate over how to correct the record for the jury.
Why this matters: Prosecutor Greg Andres had raised several issues with the defense’s closing statement related to claims of selective prosecution of Paul Manafort, comments about IRS audits and whether one of the banks made money off loans to Manafort.
After closing arguments ended and jurors were escorted out of the room, prosecutors raised strong concerns to the judge that Paul Manafort’s lawyers had just made the case to jurors that Manafort was selectively prosecuted by the special counsel.
What prosecutors said: Prosecutor Greg Andres accused Manafort’s attorneys of a “clear violation” of a pre-trial ruling from Judge T.S. Ellis banning them from arguing that Manafort was selectively prosecuted.
Ellis generally agreed with Andres’ points and suggested he was prepared to set the record straight to the jurors. But Ellis made it clear that whatever he tells the jury, it will be brief and to the point.
In addition, Andres raised two other issues with the defense’s closing statements. These concerns related to comments about IRS audits and whether one of the banks that Manafort allegedly defrauded made money off the loans. Ellis seemed inclined to give the jury some corrective instructions, but wanted to check the transcript before making a final decision.
The court is now in recess.
If Ellis does agree to raise these issues with the jury, it will come during the long instructions that he will give them this afternoon. Ellis estimated that this process might take 1.5 hours. After that, the jury will get the case and can begin deliberations.
Defense attorney Kevin Downing told the jury to recall when Rick Gates — whom Downing spent much of Wednesday’s speech attacking — told the truth.
Gates in 2014 admitted to the FBI the existence of several of Manafort’s foreign bank accounts. He pointed out that’s the same group of investigators that’s now prosecuting the case against Manafort.
He also pulled out a piece of evidence from the trial: A statement that prosecutors and the defense team jointly signed that admits Gates “had no control over, no financial interest and ownership interest in” Manafort’s foreign bank accounts.
Downing said that statement was important because it affirmed the accounts were Manafort’s companies, DMP International, and not Manafort’s personally. Manafort and his wife each owned 50 percent of DMP International, according to prior testimony.
He also used Manafort’s accountants’ testimony from earlier in the trial — which quite clearly showed that Manafort hid his foreign lobbying income from them — as a way to make the foreign banking crimes more complicated than simply checking boxes on federal forms.
“They were quite clear,” Downing said of the accountants. “It’s a complicated situation. It’s a difficult question.”
Defense attorney Kevin Downing finished speaking at about 2:50 p.m. ET, for a two-part closing argument that lasted about an hour and 15 minutes.
Downing blamed former deputy Rick Gates for Manafort’s alleged crimes.
He said Manafort is innocent because Gates signed off on the foreign bank accounts.
Defense attorney Kevin Downing has pointed the finger at Paul Manafort’s former deputy Rick Gates, saying he “fell apart and showed himself the liar that he is.”
Downing also recounted for the jury the testimony they heard from Gates that he embezzled money from Manafort’s accounts and led a “secret life,” as Downing has called Gates’ extramarital affairs.
“To the very end, he lied to you … On cross-examination, he fell apart,” Downing said.
Manafort “did not know the Rick Gates that you saw” on the witness stand, Downing told the jury, pointing out how many times Gates met with prosecutors to prepare for the trial – around 20 times in all.
He also recalled how Gates said his defense team may ask for probation in his guilty plea. Twice, Downing said prosecutors were “so desperate” to make a case against Manafort that they needed to cut a deal with Gates.
“Now you know why he came in here to get one over on you,” Downing said.
Downing also painted Manafort as the victim. He said Manafort is innocent because Gates signed off on the foreign bank accounts.
Manafort gave Gates “the keys to all the accounts,” Downing said. “What a mistake that was – how foolish he must feel,” Downing added, pointing to Manafort.
In closing arguments, Manafort’s defense attorney Kevin Downing is clearly pointing the finger at Rick Gates: Blaming him for Manafort’s alleged crimes.
Downing has claimed that Gates, Manafort’s former deputy, lied to the jury to save himself from prison, and “fell apart” during cross-examination.
Defense attorney Richard Westling has hung much of his argument around intent in his closing statement.
He pointed out the possibly trivial nature of describing a house as a second home instead of a rental in one of the alleged bank frauds.
He also questioned whether accountant Cindy Laporta — a sympathetic witness who said her fabrication of a loan submission for Manafort was wrong — believed she was deceiving a bank at the time.
Westling conceded that the evidence against Manafort includes emails. But, he contended, “the problem of email evidence is very much the challenge of what does it look like later.”
The prosecution earlier encouraged the jury to rely on the trove of documents in the case, including several emails, to find Manafort guilty. Westling, instead, is asking them to look to the witnesses — some of whom cut deals with the government and may be perceived as less than trustworthy.
Westling concluded his argument about the bank fraud charges in 40 minutes.
What happens next: Westling swapped out with defense attorney Kevin Downing, who is now speaking about the tax fraud and foreign bank account charges.
Defense attorney Richard Westling’s remarks so far have underlined the idea that Paul Manafort became the special counsel’s victim in a “selective process of pulling” his financial records to concoct a narrative of an “elaborate fraud scheme.”
What Westling said
Westling has gotten close on Wednesday afternoon, but didn’t directly suggest that the special counsel charged Manafort in this criminal case because of their broader investigation into the 2016 election. He also said the special counsel’s office “discovered” the alleged fraud as they investigated Manafort. And they “tried to find any place that something doesn’t match up.”
He told jurors that it was “not until the special counsel showed up and started asking questions,” that anyone seemed concerned about Manafort’s dealings with the banks. He noted that none of the banks reported the alleged frauds to the authorities.
One thing to note: The jury in this case has not been able to hear about the other criminal case Manafort faces in DC federal court, nor much about the special counsel’s broader investigation into the Trump campaign and potential collusion with Russia, per the judge’s orders before trial.
The name of the special counsel – former FBI Director Robert Mueller – has not been uttered in the courtroom.
Within minutes of starting his closing statement, defense attorney Richard Westling mentioned Paul Manafort’s work on the Trump campaign.
Westling touted Manafort’s credentials as a seasoned political consultant and noted how Manafort earned “great respect” for his work. Westling then listed a series of presidential campaigns that Manafort has worked on, including Donald Trump’s campaign in 2016. Manafort served as the Trump campaign chairman for several months.
Westling also implored the jurors to consider the high burden of proof that the government must meet in order to prove that Manafort is guilty “beyond a reasonable doubt.”
Paul Manafort’s attorney Richard Westling has begun his closing arguments for the defense.
Earlier today, prosecutor Greg Andres spoke for about an hour and 40 minutes during his closing argument to the jury. He walked through Manafort’s alleged banking and tax crimes, and reminded the jury they should find Manafort guilty on all counts.
One of the lingering issues that has hung over the prosecution’s case is whether bank chairman Stephen Calk pushed the clearance of Paul Manafort’s loans from Federal Savings Bank because he wanted to work for President Donald Trump.
Prosecutor Greg Andres argued in his closing speech to the jury:
While Manafort sent fake income statements, explanations of his $300,000 credit card debt to the New York Yankees and other lies to the bank, Calk was there as “a guiding hand” to push the loans through, Andres said.
The acknowledgement of Calk’s possible quid pro quo with the Trump campaign chairman came as a brief section at the very end of Andres’ closing argument.
Judge T.S. Ellis has raised questions with the legal teams in this trial that Calk’s bank couldn’t have been defrauded because he wanted to give the loans and was the founder and a significant shareholder.
Calk did not testify during the trial, and instead other Federal Savings Bank employees described to the jury how they suspected inaccuracies in Manafort’s loan applications.
Prosecutor Greg Andres wrapped his closing argument to the jury at 11:42 a.m. ET.
That’s about an hour and 40 minutes after he began to walk through Manafort’s alleged banking and tax crimes, reminding the jury they should find Manafort guilty on all counts.
His speech ended somewhat abruptly after detailing lies Manafort allegedly told to Federal Savings Bank to obtain millions in loans, which prosecutors say amounts to four bank fraud and conspiracy charges.
The court will now take lunch and reconvene at 1:30 p.m.
Defense then will deliver its closing arguments. After that, Andres will have 17 minutes for a rebuttal, Judge T.S. Ellis said.
Prosecutor Greg Andres has now been speaking for an hour and a half.
In addition to the tax and foreign banking disclosure crimes, Andres has detailed the fabrications Manafort allegedly sent to Citizens Bank and the Banc of California to obtain millions of dollars in loans.
Andres indicated that he will be finishing his closing argument soon, saying that “it’s been a mouthful so far” and he’s “almost done.”
The last part of his closing argument will tackle the $16 million Manafort got from Federal Savings Bank.
Prosecutor Greg Andres told the jury that before they even consider the potentially fraught testimony of Manafort deputy and admitted criminal Rick Gates, they should look to 10 other witnesses’ testimony and evidence to find Manafort guilty beyond a reasonable doubt.
“The star witness in this case is the documents,” Andres said.
The jury doesn’t need to take Gates’ testimony at face value or even believe it, Andres said. But the jury should use it to compare with accountants and a bookkeeper’s description of Manafort’s financial disclosures. “See if it’s consistent,” Andres said.
He reminded the jury that Gates pleaded guilty to crimes in DC federal court and will be sentenced there – and the judge in that case will learn how Gates took hundreds of thousands of dollars from Manafort’s “Dumpster of foreign money.”
“Mr. Manafort is a mentor to Mr. Gates, particularly to his own criminal activity.” Andres said. He added that Manafort “didn’t choose a Boy Scout” to be his partner in crime.
And what about Gates’ admitted affair? “Was it to distract you? Does it matter?” Andres asked the jury.
He pointed out that Manafort’s lawyers never asked Gates about the alleged bank fraud.
“I’m not asking you to like him,” Andres said.
Andres is now discussing the bank fraud case. His closing argument has entered its second hour.
In his closing arguments, prosecutor Greg Andres made sure to note that the government wasn’t going after Paul Manafort because he was rich.
Judge T.S. Ellis made similar points throughout the trial, sometimes with the jury in the room.
Prosecutor Greg Andres is methodically outlining Paul Manafort’s alleged tax crimes to the jury.
To do this, Andres is displaying documents to the jury that already came up at the trial, including one of Manafort’s signed tax returns that Andres says was false. He has also leaned heavily on expert testimony from IRS agent Michael Welch.
So far, Judge T.S. Ellis has not interrupted Andres’ presentation with any comments of his own. This stands in stark contrast to opening statements, when Ellis stepped in to prod prosecutor Uzo Asonye several times.
Regarding the requirement to prove Manafort’s guilt beyond a reasonable doubt, Andres said, “that is a burden we embrace.”
Manafort is seated at the defendant’s table. Today he is wearing a blue suit and a blue shirt.
Prosecutor Greg Andres, in the first several minutes of his closing argument against Paul Manafort, has emphasized how Manafort lied, repeating the word to the jury several times.
Andres has framed the case against Manafort as having two parts:
Andres alleges that five years of Manafort’s tax returns are false, from 2010 to 2014. He also never told federal banking authorities from 2011 until 2014.
Andres is now walking through the fine details of the alleged tax fraud, telling the jury that they must find that Manafort willfully and knowingly lied on the official IRS forms about his income and foreign accounts.
The prosecutor punctuated this by showing the first of several emails the jury will revisit today: An email Manafort wrote that calls one of the 31 foreign accounts “my account.” Manafort wrote it “when no one was looking. He did not know one day he would be sitting in this very courtroom,” Andres said.
Andres’ closing argument for the jury continues.
Greg Andres is currently making closing arguments for the prosecution.
Just T.S. Ellis has encouraged each side to keep their closing arguments under two hours. Jury instructions will come after closing arguments.
What to expect in the prosecution’s argument: Without a doubt, the prosecution will try to convince the jury that Manafort sent fake documents to banks, lied to his accountants and bookkeeper, signed federal disclosures that failed to report his foreign banking to federal agencies, and pushed his Ukrainian lobbying money into lavish purchases, avoiding income taxes on millions of dollars.
During his trial, Paul Manafort has appeared — both in person and in courtroom sketches — to be barefoot at times under his loafers.
Manafort’s outfits are carefully chosen by the defense counsel — but are limited to the requirements set forth by the authorities of the court. For example, Manafort is not allowed to wear a belt or shoes with shoelaces, but is permitted a tie.
And as for the socks? Since Manafort remains in the custody of the marshals, he is only allowed the issued white socks.
According to Manafort spokesperson Jason Maloni, Manafort refuses to wear white socks with his suits.
We’ve reached the end.
Both Paul Manafort’s defense team and Robert Mueller’s prosecution team have rested — meaning all that’s left before jury deliberations are closing arguments.
The closing statements are sure to be impassioned, detailed speeches that look back over the 10 days of testimony. Here’s what to watch for on each side today:
The prosecution: Without a doubt, the prosecution will try to convince the jury that Manafort sent fake documents to banks, lied to his accountants and bookkeeper, signed federal disclosures that failed to report his foreign banking to federal agencies, and pushed his Ukrainian lobbying money into lavish purchases, avoiding income taxes on millions of dollars.
The defense: The defense team didn’t present anything during the trial (and they didn’t have to) — it’s entirely the responsibility of the prosecutors to prove their case.
Based on the team’s opening statement, the defense will likely point the finger at the people around Manafort who admitted in court they did wrong on his behalf. The defense team will reuse the witness’ statements, making clear to the jurors that they should doubt Manafort’s crimes were his alone, done willfully.
Court will be back in session at 9:30 a.m. ET for Day 12 of the trial against former Trump campaign chairman Paul Manafort.
The defense rested yesterday without presenting a case or calling any witnesses. Today is set begin with closing statements.
Judge T.S. Ellis encouraged each side to keep their closing arguments under two hours. Jury instructions will come after closing arguments.
Paul Manafort’s defense team rested Tuesday without presenting a case, and the jury went home for the day. Here’s everything you need to know about day 11 of the trial:
Judge T.S. Ellis rejected a request from Paul Manafort’s lawyers to tell the jury about some details from his DC indictment.
The details were about prosecutors’ effort in that case to take control of two Manafort properties, if he is convicted in DC. Those properties came up in the Virginia trial — he is charged with bank fraud relating to loan applications for some of the properties.
What the judge said: Ellis said that the details were not relevant to the Virginia case and that telling the jury “would be confusing and prejudiced.”
Ellis is now hashing out the jury instructions that will come after closing arguments, which are slated for tomorrow. This meticulous process includes tweaking individual words and removing proposed instructions that are now unnecessary.
Also in the courtroom today: Scott Meisler, a lawyer from special counsel Robert Mueller’s team who specializes in appellate law. He hasn’t been part of the core group of Mueller prosecutors working on the case. He hasn’t spoken Tuesday, but his presence was noted for the judge.
In some ways, it wasn’t a surprise.
Any statements Paul Manafort made in court could be used against him in other trials – including his upcoming trial in Washington, DC, on foreign lobbying violations.
The trial, which is expected to begin in mid-September, will be tried by some of the same prosecutors handling the current case in Northern Virginia.
If he were to testify, Manafort also would have also opened himself up to cross-examination by the prosecutors, and would have had to explain several emails and banking forms with his name and signature on them.
But it’s more surprising that the defense team did not present any evidence or call any witnesses, even people who could testify to Manafort’s character.
It’s possible the defense believes it has created enough doubt in the jurors’ minds through their questioning of prosecution witnesses over the last 10 days, and that it might have a leg up in the way jurors will be instructed to decide the case, especially given Ellis’ inclinations.
Earlier Tuesday, Ellis said he would instruct the jury to think about the “materiality” of the question of whether Federal Savings Bank founder Stephen Calk could contribute to Manafort allegedly defrauding the bank for $16 million in loans.
Calk, because he was a significant shareholder at the bank, could in theory loan to anyone he wished – even someone who was lying on paper – if Calk had the personal want for Manafort’s boost in politics, the defense team argued.
“In the end, I think the defendant makes a significant argument about materiality,” Ellis said Tuesday. “But in the end I think materiality is an issue for the jury.”
The Manafort jury was brought back into the courtroom Tuesday afternoon to learn that Manafort would not present a defense case.
Judge T.S. Ellis then told the jurors to go home and reminded them, as he always does, that they must not discuss the trial.
The court is now on recess until 3:30 p.m. ET, when there will be a hearing about jury instructions.
What the defense is saying: On his way out of the courthouse, defense attorney Kevin Downing said that the defense rested its case because “the government has not met its burden of proof.”
The prosecution and defense have both rested in the Manafort trial. Here’s how the rest of the day will go down:
Closing arguments are set to begin at 9:30 a.m. ET tomorrow. Ellis encouraged each side to keep them under two hours.
Manafort affirmed to the court that he does not want to testify, speaking for the first time during his trial.
Judge T.S. Ellis called Manafort to the podium to answer a brief set of questions — all before the jury was brought in the room.
Ellis asked if he discussed testifying with his lawyer.
“I have, your honor,” Manafort replied.
Ellis asked if he was happy with his lawyers, and Manafort responded affirmatively.
Ellis then asked if he made a decision about testifying.
“I have decided,” Manafort said.
Ellis asked if Manafort would testify.
“No sir,” Manafort replied, and then took a seat.
Manafort is not required to testify because of his Fifth Amendment rights against self-incrimination. Ellis made this clear during his brief conversation with Manafort.
“You have an absolute right to testify before this jury,” Ellis said. “You have an absolute right to remain silent before this jury.”
Judge T.S. Ellis said Tuesday morning that there will be another sealed hearing in the Manafort trial today.
That hearing started around 9:15 a.m. and will probably last awhile, Ellis said. The public has been ushered out of the courtroom.
This comes one day after Monday evening’s sealed hearing, which lasted about an hour.
What you need to know about sealed hearings: These hearings are in closed court, out of view from the public and the jury. It is not clear what has been discussed during these proceedings.
The judge announced yesterday that he will release the transcripts of these hearings “when the case is over.”
Manafort’s team last night said it planned to file a motion formally asking Judge T.S. Ellis to dismiss the bank fraud charges because the prosecution did not adequately prove them.
The motion has now been filed and will likely be addressed this morning in court.
This is not unusual: This motion is part of a typical step in trial, where the defendant asks the court to dismiss the case or counts in it following the prosecution’s presentation. These motions are hardly ever granted.
In this motion, Manafort’s team is seizing on questions Ellis asked the lawyers previously, about whether the Federal Savings Bank could be defrauded if its founder wanted to loan to Manafort even knowing the problems with his credit, income and long-term debt.
The prosecutors say the founder, Stephen Calk, was a conspirator in the alleged fraud, and Manafort’s actions still defrauded the bank because Calk is not the sole owner.
Prosecutors rested their case Monday in the trial against Paul Manafort. Here’s everything you need to know about day 10 of the trial:
Paula Liss, a special agent at Treasury Department’s Financial Crimes Enforcement Network, was the last witness to testify against Paul Manafort.
In requests to Judge T.S. Ellis, prosecutors had fought to ask Liss three additional questions on the stand. (She had testified briefly earlier in the trial.) They hoped she would testify about Manafort’s consulting business foreign bank account filings — counteracting doubt the defense team may have raised in the jurors’ minds.
Liss clarified for the jury Monday that no foreign bank account disclosures existed for Manafort’s consulting companies from 2011 to 2014. She previously testified that he and his wife never disclosed foreign bank accounts they personally controlled, either.
One of the defense team’s most pointed cross-examinations during the trial happened when they asked Liss if a person who held 50 percent of a company would need to disclose that company’s foreign accounts. She said the threshold was 51 percent ownership. Manafort and his wife owned 50 percent each of his consulting firm DMP International.
What the judge told jurors: On Friday, Ellis pointed out to the jury before Liss testified that the companies aren’t facing charges for failure to disclose foreign bank accounts. Ellis also reminded the jury that they could only consider Liss’ testimony in examining how it showed Manafort’s intent not to disclose foreign accounts, for which he is personally charged.
The prosecution rested its case against Paul Manafort on Monday afternoon.
This comes after 10 days of testimony from 27 witnesses. The defense has not indicated if it will call any witnesses to the stand.
Prior to the prosecution resting, James Brennan, a vice president at Federal Savings Bank, testified that he faced so much pressure from his bank’s chairman about Manafort’s ability to borrow $16 million from the bank that he lied on a form reviewed by federal regulators and the bank’s directors about the stability of the loan.
Brennan had immunity from prosecutors to testify against Manafort.
A Federal Savings Bank vice president said he faced so much pressure from his bank’s chairman about Paul Manafort’s ability to borrow $16 million from the bank that he lied on a form reviewed by federal regulators and the bank’s directors about the stability of the loan.
James Brennan, the Federal Savings Bank employee who wrote a memorandum about a second $6.5 million loan the bank extended to Manafort, said he had given the loan a rating of “4.”
But in court Monday, he said he shouldn’t have ever done that.
What that number means
“If I had my recommendation … the loan would not be made,” Brennan said in court.
So why did this loan get a 4, prosecutors asked? “Mr. Calk,” Brennan said, naming the bank founder who had sought Manafort’s help in gaining positions inside the Trump campaign and administration. Brennan did not have a choice to rate the loan higher, he added, “because the loan was going through.”
A spectator in the courtroom could be heard saying “wow” at this point in Brennan’s testimony.
Brennan also described how he asked Stephen Calk’s brother, John Calk, another major Federal Savings Bank shareholder, to sign off on the loans to Manafort. John Calk refused.
At least one other decision-maker at the bank tried to stand in the way of Manafort getting a large loan — and Manafort himself pulled out from closing a loan when he first sought it.
But Federal Savings Bank’s Stephen Calk, witnesses say, pushed through a $9.5 million loan to Manafort just before the presidential election, and another $6.5 million just before the inauguration. They were the largest and second largest loans the bank ever made.
In all, the bank lost $11.8 million million on the loans it made to Manafort, Brennan said.
Brennan had immunity from prosecutors to testify against Manafort.
The court is taking its afternoon recess and will reconvene at 3:05 p.m. ET.
Prosecutors finished their direct questioning of James Brennan, a vice president at Federal Savings Bank and the 27th witness to testify against Paul Manafort, around 2:20 p.m. ET.
Manafort’s lawyer Richard Westling began inquiring about Brennan’s work at the bank on the Manafort loans.
The defense team will continue with their questioning of Brennan after the break.
Prosecutors largely used Brennan to make clear what several previous witnesses from the bank have stated: That the bank saw and internally documented several red flags when Manafort approached them for loans. Additionally, the bank chairman, who was impressed with Manafort’s Trump connection, overrode any barriers standing in the way to lend Manafort $16 million.
Prosecutors have called the bank chairman, Stephen Calk, a “co-conspirator” in the alleged bank fraud.
Brennan said that months before Manafort received his first loan from Federal Savings Bank for $9.5 million, the bank employees had realized his consulting company’s supposed income didn’t match up with what he reported on his tax returns, his American Express bill carried a sizable debt for New York Yankees tickets and he had not disclosed other multi-million-dollar mortgages on properties he owned. The loans’ burden is still on the books in the bank’s portfolio.
Employees at the Federal Savings Bank knew that Paul Manafort lied in loan applications and other documents before the loan was approved by the bank’s chairman, who wanted a position in the Trump administration, one of the employees said Monday.
James Brennan, a vice president at the bank, testified that he and his colleagues knew that Manafort lied in loan applications and other documents about his financial situation. Brennan said Manafort gave misleading information about his company’s income, the unpaid debts from his Yankees season tickets, and mortgages on his other properties in New York.
Prosecutors pulled up an email that Brennan sent to colleagues who sat on the bank’s loan-approving committee.
The email, sent in September 2016, detailed some of “the issues we were having” regarding one of Manafort’s loan applications, Brennan said.
Regardless of their concerns, Manafort received loans from the bank, totaling $16 million. The jury heard testimony last week that the loans were approved by the bank’s founder, Stephen Calk, and that Manafort tried to get Calk a Trump administration job.
By 1:20 p.m. ET, the Manafort trial was back in action on its 10th day.
Here’s what to expect: Prosecutors and then the defense will question James Brennan of Federal Savings Bank, who has immunity to testify.
Judge T.S. Ellis will then hear arguments regarding a sealed motion Manafort’s team filed this morning, and regarding a motion the prosecutors have filed to introduce more evidence through another witness, which appears to be Paula Liss, a money laundering agent with FinCEN who testified earlier in the trial about Manafort’s failure to register his foreign bank accounts, according to Ellis’ statements Monday and previous court filings.
Prosecutors Monday morning defended four key charges in Paul Manafort’s criminal trial, after the judge overseeing the case in Virginia federal court questioned whether a bank founder who wanted Manafort’s boost in the Trump political enterprise could have been defrauded.
Prosecutors said Judge T.S. Ellis had pointed out to both legal teams that if Federal Savings Bank founder Stephen Calk approved loans to Manafort for personal reasons — like an appointment as Army secretary in the Trump administration — the bank couldn’t be defrauded of the $16 million it gave Manafort.
But prosecutors point out that Manafort gave the bank fake documents about his assets.
“Mr. Calk is a co-conspirator, and he participated in the conspiracy to defraud the bank,” prosecutor Greg Andres told the judge on Friday out of earshot of the jury. Calk has a major ownership stake in the bank but is not a sole owner, Andres said.
Prosecutors told the court that no one at the bank will admit Manafort gave them false documents, but prosecutors have alleged the bank had several reasons not to give him the large loans.
“The point is he didn’t follow the normal practice. He was aware of the red flags, but he didn’t look into them, and he approved the loans,” Andres told the judge.
What prosecutors are requesting: Prosecutors, in their filing Monday morning, request that Ellis “recognize the lack of merit in any defense argument” that Calk’s complicity excuse Manafort’s fraudulent representations to the bank.
The question of whether Manafort was rightly charged in several alleged bank frauds could also play into a five-hour delay the court took on Friday, as attorneys and the judge discussed issues in the case secretly. The purpose of those conversations are not yet known.
Manafort faces four criminal bank fraud and bank fraud conspiracy counts related to the Federal Savings Bank loans. He faces five other brank fraud and bank fraud conspiracy counts related other multi-million-dollar loans from the Banc of California and Citizens Bank.
Paul Manafort is charged with 18 banking and tax crimes and faces a maximum of 305 years in prison if convicted. He has been held in jail since June 15 after prosecutors and a grand jury alleged he tried to tamper with witnesses.
Throughout the trial, he has appeared to remain in good spirits, wearing blue and black suits without socks or a belt. He’s followed the evidence presented closely, taking notes with his glasses on and whispering to his lawyers to discuss the action.
Occasionally he’ll turn to wink at his wife Kathleen, who, dressed in black and accompanied by two close female friends, has sat in the front spectator row behind her husband every day.
One looming question that developed Friday and could still throw an unexpected curveball: Why was the trial delayed for nearly five hours after a meeting between the judge, prosecution and defense team? The delay is not yet explained, and the secretive conversations Friday are under seal by the court.
The prosecution is slated to wrap up — assuming no other delays occur — on Monday afternoon. The trial resumes at 1 p.m. ET.
Over nine days in federal court, prosecutors in Paul Manafort’s trial appeared to operate with an overarching goal: Connect the dots between the criminal charges against the former Trump campaign chairman.
“A man in this courtroom believed the law did not apply to him,” said prosecutor Uzo Asonye in the very first words of prosecutors’ presentation to the jury. Each day has layered witness after witness – 26 total so far – toward that point.
On the different days of testimony, the topics varied.
The trial kicked off with descriptions of his political work in Ukraine. There were several hours of house and garden specialists and luxury goods salespeople detailing Manafort’s purchases, days spent explaining his foreign accounts and his tax laws, and others discussing his bank application for loans.
Mueller’s goal: If special counsel Robert Mueller’s team is to be successful in convincing a jury of Northern Virginians to convict Manafort, they had to paint a picture that placed the 18 charges into one gripping narrative: that of a man who got rich, went to extra lengths to hide that wealth from the IRS, pushed fake documents to banks to keep up the cash flow, leveraged his role as Donald Trump’s campaign chairman for a final $16 million, and did whatever he could to enjoy fortune and power.
If the prosecutors succeed in winning a unanimous conviction, it could have wide-ranging implications for the Trump administration and President Donald Trump himself. The outcome of the case could have major implications for the public’s perception of Mueller’s ongoing probe of Russian interference in the 2016 election — which has taken a hit in recent months amid repeated attacks from Trump and his allies and appears to still be relying upon help from Manafort’s right-hand man, another top Trump campaign official, Rick Gates.
In turn, the courtroom result is likely to affect how Trump’s team reacts to Mueller.
The ninth day of Paul Manafort’s criminal trial wrapped up Friday, with testimony from a bank executive who reviewed loan application documents for Manafort.
Here’s everything you need to know from day nine of his trial:
Judge T.S. Ellis repeatedly reminded jurors Friday about their obligation not to discuss or research the Paul Manafort trial outside of the courtroom.
The judge started and ended the day by imploring that the jury follow his instructions.
“Don’t discuss the matter at all,” Ellis sternly told the jurors at the end of the day.
The Manafort trial just ended for the day. Court resumes at 1 p.m. ET Monday.
Prosecutors plans to call James Brennan, another bank employee who has been granted immunity for his testimony. Paula Liss, an analyst at Financial Crimes Enforcement Network, may also return to the stand.
Prosecutors could rest their case Monday.
It remains unclear what the defense plans to present. Both sides have requested two hours each for closing arguments.
Irfan Kirimca, a ticket operations manager at New York Yankees, testified against Paul Manafort for a total of only 10 minutes.
But in that time, prosecutors provided the jury with what may be home run evidence — Manafort alone controlled his secret foreign bank accounts and used them for personal pleasures.
Manafort emailed an employee of the Yankees in 2011 to tell them to expect payment of $226,800 for his tickets “sent from Global Highway LLC.” That’s one of dozens of Cypriot accounts Manafort allegedly hid from the government to collect his Ukrainian lobbying income and for which he never paid taxes.
Two days later, Kirimca confirmed an email that said the Yankees got a wire payment from Global Highway’s account for $226,800 for Manafort’s tickets.
His longtime deputy, Rick Gates, was not involved in the payment.
In another email, prosecutor Brandon Van Grack showed to Kirimca and the jury, a Yankees employee asked Manafort if he and his wife would attend opening day 2016. They would, Manafort replied, “Perfect.”
Manafort had a multi-year agreement with the Yankees. The agreement included:
Every year Manafort bought seats, he had them sent to his Trump Tower condo, Kirimca said.
Gates never told the Yankees he’d pay for Manafort’s season tickets, Kirimca said. And Manafort’s deputy, whom the defense team hopes to pin much of the alleged financial crimes, was never a season ticket holder.
The role of the Yankees tickets’ in Manafort’s case still isn’t entirely apparent.
Why this matters: Prosecutors have highlighted several times throughout previous witness’ testimony, including bankers testifying about alleged bank fraud and Manafort’s debts, that Manafort attempted to pass off the Yankees expense onto Gates at the same time he told banks he was worth millions and sought millions more from them.
The next witness, Irfan Kirimca, works in ticketing for the New York Yankees.
Kirimca took the stand around 4:55 p.m. ET.
Prosecutor Greg Andres said questioning of Kirimca would take about 15 minutes. He added that the prosecution intends to call one more witness before the day’s end.
Paul Manafort’s attorney Richard Westling attempted to sow doubt into what a Federal Savings Bank loan officer told the jury about his boss’ pressure to approve $16 million in loans for Paul Manafort while seeking a position in the Trump operation.
Manafort allegedly lied to the bank about his personal and business assets when he sought the loans.
Westling walked Dennis Raico, the loan officer, through the fact that the loans the bank offered to Manafort were fully secured by other assets of Manafort, including a mansion in the Hamptons owned by his wife.
He also pointed out how the bank considered changing the terms of a loan for Manafort before one loan closed. Manafort had originally sought one loan for $18 million, which the bank never granted, and just before closing on another loan worried about his mortgage tax burden, Raico said.
Westling also prompted Raico to admit that three members of the bank’s credit approval committee voted on Manafort’s loan approvals — not just Stephen Calk, the Federal Savings Bank founder who wanted an in with Trump.
How prosecutors responded
Prosecutors countered for the jury that Raico would never have known the power dynamics among Calk and the two other loan approval deciders. And he had no idea if one of the other bank loan deciders disagreed with Calk, Raico said.
“Mr. Calk’s involvement was more than any of the loans” that Raico worked on lending at the bank, he said.
“He took a personal interest. He met the borrower on his own accord,” Raico said about the two times Federal Savings Bank lent to Manafort.
Prosecutors on Friday again dug into the mysterious Yankees tickets purchase made on Paul Manafort’s American Express card.
They have previously made reference to the Yankees tickets, which appear to factor into Manafort’s alleged bank fraud, specifically his representation of his personal debts to the banks in 2016, two years after Manafort’s Ukrainian politics funding dropped.
Manafort’s deputy Rick Gates also testified that Manafort made him sign a letter saying that Gates bought the tickets, costing more than $200,000, when he had not.
On Friday, Dennis Raico, a loan officer at Federal Savings Bank, testified that the tickets were purchased using Manafort’s card. Raico was told that Manafort lent his card “to a friend,” so that he could purchase season tickets and then pay him back.
Raico testified that he received a copy of a memo from Gates to Manafort, thanking Manafort for letting him use the card to purchase the Yankees tickets.
In the memo, Gates added that he would pay Manafort back by May 30, 2016.
Raico said the “large” outstanding balance on the card — $300,000 — was concerning to the bank because it negatively affected Manafort’s credit.
The jury saw one credit card statement from February 2016 that showed three separate charges for Yankees tickets on the same day. The payments were for tens of thousands of dollars each.
Dennis Raico, a loan officer at Federal Savings Bank, provided details about Paul Manafort’s loan application process for his Bridgehampton property in New York.
The jury saw several emails about the back-and-forth negotiations between Manafort and bank employees over the loan.
In one email Manafort wrote to Stephen Calk, the CEO of the bank, he explained an error he had made in describing the potential payout and requesting that they increase the amount.
Raico also testified about how Manafort submitted his own terms for how the loan would be structured. When asked by the prosecution whether a client submitting his own terms is consistent with the bank’s policies, Raico said no.
When the president of the bank decided not to move forward with the loan requested by Manafort, Calk intervened to help Manafort secure it.
“This should be a short conversation. Let’s all stay friends, move on and go our own way,” president Javier Ubarri wrote in an email to Raico and other bank employees.
Raico said that Calk disagreed with Ubarri’s decision and ultimately overruled him by granting the loan to Manafort.
The relationship between Manafort and the Federal Savings Bank bankers began in spring of 2016, a loan officer testified.
That’s when Federal Savings Bank founder and chairman Stephen Calk and Paul Manafort sat next to each other at a dinner with loan officer Dennis Raico, Calk’s then-son-in-law Jeff Yohai, and several other bankers and a mortgage broker at Capital Grille in New York City’s Financial District.
At the dinner they discussed “politics, loans” and other matters, Raico said.
Manafort, Yohai and Raico met again on July 27, 2016, at the same New York building, several floors above in the bank’s offices. Calk conferenced into the meeting. At that time, Calk said he was “interested in helping the Trump organization,” Raico said, meaning Donald Trump’s business entities. Later, however, Raico testified Calk was interested in serving the Trump administration.
One of Manafort’s loan applications was approved the very next day — an unusually quick turnaround, Raico testified.
Around early August 2016, Calk had asked Manafort if he could “help serve the Trump administration,” Raico said, and Manafort asked Raico to send him Calk’s resume. The jury saw that email Friday displayed in the courtroom.
Three days after the presidential election, Calk called Raico because he hadn’t spoken with Manafort for a few days and he wanted to know if he was being considered for Secretary of the Treasury of Secretary of the Department of Housing and Urban Development.
The call and Calk’s wish for him to pass on messages to Manafort “made me very uncomfortable,” Raico testified Friday.
A previous witness testified that Manafort pinged Gates about Trump considering Calk for Secretary of the Army.
Dennis Raico, a loan officer at Federal Savings Bank, testified Friday that he acted as a go-between for his bank’s founder and chairman Stephen Calk and Paul Manafort.
Raico testified that this took place as the bank rushed to approve loans while Calk sought upper-level perks in the Trump political operation.
Here’s how the loan process worked out:
Manafort resigned from the position in August 2016, but remained in contact with his then-deputy Rick Gates who stayed with the campaign.
Calk had pushed to expedite and approve the loans for Manafort — who in 2016 was seeking money alongside his then-son-in-law Jeff Yohai — because he knew Manafort was involved in politics, Raico said.
Raico testified he offered the investigators information to build their case against Manafort in June 2017, and he is speaking with an immunity agreement today.
Manafort is accused of defrauding the bank for $16 million.
Prosecutors called Dennis Raico of Federal Savings Bank to the stand on Friday afternoon.
Raico was granted immunity for his testimony.
Why this matters: He is one of several witnesses who worked at Federal Savings Bank, the Chicago bank that gave Paul Manafort a loan. Manafort had recommended the bank’s CEO, Stephen Calk, for a senior position in the Trump administration after the election.
Prosecutors allege Calk was involved in having Federal Savings Bank extend a mortgage to Manafort in 2016 based on fraudulent financial details.
Calk was named to Trump’s Economic Advisory Council in August 2016, and Manafort recommended him to his former deputy Rick Gates to be Army Secretary in November 2016, although he never received a position in the Trump administration.
Judge T.S. Ellis returned to the courtroom at 2:22 p.m.
After conferring with an attorney for the prosecutors and an attorney for the defense briefly, Ellis said:
That’s when Andres reminded him the jury still needed to be brought in.
The courtroom erupted in laughter.
And about those secretive morning meetings? There’s has been no word whatsoever about the reason for the almost all-day delay.
Thirty minutes after court was supposed to reconvene, Judge T.S. Ellis, prosecutors and many defense lawyers have still not returned to the courtroom.
Paul Manafort and two of his defense lawyers are still waiting the proceedings at the counsel’s table.
The mystery of the morning has not been solved, and the court is now on break until 1:45 p.m. ET.
Lawyers from both sides huddled with Judge T.S. Ellis twice this morning. After almost an hour of waiting, lawyers from both sides Ellis returned to the courtroom at 11:07 a.m.
Ellis brought the 16 jurors in, stressed to them the importance of not discussing the case and told them to “keep an open mind.” He also said the court plans to “continue with evidence” presentations in the afternoon today and that he would “expect to make progress.”
Ellis then said the court would take an open lunch and reconvene at 1:45 p.m. ET. He gave no further detail about the morning’s delay.
What this means for timing: It now seems quite unlikely that the prosecutors will finish presenting their case Friday, as they had previously said they would.
Friday morning has had a strange, secretive beginning.
Lawyers from both sides have huddled with Judge T.S. Ellis twice with the white noise machine obscuring their conversations.
The jury has not been called yet. Meanwhile, Manafort has been all smiles, and also spent several minutes in whispered conversation with his lawyers.
Prosecutors have for the second time during Paul Manafort’s criminal trial asked Judge T.S. Ellis to correct a statement he made to the jury, according to a filing they made Friday morning.
This time, they’re asking Ellis to tell the jury to disregard his comment Thursday during a witness’ testimony about alleged bank fraud conspiracy that the attorneys “might want to spend time on a loan that was granted.”
Ellis made the comment near the end of the day Thursday, as witness Taryn Rodriguez of Citizens Bank testified about a $5.5 million loan Manafort applied for using false statements to the bank but did not receive.
What prosecutors want: Prosecutors said the comment misrepresents the law regarding bank fraud conspiracy and is likely to confuse and mislead the jury.
They want Ellis to explain in court Friday “that the jury is not to consider the Court’s comment and that loans that Manafort fraudulently applied for but did not receive are relevant to the charges in the indictment.”
This will be the second time in as many days they’ve asked for a correction. Yesterday, prosecutors asked Ellis correct the record for the jury about his agreement to let an expert witness from the IRS sit in the courtroom before he testified. Ellis told the jury he was “probably wrong.” Transcripts from earlier in the trial show he clearly discussed with prosecutors the IRS witness observing the trial.
Court is back in session at 9:30 a.m. ET today.
What to expect: Prosecutors will call their final witnesses, and wrap up their case.
Prosecutors say they have four or five witnesses remaining, including two who were granted immunity for their testimony: Dennis Raico and James Brennan. Both worked at Federal Savings Bank, which gave Manafort a mortgage that prosecutors say was based on fraudulent documents and whose CEO, Stephen Calk, Manafort recommended for Army secretary.
The eighth day of Paul Manafort’s trial has wrapped up. Here’s what you might have missed:
The fourth witness the special counsel’s office plans to call Friday to wrap up its case against Paul Manafort is Andrew Chojnowski, who appears to work in a senior position related to lending at Federal Savings Bank.
He was not on the previously published witness list.
The special counsel’s office also said it plans to question witnesses James Brennan and Dennis Raico of Federal Savings Bank, as well as Irfan Kirimca, who works in ticketing for the New York Yankees.
Testimony in the criminal trial of Paul Manafort concluded Thursday afternoon with testimony from Gary Seferian, a vice president and loan manager with the Banc of California.
Prosecutors will call four to five witnesses Friday, including Dennis Raico and James Brennan, both of whom were granted immunity for testimony, Judge T.S. Ellis said.
Paula Liss, an analyst with the Treasury’s Financial Crimes Enforcement Network, may also be called back to provide more testimony.
The trial will resume at 9:30 a.m. ET.
Taryn Rodriguez, a loan officer assistant at Citizens Bank, testified Thursday afternoon about a $5.5 million dollar loan that Paul Manafort applied for on his Union Street property. Manafort did not ultimately receive the loan from Citizens Bank.
As defense attorney Jay Nanavati was about to start questioning Rodriguez, Judge T.S. Ellis interjected by suggesting to him that he “may want to spend time on a loan that was granted.”
Prosecutor Uzo Asonye countered that the loan application was significant because it was one of the charges listed in Manafort’s indictment.
What the indictment alleges: The indictment alleges that as part of the loan application process, Manafort submitted a false statement to the bank about his assets and liabilities, and that a fake profit and loss statement for his company was submitted on Manafort’s behalf.
Rodriguez confirmed that, as part of the loan application process, her bank received financial documents that a bookkeeper had previously testified were fake.
Rodriguez testified that if she had known the documents were fake, “I would have brought it to upper management.”
The next witness — Gary Seferian — is now testifying.
Special counsel Robert Mueller’s team told the court they want to keep a discussion regarding Rick Gates secret because releasing the transcript of the conversation would “reveal details of the ongoing investigation.”
The discussion took place Tuesday afternoon and involved the trial attorneys and Judge T.S. Ellis.
The still-secret conversation occurred in the middle of former Trump deputy campaign chairman Rick Gates’ testimony against his longtime boss Paul Manafort.
Defense attorney Kevin Downing asked Gates: “Were you interviewed on several occasions about your time at the Trump campaign?”
Prosecutor Greg Andres objected to the question before Gates could answer.
The lawyers and Ellis then huddled in the far corner of the courtroom to discuss whether the question could be asked. The overhead noise machine was turned on so that Gates, the jury and the public in the courtroom couldn’t hear what they said.
Ellis called for a break in the proceedings immediately after the short discussion ended, and Downing tried to ask about the Trump campaign investigation again.
Gates is required to help with that investigation as needed and with the prosecution of Manafort, per his plea agreement.
Gates testified for three days against Manafort this week.
“Disclosing the identified transcript portions would reveal substantive evidence pertaining to an ongoing investigation … In addition, sealing will minimize any risk of prejudice from the disclosure of new information relating to that ongoing investigation,” the special counsel’s team wrote.
“The government’s concerns would continue until the relevant aspect of the investigation is revealed publicly, if that were to occur,” prosecutors wrote in a court filing Thursday.
Court is now in recess until 3:15 p.m. ET.
Peggy Miceli, an underwriting manager for Citizens Bank, just finished her testimony. She answered questions about loan forgiveness issues and her bank’s policy on Airbnb rentals.
Prosecutors said they plan to call two more witnesses: Taryn Rodriguez with Citizens Bank and Gary Seferian.
Prosecutor Uzo Asonye estimates questioning will take about an hour for each witness.
Prosecutors used Peggy Miceli, an underwriting manager for Citizens Bank, to describe just how much more money Paul Manafort secured when he told a bank that a Soho condo he listed on Airbnb was his family’s “second home.”
Under Citizens Bank policy, he would never have gotten more than a $1 million loan if the underwriters had known the condo rented out more than 180 days in a year — effectively being used as an investment property. He also would have faced a steeper interest rate on the loan.
Instead, Manafort received a $3.4 million loan from Citizens Bank in 2016. That was “way over the max,” Miceli said.
At one point, Miceli read the jury an email she wrote in February 2016 to others within Citizens Bank, saying that Manafort’s business didn’t have the funds to get the money he sought.
The email ended with her writing “😞.” That’s “the sad face,” she explained to the jury.
Miceli then received a doctored letter from Manafort’s Cypriot shell company Peranova and from his accounting firm, saying a $1.5 million loan was forgiven.
Miceli approved the $3.4 million loan.
When asked if she would have wanted to know if the accountant sent false information or if Manafort controlled the company Peranova, she first said “yes,” stretching out the word for emphasis, then said “absolutely.”
Paul Manafort’s “amazing full floor loft in Soho” disappeared from Airbnb during a month-long period Manafort closed a $3.4 million mortgage on it, after telling a bank it was a second home used by his family.
The Howard St. property was listed on the Airbnb online vacation rental platform from January 2015 to late April 2016, according to Darin Evenson, Airbnb’s director of customer experience for North America. The property had two bedrooms and two baths and the title “amazing full floor loft.” Guests had access to the entire home for their stay, according to printouts of reservations and listings shown in court.
But there was a break from late February to early March 2016, where the property was no longer available for rent on Airbnb.
The Airbnb employee’s testimony appears to confirm one of the lies Manafort told a bank as he sought money from them. Banks give more money toward properties used by their owners as residences – even second homes – than they do rentals, and Manafort appears to not have disclosed income from the rental on his tax returns.
Five guests paid over $11,000 at one point to stay there, one reservation showed. They rented the condo for 21 nights. Another reservation showed a four-night stay costing two guests close to $1,800.
The Airbnb travelers rated the condo five out of five.
Manafort’s then-son-in-law Jeff Yohai’s name was listed on the Airbnb account. Evenson testified that he was not aware whether Manafort was the host or owner.
A banker who testified earlier Thursday said Manafort described the property’s ownership as split between him, his wife and his daughter Jessica, who was then Yohai’s wife. Manafort had encouraged Yohai to convince an appraiser researching a mortgage application on the condo that “you and Jessica are living there,” according to an email the jury saw earlier Thursday.
The court just went on its lunch break.
The criminal trial of Paul Manafort will resume at 1:30 p.m. ET with testimony from AirBnB employee Darin Evenson.
What has happened so far today: Melinda James, mortgage loan assistant at Citizens Bank, testified earlier on how Manafort, his former deputy Rick Gates and their accountant, Cindy Laporta, misled her bank.
During her testimony, both defense attorney Jay Nanavati and prosecutor Uzo Asonye had her revisit her timeline of emails and phone calls leading up to Manafort closing a $3.4 million mortgage.
Prosecutors revealed in court Friday an email Paul Manafort sent to his then-son-in-law Jeff Yohai as he sought to cover up that a Soho condo he owned was rented out instead of lived-in.
Manafort needed an independent appraiser in early 2016 to confirm for a bank looking into the property that the condo was a residence.
He directed Yohai to meet with the appraiser, according to the January 2016 email.
Melinda James, mortgage loan assistant at Citizens Bank, finished testifying shortly after noon, after both defense attorney Jay Nanavati and prosecutor Uzo Asonye had her revisit her timeline of emails and phone calls leading up to Manafort closing a $3.4 million mortgage.
Then, AirBnB employee Darin Evenson took the stand. One allegation in Manafort’s bank fraud charge is how he told officials a property in New York was used as a residence or second home, while he listed it on the online vacation rental site.
Why all of this matters: Banks take into consideration the use of a property when determining how much to loan on it.
Mortgage assistant Melinda James testified Thursday morning on how Paul Manafort, Rick Gates and their accountant, Cindy Laporta, misled her bank, Citizens Bank.
The three did so when they secured a $3.4 million mortgage loan in March 2016 on a condo in Manhattan’s Soho neighborhood on Howard Street.
James walked through several application and insurance documents that Manafort provided the bank. The documents assured Citizens Bank that he had no other mortgages on his real estate properties and the condo was a residence for his daughter Jessica and her ex-husband Jeff Yohai, which Manafort called a second home.
In emails with Manafort and others, the bank employees raised concerns, including
She reached out to Manafort and Gates repeatedly for clarity, and they assured the bank several times their documents were correct.
Judge Ellis told the jury he was wrong in criticizing prosecutors yesterday for having one of their witnesses, an expert IRS agent, in the room to hear other witness testimony.
Prosecutors had reminded him following his scolding in front of the jury they had discussed allowing IRS revenue agent Michael Welch to sit in the courtroom.
“Put aside any criticism. I was probably wrong in that,” Ellis said to kick off the trial proceedings Thursday morning. “This robe doesn’t make me anything other than human.”
Welch testified Wednesday afternoon about the amount of unreported income Paul Manafort hid from the IRS in foreign bank accounts.
Prosecutors are now questioning their 19th witness, Melinda James. She is a mortgage loan assistant from Citizens Bank in New York, and received false documents from Manafort’s associates when they sought a mortgage on a property in New York.
Prosecutors are fighting back in a filing Thursday morning following several days of Judge T.S. Ellis growing increasingly angry with steps they’ve taken during their presentation of the case against Paul Manafort.
What’s in the filing: The filing specifically asks Ellis to tell the jury he was wrong when he chastised the prosecutors in the courtroom Wednesday.
It is likely Ellis will address this filing from prosecutors with them Thursday morning.
What happened: As IRS revenue agent Michael Welch testified as an expert witness, Ellis reprimanded prosecutors for allowing him in the courtroom to witness the proceedings of the previous week.
“But the next time we do this, it’s my clear recollection, Mr. Asonye, that I wasn’t admitting experts. You need to ask specifically. You’re going to go ahead now, I’m going to permit that, but I want you to remember that,” Ellis said, cutting into prosecutor Uzo Asonye’s questioning of Welch on Wednesday. Asonye reminded the judge they had discussed having Welch in the room, since he was testifying as an expert and not a fact witness.
Ellis continued, sternly, with the jury watching:
Note: The prosecutors had explicitly discussed at the start of the trial having Welch in the courtroom to hear other witness’ testimony, according to the court transcript from day one.
Their filing Friday asks Ellis to tell the jury the prosecutors didn’t act out of line by having Welch in the room.
The trial of former Trump campaign chairman Paul Manafort will resume at 9:30 a.m. ET today.
Prosecutors said they have about eight witnesses left to call to the stand. They’re still on track to end by Friday.
What happened yesterday: Manafort’s former deputy-turned-prosecutor’s witness Rick Gates returned for a third day of testimony. The day wrapped up with testimony from an IRS agent and joint statements from Manafort’s attorneys and prosecutors about agreed upon facts in the case.
The seventh day of Paul Manafort’s trial has ended, but is scheduled to pick back up tomorrow at 9:30 a.m. ET.
In case you missed it, here’s what you need to know about today:
Testimony in Paul Manafort’s criminal trial has just ended for the day.
The day wrapped up with testimony from an IRS agent and joint statements from Manafort’s attorneys and prosecutors about agreed upon facts in the case.
Prosecutors said they have about eight witnesses left to call to the stand. Prosecutors also said they’re still on track to end by Friday.
The trial will resume at 9:30 a.m. ET Thursday.
During cross-examination of FBI forensic accountant Morgan Magionos, defense attorney Richard Westling attempted to sow doubt in the case regarding the authenticity of the Paul Manafort signature on various documents that have been presented.
The defense compared several examples of Manafort’s signature on bank account information with a sample of his signature from a document that was seized from his home during the FBI’s raid.
The signatures appeared different — one was neat and complete with Manafort’s name; the other was a rushed squiggle that appeared to be just a few letters long.
She confirmed that she did not know who signed his name, only that she has to rely on documents provided by the financial institutions. She also testified that she did not know how Manafort’s passport copy made its way into Cyprus bank account documents.
At one point during this signature comparing exercise, Magionos observed, “It look a bit different but I’m also not a hand-writing expert.”
Prosecutor Greg Andres had a few follow up questions for her in re-direct examination and then she was dismissed.
Michael Welch, an IRS agent, is now testifying.
During prosecutors’ questioning, FBI forensic accountant Morgan Magionis presented several charts, documents and financial totals she put together regarding Paul Manafort’s foreign accounts and lobbying work.
Manafort collected a total of $65 million over four years in his foreign bank accounts for his Ukrainian political work. And from 2010 to 2014 he paid $15.6 million for real estate, landscaping, home improvement and personal luxuries.
Several times, Magionis told the jury the details she collected were voluminous.
Much of her testimony hearkened back to last week’s testimony from several vendors who sold personal luxury goods to Manafort. Magionis had tracked all of those transactions.
Following a break, the defense team will then have an opportunity to question her about her work on the investigation.
Prosecutors have not yet said which witness they will call following Magionis, though another witness could take the stand before the end of the afternoon.
Paul Manafort’s taste in fashion is back in the spotlight.
The jury returned from lunch to see documents showcasing how the FBI traced wire transfers from foreign bank accounts to retailers in the US.
The retailers were those who sold Manafort expensive goods — including the custom men’s clothier Alan Couture, where Manafort bought jackets made of ostrich and python skin.
While some of the documents shown in court Wednesday listed Manafort and his former deputy Rick Gates’ names on them, others showed how a Cypriot law firm run by “Dr. K,” Kypros Chrysostomides oversaw Manafort’s foreign accounts.
Prosecutors revealed in court two emails Manafort sent telling others they’d receive payments from the foreign accounts:
In all, the FBI agent showed payments to Alan Couture totaling $1,032,589.59. About a quarter of the total payment came from Manafort’s registered accounts in the US. Nearly $750,000 got wired in from overseas accounts to the men’s boutique.
Some amounts that Alan Couture billed Manafort exactly matched transfers from the shell companies, FBI forensic specialist Morgan Magionis testified.
Why this matters: Vendors including a former manager of Alan Couture testified last week that they knew the money from the foreign entities paid for Manafort’s orders, even though the vendors didn’t recognize the company names.
The court just went to recess as the personal drama substantially subsided in the last hour or so.
Prosecutor Greg Andres told Judge T.S. Ellis that he anticipated another hour of questioning with FBI forensic accountant Morgan Magionos after the lunch break.
Andres called Magionos to testify on the money trail that the government has uncovered in Paul Manafort’s various bank accounts.
Here’s what she told jurors:
A copy of Manafort’s passport was also presented as evidence in court Wednesday. The copy of his passport was found in documents for an account in Cyprus — directly linking Manafort to the account. His passport was also found in other account-opening documents.
Judge T.S. Ellis once again reminded prosecutors on Wednesday that they should wrap their case quickly.
“As a concession to the shortness of life, we need to get it done,” Ellis said, after prosecutor Greg Andres implored him to allow them to show the jury documents an FBI agent reviewed. “Now we need to bring it to a close and it’s lunchtime.”
Andres said his side has focused sharply on the accusations they need to prove.
Earlier in the morning, Ellis had reprimanded Andres for being impolite, while the jury watched.
After Ellis questioned whether defense attorney Kevin Downing followed the prosecutors’ lead from the day before in his inquiries of witness Rick Gates, Andres responded, “Yeah.”
Ellis turned to Andres: “Be careful about that. This is not an informal proceeding.”
Andres: “Yes.”
Ellis: “I beg your pardon.”
Andres: “Yes, judge.”
What happened earlier in the week
Ellis, privately, told Andres he needed to look at the senior judge while speaking to him, and accused him of having tears in his eyes, according to an exchange recorded in a court transcript that the jury and the public did not hear.
Defense lawyer Kevin Downing and prosecutor Greg Andres spent the first hour of Paul Manafort’s trial on Tuesday trying to distract the jury and one-upping the other’s set of questions for star witness Rick Gates.
Downing kicked off the questioning with a focus on what Gates told the FBI and Justice Department years before he was charged.
Ten minutes later, it was Andres’ turn to attempt to reverse damage done, since Gates had recounted throughout Tuesday a host of crimes he committed against Manafort, against the government. He admitted in detail to his own personal moral failures.
Did Gates have any doubt that if he lied in court or to the prosecutors, “the Special Counsel’s Office would rip up your plea agreement?” Andres asked in his final minute question Gates before handing the reins back to the defense. “No doubt at all,” Gates said.
Gates’ testimony is among the most important of the trial: It pits the longtime right-hand man and the boss face to face for the first time publicly since Gates flipped.
Following Manfort’s defense attorney’s question to Rick Gates on whether he had disclosed four extramarital affairs to the special counsel — a question to which prosecutor Greg Andres objected — Judge T.S. Ellis then had a private conversation, out of earshot of the jury, with both sets of lawyers about whether Downing could ask about other extramarital affairs.
What Manafort’s attorney said: Manafort’s attorney Kevin Downing had said he wanted to ask the question because it spoke to whether Gates had lied to the special counsel’s office, and whether Gates’ plea agreement would still be valid.
Once the judge talked to the lawyers, however, Downing wasn’t able to re-ask Gates the question about four extramarital affairs.
Instead, he asked Gates more broadly: “Does your secret life span over many years?”
Gates responded yes. “I made many mistakes over many years,” he said.
His three days on the witness stand then ended.
The witness Morgan Magionos, an FBI forensic accountant who traced Paul Manafort’s wire transfers, has been called to testify by the prosecutors, but he has not yet taken the stand.
The judge and attorneys discussed whether Magionos would be able to read emails Manafort sent and review his phone records. Judge T.S. Ellis is currently considering what he’ll decide.
The court proceedings have a break until 11:45 a.m.
During re-cross examination, defense attorney Kevin Downing suggested that Rick Gates may have had additional extramarital affairs when he asked Gates if he had disclosed to the government that he had four extramarital affairs.
Prosecutor Greg Andres objected to the question on relevance grounds, and they are now in bench conference with Judge T.S. Ellis.
Gates did not answer the question.
Gates previously admitted in court to having one affair almost a decade ago and expressed regret for it.
Rick Gates was asked by prosecutor Greg Andres during redirect questioning today whether the special counsel’s office had told him how to answer questions.
Here’s how he answered:
Gates previously testified that he had met with the government 20 times to prepare for his testimony in the Manafort trial.
Rick Gates has taken the stand once again this morning in the trial of Paul Manafort in Alexandria, Virginia.
He began at 9:52 a.m. ET with more cross-examination by Manafort’s defense attorney Kevin Downing. Downing finished cross-examination at exactly 10 a.m.
Downing began by asking Gates about an FBI interview that he and Manafort participated in July 2014 about payments from Ukraine. Gates had testified to this interview during his direct examination yesterday. At the time, Gates had not answered many details about what Manafort had instructed him to do during that period.
The interview was in regards to a forfeiture investigation between the Ukrainian gov’t and FBI. Gates testified that he personally had revealed to the FBI that they had accounts in Cyprus and St. Vincent and the Grenadines — he said that he and Manafort did meet before his interview and that Manafort said that they should be “open” about the bank accounts. Gates testified that he named several of the banks accounts during his interview with the FBI.
Downing asked if he was “open and truthful” with the investigators. Gates replied that he had been.
Downing ended the cross-examination with a question about whether Gates was aware of Manafort’s net worth in the 2015-2016 period. Gates answered that he wasn’t privy to Manafort’s personal net worth but he thought it would be in the realm of $6-10 million.
What happens next: Prosecutor Greg Andres estimated that he would need about 30 more minutes for redirect examination of Gates.
Court started today at 9:50 a.m. ET, marking the 7th day of trial for President Trump’s former campaign chairman Paul Manafort.
The judge is now on the bench.
What we’re expecting today: Manafort’s former deputy-turned-prosecutor’s witness Rick Gates returns to the courtroom today for a third day of testimony.
Paul Manafort’s former deputy-turned-prosecutor’s witness Rick Gates is expected to return to the courtroom Wednesday for a third day of testimony against the former Trump campaign chairman.
Yesterday, on Day 6, Gates testified against Manafort for more than six hours.
Gates described in detail his crimes against his employer and even an extramarital affair he’d had, while turning the knife on his longtime boss by outlining the crimes he claims Manafort directed him to commit.
Manafort’s team, meanwhile, has hung much of its strategy on carving away at what Gates says.
Defense attorney Kevin Downing pushed as hard as he could for the last two hours of Tuesday’s proceedings to get a rise out of Gates, who refused to engage with more than flat, passionless responses.
Gates even refused to call the man he had known for decades and worked under for years “Paul,” instead referring to the defendant as “Mr. Manafort.” The pair avoided all eye contact.
Day six of Paul Manafort’s trial has concluded. Here’s everything you need to know:
Upon leaving the courthouse, Paul Manafort’s attorney Kevin Downing was asked how Tuesday’s testimony went.
Downing grilled Manafort’s former deputy Rick Gates on the stand, asking him about an extramarital affair and embezzlement.
Testimony in the criminal trial of Paul Manafort has ended for the day.
Defense attorney Kevin Downing closed by asking Rick Gates about foreign accounts in Cyprus and the UK.
The exchange that ended the day was nowhere near as heated as the back-and-forth that preceded it. Downing questioned how the jury could believe Gates “after all the lies you told and fraud you committed.”
The trial will resume Wednesday at 9:30 a.m. ET.
Downing said cross-examination will likely continue for an hour.
During the examination of more evidence, Rick Gates referenced again that he had been directed to commit fraud by Paul Manafort.
Defense attorney Kevin Downing asked if Gates could prove any of these directives in any evidence that had been presented, saying that Gates had claimed throughout all his testimony that he and Manafort had “discussed” these acts — he then segued into a larger character assassination, repeating several times to Gates, “This jury is supposed to believe you? After all the lies you’ve told?”
Gates replied that, yes he should be believed. When pressed further by Downing, Gates elaborated:
Downing followed up this moment by asking Gates if he had returned any of the money that he had embezzled from Manafort — Gates replied, no.
Rick Gates told jurors he made a mistake and was living beyond his means as defense attorney Kevin Downing dug into him about how he embezzled from Paul Manafort, his longtime boss, using an offshore bank account that’s part of Manafort’s alleged crime.
“I was living beyond my means,” he explained.
Gates said his wife was aware of the account he used to siphon money off of Manafort. He also said she aware of his “secret life.” (Downing was alluding to the extramarital affair Gates admitted earlier in the afternoon.)
Downing continued to highlight to the jury and Gates how he had embezzled from Manafort.
Downing: “Why won’t you say embezzlement?”
Gates: “What difference does it make?” (He also repeated his phrasing that he submitted “unauthorized” expense reports to Manafort’s company.)
Downing: “Why won’t you say embezzlement?”
Gates: “It was an embezzlement from Mr. Manafort.”
Gates refrained from showing much emotion as Downing tested him. Downing paused then moved onto other questions.
The intense exchange came after the defense lawyer and the longtime Manafort right-hand man reviewed almost $200,000 that Gates had transferred into his own bank account, listed under the holding company Bade LLC, from one of Manafort’s shell companies, Global Endeavor.
Gates admitted at this time during the testimony “it was Mr. Manafort’s money.”
Downing asked, “Were these payments for your secret life?”
“The answer is no, they’re not,” Gates said.
Paul Manafort’s defense counsel asked Rick Gates if he had been interviewed about his time on the Trump Campaign by the special counsel’s office.
Prosecutor Greg Andres objected to the question before Gates could answer.
The judge asked prosecutors and defense counsel to come to the bench, where they spoke for five minutes before the judge called a 30-minute recess.
When court resumed, the judge did not address the issue. Gates returned to the stand and the defense’s questions focused on financial issues.
In court, Rick Gates admitted to having an extramarital affair a decade ago, but disputed the contention from Manafort’s lawyer that he was embezzling money in order to fund his affair.
Manafort’s defense lawyer raised Gates’ affair by telling jurors that Gates had a “secret life,” living in London and other cities and using Manafort’s money in offshore accounts to pay for the relationships.
Gates acknowledged the affair, but he bickered with Manafort’s attorney over where the money came from, suggesting it was money from bonuses.
Downing also raised the prospect that Gates reimbursed personal expenses from the Trump inauguration. Gates said he could not recall whether he did so, but conceded it was possible.
About 10 minutes into the defense’s questioning of Rick Gates, the longtime deputy who turned on Paul Manafort, Gates remained unfazed, flatly answering about lies he told the Special Counsel’s Office when reaching his plea agreement and about money he siphoned from Manafort’s business.
Manafort’s defense lawyer Kevin Downing has been trying to rattle him, getting worked up with more sharply worded and provocative questions by the minute.
Had the Special Counsel’s Office “confronted you with so many lies you can’t remember any of it?” Downing asked, getting red in the face, louder and emphasizing each word in his questions.
Downing pressed Gates about his “scheme” to take money from Manafort and about “false and misleading” information he told the Special Counsel’s Office before finalizing his plea. Downing used those words several times in a row in his questions.
Gates responded that senior Special Counsel’s Office prosecutor Andrew Weissmann had confronted him with a lie Gates told to Robert Mueller’s office about a meeting he hadn’t attended, after Gates had begun negotiating a plea agreement.
That lie led to a second charge Gates pleaded guilty to in D.C. federal court. The first charge Gates admitted to was for the lobbying conspiracy with Manafort.
At first, Gates said he had struggled to provide information to the Special Counsel’s Office, implying he had misremembered a detail about a Manafort meeting years before, which led to his guilty plea for lying to investigators. Then, after Judge T.S. Ellis asked Gates a followup question about what he pleaded to, Gates clearly said he had lied to the Special Counsel’s Office.
Downing also dug into Gates’ embezzlement of Manafort’s business monies, crimes he has not been prosecuted for but admitted to the prosecutors and in court previously. Gates said he could not remember which transactions on a list Downing showed him were legitimate and which were ones he had created to steal funds from his boss.
When Downing again got worked up and lobbed at him the question, “Did you develop a scheme?” Gates replied succinctly and without emotion, “I just added numbers to the reports.”
Gates has said in some of his responses so far that he did not know what Downing meant as the defense lawyer referred to several filings Gates made to Manafort while the pair did business together.
Downing asked Gates whether he had also submitted false expense reports to the President’s inaugural committee. Gates replied he had not told the Special Counsel’s Office that in his confessions, and said the inaugural expenses were closely tracked by others.
The Manafort trial resumed at 3:13 p.m. ET this afternoon as Rick Gates took the stand again to testify, this time in a round of cross-examination lead by Kevin Downing from the defense team.
Downing sought to establish Gates’ pattern of lying right from the beginning by asking him about his plea deal with the Office of the Special Counsel, and forcing him to admit several times that he lied to the Special Counsel before he took the plea deal.
Gates said that he met three or four times with the Office of the Special Counsel in late January 2018.
In February, he accepted the plea agreement – Gates reiterated today that he has met with the Office of the Special Counsel 20 times since that plea deal was struck.
Gates has been blinking frequently as he gives his testimony, while Downing has been strident in his questioning, pushing Gates again and again on his plea deal.
The jury saw several emails between Paul Manafort and Rick Gates, where Manafort asks for help converting PDF and Microsoft Word files related to his 2016 profit and loss document.
“How do I convert into non pdf word doc?” Manafort emailed Gates in October 2016, forwarding along his 2016 P&L statement in PDF format.
Gates replied that he would do it and sent back the Word version: “Here you go.” Gates testified that he did not change any numbers on the Word document, but noted that some formatting would get messed up in the conversion.
Manafort then made edits to the Word document and sent it back to Gates, saying he had “attached a revised P&L.” The new document showed a net profit of over $3 million.
Manafort requested that Gates then convert the new Word document back to PDF — the format of the original file.
Two weeks after Donald Trump’s election, Paul Manafort recommended banker Stephen Calk as Secretary of the Army, Rick Gates told the court Tuesday. Calk is a banker whose bank allegedly loaned Manafort money on false pretenses.
Manafort emailed Gates again two days before Christmas in 2016. Manafort told Gates he had attached contact information for various people he wanted to go to Trump’s inauguration. That list included Calk and his son.
At that time, Manafort had resigned as campaign chairman, but Gates still worked in the president’s transition team and worked on the inauguration.
Calk was allegedly involved in having his bank, Federal Savings Bank, extend a mortgage based on fraudulent financial details to Manafort in 2016.
Calk also received a slot on Trump’s election economic advisory council, Gates testified. Prosecutors and Gates spoke about emails with Trump’s staff throughout 2016 during the court proceeding Tuesday afternoon.
At 2:14 p.m. ET was the first time the jury heard from a witness during Manafort’s financial fraud trial the extent of Manafort and Gates’ work for Donald Trump’s 2016 presidential campaign and transition.
Prosecution finished questioning Gates at 2:25 p.m. The defense will have its chance to question Gates beginning at 2:45. The court is currently on a break.
Rick Gates has resumed testimony in the trial of Paul Manafort, retaking the stand around 1:35 p.m. ET.
For the past 30 or so minutes, Gates has been explaining fraudulent bank loan applications that he and Manafort allegedly created during March of 2016, the time that they would have been working for the Trump campaign.
Several email threads presented by the prosecutors as evidence show messages from March 16, 2016 in which Gates attempts to secure a loan for Manafort from the Banc of California. In one message, Manafort called Gates “the quarterback” on all document preparation. Gates admitted to falsifying the profit and loss statements that were required by the bank in order to secure the loan.
Gates said that he lied on the bank loan application by overstating Manafort’s income by approximately $6 million. He sent the email to the Banc of California anyway, attaching a 2015 falsified profit and loss statement. Manafort was on the email.
In another email dated March 21, 2016, there was an email chain with Gates, Manafort and Citizen’s Bank employee David Fallarino, who wrote back that in order to get the loan “we will have to get creative in terms of income” for 2015.
After the jury was dismissed Monday evening, Judge T.S. Ellis and prosecutor Greg Andres clashed over the prosecutor’s perceived body language.
Ellis scolded Andres for lowering his gaze and demanded that Andres look him in the eye when addressing him. Andres defended himself by saying he didn’t want to reveal any facial expressions.
Last week, Ellis had reprimanded lawyers on both sides for rolling their eyes and requested that they “rein in their facial expressions.”
Andres and Ellis also got into a debate about the relevance of asking certain questions about political work done in Ukraine. Ellis said he would point to the record to show that he rarely interrupted Andres’ questions.
Andres, who clearly disagreed, replied, “I will stand by the record as well.”
Ellis shot back, “You will lose.”
At the end of their heated exchange, though, the mood softened a bit. Andres told Ellis that he “didn’t mean to be disrespectful,” and Ellis assured him that he was “not worried at all.” Ellis reflected on the stress and pressure of high-profile cases and noted that he was just trying to “minimize the stress time.”
Rick Gates provided specifics about how he and an accountant for Manafort prepared fake documents to send to a bank to secure a loan.
In 2012, Manafort had collected money from Ukrainians in his shell company Peranova Holdings. To avoid paying taxes on that income, Manafort had told his accountants it was a $1.5 million loan, witnesses have said in court.
Four years later, when Manafort’s Ukrainian lobbying income had dried up, the political operative wanted new loans from banks. But the banks worried Manafort didn’t have the cash to support payments on that Peranova loan from years before.
That’s when Gates and accountant Cindy Laporta worked together to create fake documents — a cover letter from Laporta’s accounting firm and a back-dated loan forgiveness statement from Peranova to Manafort, signed by Manafort’s Cypriot law firm — to show the Peranova loan was forgiven, becoming income.
Prosecutors walked Gates through several emails Tuesday, saying as much.
Gates’ testimony corroborated what Laporta had explained to the jury last week, and he filled in the plan by recounting emails between him, Manafort and the accountant.
“Did he ultimately approve?” prosecutor Greg Andres asked Gates about Manafort’s knowledge of the plan. “He did,” Gates said in court Tuesday. The loan “never existed in the first place?” Andres also asked. Gates said that was correct, and that he told Laporta he would create the Peranova documents needed for the bank’s approval.
Andres asked Gates if the faked letter was effectively saying the loan forgiveness was “between Mr. Manafort and Mr. Manafort.” It was, Gates replied.
Laporta, Manafort’s personal and business accountant with the firm KWC, testified on Friday at length about how she knew the documents were faked and wrote the sham cover letter at Gates’ request for Manafort.
Gates also described in detail how he sent an out-of-date insurance policy to a bank to prove a Manafort-owned property had no mortgage on it, when current documents would have shown it did.
Citizens Bank had questioned whether it could loan Manafort money backed by a property that the bank thought was already encumbered.
“Mr. Manafort had asked me to submit the prior year’s policy,” Gates explained to the jury Tuesday. “The circles are now squared,” Gates wrote to Manafort in an email in 2016 about convincing the bank there was no mortgage on Manafort’s Union Street property.
Gates’ testimony about the bank fraud was somewhat dull in the last 30 minutes before lunch. A few spectators in the courtroom nodded off, yet several jurors took close notes. He returns to the stand after lunch.
Rick Gates testified Tuesday about money issues that Manafort and his various entities began to experience in 2015 and 2016.
Gates characterized the period by saying that vendors would reach out to him and Manafort because “loans had not been paid.”
Gates said at the time he worked on the presidential campaign, his salary was paid by savings and investments from Manafort. Gates also received income from Map Global Holdings, a PR and movie production company; and ID Watchdog.
In government exhibit 375, which was not dated, an email exchange between Manafort and Gates succinctly summarized the frustration felt by Manafort: “WTF,” Manafort wrote to his employee.
Gates admitted that during this time he also supplied false information to banks in order to help Manafort secure bank loans. He admitted to altering the profit and loss documents, which he said was per Manafort’s direction.
In January 2016 Manafort asked Gates to refinance a property in New York City on Howard Street — a property that Manafort never lived in because he stayed at his Fifth Ave apartment when he was in the city, but still claimed to use as a second home in order to secure maximum benefits for the mortgage refinance loan.
The word “Trump” came up in trial today, but it is unclear who it is a reference to.
Prosecutors showed the jury notes that reference “Trump” from a meeting Rick Gates and Paul Manafort had.
According to the notes, in 2013 a “Trump” was apparently set to receive Yankees tickets from Manafort, though neither the notes nor prosecutors specified which Trump was being referenced.
“Tickets going to Trump next week,” the meeting notes said. The reference on the document fell under the item “Yanks,” meaning Yankees season tickets Manafort had purchased for several thousand dollars.
The first bullet point under the “Yanks” header said the tickets were “never received.”
Prosecutors did not lead Gates into explaining more detail about the apparent perk — or which Trump it was referring to. Neither Gates nor prosecutor Greg Andres uttered the word “Trump.” The agenda was merely shown on screen for a few seconds to the jury.
The Yankees tickets haven’t been fully explained in the context of Manafort’s fraud case, though prosecutors have alluded in previous court filings and in court that the season tickets were a suspicious purchase of Manafort’s that plunged Manafort into debt years later. A Yankees employee is on the prosecutors’ witness list but has not yet been called to testify during the trial.
The meeting agenda shown in court Tuesday with the “Yanks” reference also showed how Manafort put Gates in charge of reviewing Manafort’s taxes with an accountant and working with their Cypriot law firm on moving money between Manafort’s foreign accounts.
Donald Trump himself has not come up yet in the trial, though prosecutors and witnesses have referred to Manafort’s Trump Tower apartment as among the real estate properties he falsely described to the banks as his residences.
The Trump Tower apartment, in fact, was used like a rented hotel room for Manafort and his associates when they traveled to New York City, a witness testified last week.
Rick Gates testified Tuesday that he and Manafort were interviewed by the FBI in July 2014 in connection with a forfeiture investigation that the Ukrainian and United States governments were working on.
Gates recalled that he was told they were not under investigation at the time and that investigators asked him questions about his work in Ukraine.
Gates said he and Manafort were interviewed separately, and Gates went first.
Gates testified that after he was interviewed, Manafort asked him to speak with one of their Ukrainian businessmen about the FBI interview. Gates said they met in France.
Direct questioning of Gates will likely continue for another two hours, according to prosecutor Greg Andres.
Last week, the government case referenced several ”mystery invoices” that appeared to be falsified.
On Tuesday, during direct questioning of Rick Gates, he acknowledged that he was the one who had created these invoices for fake amounts of money for wire transfers. The prosecutor directly asked him if they were “fake” — Gates replied that they were “modified” invoices. He asserted that the payments were still legitimate.
The money never actually went to the vendors, like Big Picture Solutions; instead, Gates testified that the money went to banks.
Gates testified that he used information provided by Manafort to create the invoices. The purpose of this, according to Gates, was that the wire transfers would not be recorded on United States business records.
Paul Manafort directed moving money through Cypriot accounts over email, Rick Gates testified Tuesday morning.
Prosecutors began to show emails between Manafort and Gates Tuesday morning that confirm Gates’ story that Manafort directed moving the money his consulting company earned from Ukraine through Cypriot accounts.
One sent in November 2011 was especially condemning.
Gates had written to Manafort about transferring money from one of Manafort’s shell companies, Leviathan Advisors Limited, to their above-board consulting group, DMP International. “Unless you approve otherwise,” Gates ended his note proposing the transfer.
“This works. Proceed as you lay it out below,” Manafort wrote back, signing his email with the letter “P.”
The subject line of the email was “Payments.”
Moving the accounts
At some point during the European banking crisis, Manafort’s law firm in Cyprus that oversaw the legal process of setting up the accounts moved them to the country St. Vincent and the Grenadines, in the Caribbean.
Around that time, Manafort asked for his name to be removed from the bank account registrations, Gates said. Gates said his name was taken off some but not all legal documents in the foreign country.
Gates said Manafort especially wanted to avoid having his name listed in any documents linked to the accounts because he was embroiled in a lawsuit with someone in Ukraine.
A second email
Another email prosecutors showed and Gates confirmed came in 2015, from Konstantin Kilimnik to Gates discussing money a Ukrainian client had not yet paid Manafort’s firm through the accounts.
At the time, Manafort was dry on cash and beginning to panic.
Prosecutors have alleged that around this time he was using the hollow foreign accounts to help him reduce the taxes he paid to the US government and defraud at least one bank into giving him a loan.
“This is to calm Paul down,” Kilimnik wrote to Gates. “I think the wire will go next week realistically.” Gates told the court that “Mr. Manafort was quite upset money had not been sent,” and Kilimnik wanted to show the boss they were making the effort.
That contract for 1 million euros, with Ukrainian Sergei Lyovochkin and executed between shell companies both sides used, was never paid in full.
Rick Gates started his morning of testimony getting into the gritty details of exactly how much money each Ukrainian billionaire contracted Manafort for — showcasing the amount of money that was flowing into the hidden Cypriot accounts in 2011 and 2012.
It amounted to at least 5 million euros, according to Gates’ Tuesday testimony. That’s about $5,800,000 in today’s US dollars.
Prosecutors and Gates showed the jury four different contracts where a Ukrainian’s shell company agreed to pay a Manafort shell company for overseas political or policy consulting work. In one instance, the payment supported lobbying in the United States, Gates said.
Manafort reported some of the payments to tax authorities in the US as loans — though they were income, Gates said.
The consulting contracts showed Manafort’s entities like Black Sea View Limited, Peranova Holdings and Leviathan Advisors Limited would earn more than 5 million euros from the Ukrainian billionaires Sergei Lyovochkin and Sergei Tigiko.
The Ukrainians used shell companies called Telmar Investments and Dressler Holdings to enter into the agreements and make the payments to Manafort, Gates said.
The companies, which Gates has referred to as “shelf” companies in his testimony, had no employees and sold no products. Their sole reason for existence was to accept payments, he said.
Note: An earlier version of this post incorrectly stated 5 million euros equated $5,794,415,000 in US dollars. That was a few too many zeros. It is about $5,800,000.
Rick Gates has taken the stand again in the Paul Manafort trial in Alexandria, Virginia.
He entered the court room at 9:35 am wearing a dark navy suit and light blue tie.
Justice Department lawyer Greg Andres, who was questioning Gates for all of yesterday’s testimony, resumed his questioning.
He began by asking about the Cyprus bank accounts that Ukrainian businessmen had asked Gates and Manafort to set up for payment purposes.
During his testimony on Monday afternoon, Rick Gates offered some insight into his cooperation with the government.
Gates testified that he had met 20 times with the government to prepare for Monday’s testimony.
He said that he had turned over evidence to the government and that the government has promised not to bring any additional charges.
Gates admitted to three other crimes that had not been previously known: He lied on a mortgage application; he lied on credit card applications; and he filed false expense reports to employer.
Gates was extremely forthcoming about the crimes he – and Manafort – allegedly committed, admitting over and over that, “yes,” he knew he was lying to the accountants, lying about having foreign accounts, lying to investigators during an initial meeting.
One of the first pieces of evidence Gates read from was his plea agreement. He admitted that he had conspired against the government with Mr. Manafort from 2008-2015.
Paul Manafort’s former deputy-turned-prosecutor’s witness Rick Gates returns to the courtroom Tuesday for a second day of testimony against the former Trump campaign chairman.
The testimony is poised to pack even more drama into the courtroom than the 78 minutes Gates was on the witness stand a day earlier, as Manafort’s defense team will get the chance to cross-examine Gates — and they’ve made clear the crux of their defense will be to blame Gates for Manafort’s alleged crimes.
Gates was a deputy to Manafort in his lobbying business and then on the Trump campaign, but after flipping and pleading guilty to charges earlier in February, he testified against Manafort on Monday that they had 15 foreign accounts they did not report to the federal government, and they knew it was illegal.
Gates also told jurors that he cheated Manafort out of “several hundred thousand” dollars, which is likely to be a threat Manafort’s attorneys pull on to try to undermine Gates’ credibility with the jury.
Manafort is charged with 18 counts of tax and banking crimes, and has pleaded not guilty to all charges.
Special counsel Robert Mueller’s team indicated it expects to question Gates for three more hours on Tuesday before the defense team will get its chance to grill him.
On Monday, Gates described his history of working with Manafort, his plea deal and how Manafort’s consulting business operated in Ukraine. But there are plenty more details that were laid out in the indictment against Manafort that Gates hasn’t yet discussed that will likely be raised on Tuesday.
Gates’ testimony is expected to be the key focal point of the Manafort trial, the first that Mueller’s team has brought before a jury as part of the broad investigation into Russian election interference in 2016.
Trump hasn’t tweeted about Manafort since the first day of the trial last week, and the trial itself is not about the work Manafort did on the campaign. But Gates’ testimony pits two former senior Trump campaign aides against one another. After Manafort left the campaign in August 2016 amid swirling questions about his Ukraine work, Gates stayed on the campaign and later helped found pro-Trump advocacy group, before he was ultimately forced out, too, as questions mounted about Manafort.
The fifth day of Paul Manafort’s trial has ended, but is scheduled to pick back up tomorrow at 9:30 a.m. ET.
Here’s what you need to know from today in court:
Rick Gates’ testimony stopped at 5:34 p.m. ET, when Judge T.S. Ellis excused the jury for the day. Court will resume tomorrow at 9:30 a.m. ET.
Gates, carrying a copy of a Dan Brown novel, exited the courtroom with his attorney.
He did not speak to anyone on his elevator ride down.
Gates told the jury he helped Manafort file false tax returns by lying to his boss’ accountants about under-reporting income, creating false loans, and not disclosing Manafort’s ownership of the foreign accounts.
In each of those instances Gates told the jury he lied “at the direction of Mr Manafort.”
Prosecutor Greg Andres began walking Gates through his plea agreement with Gates explaining his legal trouble increased after he lied to prosecutors during the investigation.
Rick Gates said he had been cheating Paul Manafort out of money to the tune of “several hundred thousand” dollars.
Gates told the jury that as part of his plea with the government, he revealed several other crimes that were not previously known and are not in the federal indictments of him and Manafort.
Gates said he stole the money from Manafort by submitting to him false expense reports.
Those expenses paid to him came out of the foreign bank accounts in Cyprus that Gates said he and Manafort knowingly did not disclose to the federal government.
Gates said he also created a fake letter to an investment company for a different colleague, Steve Brown. He also overreported his income on mortgage and credit card applications and lied to his own personal tax accountant.
Gates said on the witness stand that the government has agreed not to oppose his attorney when he asks for probation for his crimes. A sentencing date has not yet been set in DC federal court.
Gates did not make eye contact with Manafort as he took the stand wearing a yellow tie and navy blue suit.
But Manafort stared directly at Gates as he read aloud the details of his plea agreement, which could see him receive a reduced sentence, at the direction of a prosecution lawyer.
During his Monday testimony, Rick Gates clearly stated he and Paul Manafort had 15 foreign accounts they did not report to the federal government, and knew it was illegal.
He said he did not submit the required forms “at Mr. Manafort’s direction.”
Rick Gates — who was Manafort’s right-hand man in their multimillion-dollar political consulting business and was also a deputy campaign manager for Trump — has taken the stand.
Gates is now telling the court about his admission that he committed crimes alongside Manafort, to which he pleaded guilty and agreed to cooperate with the federal investigators.
Gates also spoke generally about how he worked for Manafort from 2006 until 2016.
Even though he met Manafort more than two decades ago at a holiday party, they did not spend time together socially, he said.
Gates and Manafort have not yet made eye contact. Gates, in a yellow tie and navy suit, is clean-shaven for his first appearance in court since he pleaded guilty to charges in federal court in DC in February — at that time, he had grown a beard.
The government has now called Rick Gates to the stand. He is in the courtroom.
Why this matters: Gates, who served as Manafort’s right-hand man in their multimillion-dollar political consulting business and was also a deputy campaign manager for Trump, agreed to a plea deal with special counsel Robert Mueller to give evidence against his former boss in return for a potentially reduced sentence.
This will represent the biggest test yet for Mueller’s investigation – even though this case does not directly play into the issue of alleged cooperation by the Trump campaign in Russian election meddling.
Shortly before the defense wrapped its cross examination of Paul Manafort’s former accountant Cindy Laporta, Manafort attorney Kevin Downing seemed to imply that Rick Gates had embezzled “millions of dollars” from Manafort.
Downing asked Laporta this: If she had known that Gates had embezzled money from Manafort, would she would have called Manafort?
Laporta replied yes. (Prosecutor Uzo Asonye objected to Downing’s question, but was overruled.)
Downing followed up: He asked Laporta whether knowing about Gates’ alleged embezzlement would have caused her not to trust Gates.
Laporta again said yes — but added that she was “not sure how that scenario could have happened.” (Downing acknowledged that accounting firm KWC was not retained to detect fraud.)
Rick Gates will be the next witness to testify, according to Downing.
Prosecutors said they have about 15 minutes of redirect for accountant Cindy Laporta. Then the defense will be able to re-cross examine.
After that: According to Manafort’s lawyer, Rick Gates will be up next.
Paul Manafort’s defense attorney, Kevin Downing, drew out more details about his client’s total tax burden during questioning of key witness accountant Cindy Laporta.
Here’s what we learned:
The document also showed that more than 10 years ago, Manafort’s consulting company received millions of dollars in payments from what was listed as “Russian NGOs.”
No further details were given on these payments reported to the IRS, and they did not appear to arise on his tax returns in the years for which he’s facing tax-related criminal charges, from 2011 until 2015.
Prosecutors have not yet discussed any payments they believe Manafort may have taken directly from Russians. Their case largely centers on what Manafort did with money earned through his Ukrainian political consulting work.
Rick Gates, Paul Manafort’s former right-hand man, will be the next witness to testify in Manafort’s criminal trial, defense attorney Kevin Downing said in court around 2:35 p.m. ET.
He is not on the stand yet, but will likely testify beginning Monday afternoon.
What you need to know about Gates: Gates served as Manafort’s right-hand man in their multimillion-dollar political consulting business and was also a deputy campaign manager for Trump. He agreed to a plea deal with special counsel Robert Mueller to give evidence against his former boss in return for a potentially reduced sentence.
Why his testimony matters: When he takes the stand, it will represent the biggest test yet for Mueller’s investigation even though this case does not directly play into the issue of alleged cooperation by the Trump campaign in Russian election meddling.
The trial of former Trump campaign chairman Paul Manafort has resumed Monday afternoon in Alexandria, Virginia.
Cindy Laporta, Manafort’s former accountant, has taken the stand again for cross-examination lead by defense attorney, Kevin Downing.
Prosecutors mentioned to Judge T.S. Ellis that marital infidelity could come up in the cross-examination of a witness and the lawyers would like to talk to the judge before that questioning proceeds.
It’s unclear which witness this situation could apply to.
They also said two FBI forensic accountants who are on the witness list and want to present transaction summaries to the jury are not likely to take the stand Monday afternoon. It’s unclear which witness may follow Laporta.
The tax and bank fraud trial of President Trump’s former campaign chairman Paul Manafort resumes this afternoon with Rick Gates, the prosecution’s key witness, expected to testify.
What you need to know about Gates: Gates served as Manafort’s right-hand man in their multimillion-dollar political consulting business and was also a deputy campaign manager for Trump. He agreed to a plea deal with special counsel Robert Mueller to give evidence against his former boss in return for a potentially reduced sentence.
Why his testimony matters: When he takes the stand — possibly as early as late Monday or on Tuesday — it will represent the biggest test yet for Mueller’s investigation even though this case does not directly play into the issue of alleged cooperation by the Trump campaign in Russian election meddling.
Learn more about Gates in the video below:
Testimony in the trial of former Trump campaign chairman Paul Manafort kicks back up at 1 p.m. ET today.
Here’s what you need to know about the first four days of the trial:
Prosecutor Greg Andres said they plan to offer evidence that would show Paul Manafort’s own lawyer said that Rick Gates was “not involved” with certain bank records from Cyprus, potentially undercutting the defense’s theory that Gates was calling the shots.
Just before the trial broke for lunch, Andres said during the investigation the special counsel’s office served a subpoena on Manafort asking him to provide his own bank records from accounts held in Cyprus.
Manafort complied with the subpoena and included in the response a note from his attorney, Kevin Downing, stating that Gates was “not involved” with these bank records and they belonged to Manafort. Prosecutors want to introduce that evidence and are working with Manafort’s attorneys to reach agreement on how that evidence is entered. Andres said they may anonymize or redact Downing’s name since it could be viewed by the jury as a conflict.
Gates is the prosecution’s star witness and is expected to take the stand early next week. Manafort’s attorneys have painted Gates as the orchestrator of the alleged fraud.
Downing is on deck to question Cindy Laporta, Manafort’s accountant who testified that she knowingly sent banks fake documents, when the trial resumes Monday afternoon.
The fourth day of testimony in the criminal trial of former Trump campaign chairman, Paul Manafort, has just wrapped up. Here’s everything you need to know from day four of his trial:
Accountant Cindy Laporta testified that Paul Manafort asked her in August 2016 — his last month as chair of Donald Trump’s campaign — to falsify numbers related to his company’s profits.
He told her that the financial statement for his company should reflect money billed but not yet collected in Ukraine. Manafort’s company did not do its accounting in that way. He told Laporta that the income would be received in November 2016.
The jury also saw Manafort’s email requests to Laporta.
Laporta testified that she didn’t send the financial statement to the bank because she never received the documentation to back it up.
Witnesses have testified that Manafort’s company was broke after his Ukrainian work dried up in 2014.
Testimony in the criminal trial of Paul Manafort has ended for the day.
Accountant Cindy Laporta, who testified Friday that she sent a fake letter to a bank to help Manafort secure a loan, will return to the witness stand at 1 p.m. ET Monday.
Prosecutors completed their direct questioning of Laporta on Friday. The defense team will have the opportunity to question her on Monday.
Cindy Laporta testified that a letter she sent from a shell company to Citizens Bank to help Paul Manafort get a multimillion-dollar loan was a fake.
The Manafort-controlled shell company Peranova Holdings had “loaned” Manafort $1.5 million for several years — a fiction in itself because it helped Manafort reduce his taxable income, prosecutors have alleged.
In 2016, when Manafort sought a legitimate Citizens Bank loan, the bank said it worried that his company DMP International didn’t have enough cash to pay back its debt to Peranova. So, Gates sent Laporta, an accountant who inherited Paul Manafort’s account in 2014, a forged loan forgiveness letter from Peranova back-dated half-year earlier.
Gates told Laporta in an email he would “chase down the signatures,” effectively acknowledging the letter he provided from the supposed lender wasn’t real. The fake letter was later signed by a “Georgia Chrysostomides.”
Here’s the letter:
Laporta then took the fake letter and created another letter on her tax firm’s letterhead endorsing it. She sent it all to Citizens Bank in an email attachment from her office the evening of February 2016.
Prosecutors showed the jury the false documents, including the one Gates made was a Microsoft Word file — which is easily editable — and the one Laporta sent to the bank was a pdf file, which carried more security.
Laporta, who has immunity for prosecution in exchange for her testimony, testified that she knew the documents were counterfeit. She also said both Manafort and Gates knew what she provided to the bank.
Prosecutors alleged Paul Manafort misled banks when applying for mortgages on two New York City properties, one on Howard Street and another on Union Street.
They showed the jury an email that Manafort sent to David Fallarino at Citizens Bank in January 2016, indicating that the Howard Street property was listed as a second home in his tax returns.
Accountant Cindy Laporta testified that she spoke with the banker from her office in Alexandria and told him the Howard Street property had been used as a second home.
She told the jury that it was “inconsistent” with Manafort’s tax filings.
Prosecutors showed the jury an email that Manafort’s former deputy Rick Gates sent in March 2015 to Laporta, indicating the Howard Street property would be used as a rental that year. The Howard Street property reported earning more than $115,000 in gross rent on Manafort’s 2015 tax returns.
Treating it as a rental property for tax purposes allowed Manafort to reduce his tax obligations, Laporta said.
Why this matters: Prosecutors have alleged Manafort misled the bank by falsely stating the property was a second home to get a better interest rate, instead of revealing he was renting it out through Airbnb.
“A second home [interest] rate is typically better than a rental” property, Laporta explained.
“I very much regret it,” accountant Cindy Laporta said on the witness stand Friday as she described how she knew her firm falsified a loan amount at the request of Rick Gates to help Paul Manafort pay less in taxes.
The loan on the books was for $900,000 from a shell company called Telmar Investments Ltd. Gates had asked her colleagues to fudge that number in September 2015 up to that amount.
The tax return Laporta ultimately filed for Manafort for 2014 was wrong. What she did was “wrong,” Laporta said.
Reporting a fake amount allowed Manafort to pay less in taxes, she said.
When asked why she went along with the false loan amount, Laporta explained, “I had a couple of choices at that point. I could have refused to file a return,” which would have opened her firm up to legal risk.
Or, “I could have called Mr. Manafort and Rick Gates liars.”
But Manafort was a longtime customer, so she chose to do neither, and KWC filed the tax return.
Accountant Cindy Laporta described to the jury on Friday how tax professionals from her firm inappropriately discussed changing the amount of a loan on their books for Paul Manafort.
Manafort’s deputy Rick Gates suggested in an email in September 2015 raising the amount of a loan by several hundred thousand dollars. That’s when former KWC accountant Conor O’Brien told Gates, “The loan amount may need to be changed.”
Ultimately, the accountants listed the loan at $900,000.
“It resulted in a tax amount due that Rick said could be paid by Mr. Manafort,” Laporta testified.
Prosecutors did not specify which entity extended the “loan” to Manafort. Several times during the trial, prosecutors have pointed out how loans from Manafort and his shell companies were forgiven without ever being paid down.
Loans are taxed at a different rate than income.
Laporta has immunity from prosecution in order to provide testimony, and she acknowledged she could be charged with perjury if she lies on the stand. O’Brien is also scheduled to take the stand, and also has immunity.
Prosecutors revealed in court this afternoon that accountant Cindy Laporta was testifying as part of an immunity agreement.
Laporta explained: “Because I prepared tax returns and communicated with banks based on information (received from) Manafort and (his former deputy Rick) Gates.”
The judge interrupted to prevent Laporta from giving her opinion about the veracity of the information.
During her testimony, Laporta was asked by prosecutors about two loans Manafort said he had received from two foreign entities that were described as clients of his consulting business.
One of the loans was for $900,000 and the second was for $1.5 million.
Laporta said she did not see all the supporting documents and saw only one page or “two at most.”
The prosecutor asked if Laporta was concerned about the representations she had received about the loan. She said she was.
Laporta was also asked if she believed the representations. “No,” Laporta said.
Accountant Cindy Laporta, who inherited Paul Manafort’s account in 2014 from accountant Philip Ayliff, is testifying right now.
So far, her testimony has closely mirrored the testimony of Ayliff’s.
But one difference: She has immunity from prosecution, while Ayliff does not.
Prosecutors asked her how many of Manafort’s 15 shell companies she recognized. She said there was only one — Peranova Holdings — which she believed was a customer of Manafort’s company DMP International.
Ayliff (and before him, the bookkeeper Heather Washkuhn) also ran through similar long lists, denying they knew of the entities, which prosecutors say belonged to Manafort.
Laporta told the jury how extensively her firm reminded its clients that they needed to disclose their foreign bank accounts.
The firm, KWC, had a policy “to always ask every year the question,” she told the jury. “The penalties were huge for noncompliance.”
She said she never learned that Manafort had accounts, accountants or tax returns to file in Cyprus — indicating that Manafort had lied to his US financial professionals, according to prosecutors.
Though Laporta’s testimony has tracked with Ayliff’s so far, she tried to give fuller answers from the witness box. (Ayliff was prone to given short, often one-word answers.) Occasionally she has paused to review a piece of evidence before looking out over the courtroom to answer a question.
Accountant Cindy Laporta, the first witness granted immunity from prosecution so she would be forced to testify in the Paul Manafort trial, has taken the stand.
Laporta inherited Manafort’s account in 2014 from accountant Philip Ayliff, whom she worked with at the tax firm Kositzka, Wicks and Company.
She is one of five witnesses with immunity on the prosecutors’ roster for the trial. Without immunity, the individuals would be able to refrain from answering questions by asserting their Fifth Amendment protection from self-incrimination.
Before Ayliff finished his testimony, he told the jury he knew of no foreign entities —meaning companies or accounts — that Manafort had in Cyprus.
What prosecutors are trying to prove: They are trying to show that Manafort hid many foreign accounts from his personal financial service providers and from the US government, and used them to pay for expensive personal items.
Court is now back after the lunch break. After Manafort’s attorney cross-examines accountant Philip Ayliff, prosecutor Uzo Asonye has told the judge they will call Cindy La Porta, another member of the accounting firm.
La Porta is one of the witnesses who has been granted immunity to testify.
Judge T.S. Ellis said either side could raise the immunity issue before the jury.
Paul Manafort tried to assure a bank that the Trump Tower property he owned on Fifth Avenue in New York was used as a personal residence, while in fact he used it as a rental property, the accountant Philip Ayliff said in court Friday.
After Manafort suggested to Ayliff in an email that the Trump Tower property “has never been a rental property,” Ayliff spoke with a bank, UBS, that had inquired about the condo’s usage.
“I told them exactly. It was a rental,” Ayliff said in court. Manafort had always used the condo as a “self-rental,” Ayliff added, meaning that his company DMP International rented it from another company Manafort controlled, John Hannah LLC.
Manafort and his business associates stayed in the Trump Tower space when they traveled to New York City instead of paying for hotel rooms, Ayliff said.
Why this matters: Whether the property was a rental or a personal residence affected Manafort’s tax deductibles, Ayliff said. It also speaks to the general theory prosecutions have built towards: That Manafort lied to banks about how his used his real estate so that he could get more mortgage funding than the banks would normally be willing to lend.
Ayliff testified that another property, on Howard Street in New York, also was a rental listed on AirBnB, even though Manafort called it a personal residence. The Howard Street condo is named in the indictment as part of one bank fraud allegation. Prosecutors alleged in the indictment that Manafort used a sham $1.5 million loan from a Cypriot shell company he controlled, Peranova, to buy the Howard Street property.
Jurors haven’t heard that part of the story yet. So far, they’ve learned that the Peronova loan eventually became income that Manafort claimed. Ayliff testified that he saw no evidence ever that Manafort paid off interest or principal on the purported Peronova “loan.”
Court broke at about 12:20 p.m. ET for lunch and will reconvene at 1:30 p.m.
Philip Ayliff, the accountant, is still on the stand, but prosecution has finished its first round of questioning him. The defense team plans to cross-examine him after lunch for about 45 minutes.
The defense team wanted to question Ayliff in front of the jury about how he would have retained his client’s records if an IRS audit arose.
Judge T.S. Ellis said defense lawyer Kevin Downing could ask two questions:
Downing said they hoped to point out that Manafort had revealed the foreign account names to his tax preparers.
The prosecutors have tried to keep out of court the suggestion that the government did not audit Manafort and thus had no reason to bring a criminal case against him.
Paul Manafort’s tax preparer Philip Ayliff was asked about several companies identified on a client list provided by Manafort. Ayliff identified nine of them, including Lucicle Consultants Ltd and Global Highway Ltd, as clients.
What prosecutors have alleged: Prosecutors say in the indictment that some of the same companies were actually controlled by Manafort and were used to pay vendors for home renovation, expensive suits and luxury cars.
Ayliff said he had no knowledge that Manafort or Gates had any financial interest in those companies. He added that he had no understanding of the relationship with the companies beyond them being identified by Manafort and Gates as clients.
Prosecutor Uzo Asonye asked why Ayliff would want to know if there was any financial interest by Manafort. Ayliff said if there was a financial interest then Manafort would have had to identify them as foreign bank accounts.
Ayliff was also asked if he would want to know if any income from foreign accounts was used to pay US vendors. Ayliff said yes, he would want to make sure the income was reported correctly.
Asonye later showed email exchanges where Ayliff was following up with Gates on questions about Manafort’s tax returns. In one email, Ayliff asked Gates about the source of funding for the Union St. property, to which Gates responded: “This came from a savings account of Kathy’s, according to PJM.”
Philip Ayliff, a tax preparer for Paul Manafort, confirmed to the jury that his tax preparation firm received several emails from Manafort and his right hand man Rick Gates assuring the accountants that they had no foreign accounts.
Ayliff’s firm asked Manafort directly in an email in 2011 if he, or his wife, or two daughters had foreign accounts.
Manafort said no, according to an email shown to the jury.
Again in 2012, Gates told the accounting firm “we do not need to file for Paul” documents that showed his interest in Cypriot accounts to the US government.
In 2013, the accountants asked about Manafort’s foreign accounts a third time.
The accountants reminded Gates in an email that Manafort would need to disclose to the US Treasury Department any foreign accounts he controlled.
“As discussed, to my knowledge, nothing has changed,” Gates wrote back.
Important note: It is a crime not to disclose to the US government any transactions with or money kept in a foreign country.
Manafort has pleaded not guilty to four charges of this crime. The foreign bank account reporting charges are one of three types of criminal charges Manafort faces. The prosecution has previously presented some evidence that speak to his alleged bank fraud and tax crimes.
Prosecutors have even implied that Manafort and Gates used a separate set of accountant in Cyprus and filed tax returns in the country unbeknownst to their US-based financial specialists.
Manafort or Gates “never told you they filed tax returns in Cyprus” or had accountants on the Mediterranean Island, prosecutor Uzo Asonye asked Ayliff in court.
“No,” Ayliff responded.
Philip Ayliff, a tax preparer for Paul Manafort, told the jury Friday morning that in 2012, Manafort was improperly paying himself a salary through the consulting company he and his wife owned.
Manafort reported on his 2012 tax return a total income of $5.36 million. At the time, he and his wife each owned 50 percent of the Ukraine-focused political consulting firm DMP International.
He also reported earning wages of $1.99 million — the same amount his bookkeeper testified to yesterday.
Partners with ownership of businesses like DMP International shouldn’t pay out wages, Ayliff testified.
That year was the same time DMP International received a $1.5 million loan from his alleged shell company Peronova Holdings Limited, which was forgiven and counted as income years later.
It was the first year DMP International existed, after a previous consulting firm that Manafort solely owned was liquidated.
Special counsel Robert Mueller’s team has fully transitioned from displaying Paul Manafort’s luxurious tastes to explaining to jurors how they say the former Trump campaign chairman lied on his taxes and falsified his bookkeeping to obtain banking loans.
The discussion of Manafort’s taxes and finances cuts to the heart of the prosecution’s case against Manafort, who is charged with 18 counts of tax and banking crimes. He has pleaded not guilty to all charges.
The wider context: The case is the first that Mueller’s team has taken to trial as part of its broad investigation of Russian election interference in 2016, and the trial is occurring while the special counsel negotiates with President Donald Trump’s legal team about Trump being interviewed.
Who’s on the stand today: Manafort’s former accountant Philip Ayliff is back on the stand on Friday morning, continuing his testimony that began Thursday afternoon. Ayliff’s colleagues are expected to follow him into the witness stand when his testimony concludes.
Ayliff, who prepared Manafort’s taxes, testified Thursday that Manafort never said he had foreign bank accounts, a question that’s asked on IRS tax forms. It’s a crime to hide foreign bank accounts from the US government.
The star witness: Once the prosecution finishes with the accountants, the most high-profile witness is expected to take the stand: Manafort’s former deputy Rick Gates.
His testimony could come as early as Friday, although the timing is still up in the air.
Gates has pleaded guilty after being charged by Mueller’s team last year, and the Manafort’s legal team has signaled it plans to make Gates a key portion of its defense, seeking to blame Gates for Manafort’s alleged crimes.
Prosecutors at Paul Manafort’s criminal trial are again asking Judge T.S. Ellis to allow them to use more visual aids in the courtroom, according to a court filing Friday morning.
Throughout the week, Ellis has stood in prosecutors’ way when they’ve wanted to show photographs of Manafort’s expensive clothing and other personal purchases and charts summarizing financial findings to the jury.
This time, they’re asking the judge to allow them to use two dozen visual aids –charts prepared by the FBI that summarize hundreds of wire transfers Manafort allegedly made and other financial totals.
“The jury is more likely to understand the evidence through summary charts, and presenting the evidence through charts rather than through the voluminous underlying documents will save time,” prosecutors wrote in request to the judge on Friday morning.
Ellis will likely address the request without the jury present during proceedings on Friday.
Ellis has repeatedly instructed the prosecutors not to spend much time showing images on the video screens in the court room, as he’s been intent on having the trial “move along.”
The jurors will be allowed to peruse some of the images outside the courtroom before they decide the case.
Here’s everything you need to know about what happened in the third day of Paul Manafort’s trial:
An accountant with Kositzka, Wicks & Company, which handled Paul Manafort’s individual and business taxes, testified Thursday that Manafort never told them that he had foreign bank accounts.
This question is asked on IRS tax forms, and it’s a crime to hide foreign bank accounts from the US government.
Manafort is charged with failing to report foreign accounts on his tax forms. He has pleaded not guilty to these charges.
After more than three hours on the stand, Paul Manafort’s bookkeeper Heather Washkuhn is done.
Next up: Philip Ayliff, an accountant with Kositzka, Wicks & Company, which handled Manafort’s individual and business taxes.
Ayliff is the first of at least two other tax-preparation witnesses scheduled to testify against Manafort. His current colleague Cindy LaPorta and former colleague Conor O’Brien have received immunity from the judge so that they cannot assert their Fifth Amendment rights when testifying and cannot be prosecuted based on what they say at the trial.
Prosecutor Uzo Asonye said Ayliff would be a “substantial witness” and may be on the stand for several hours.
Paul Manafort’s bookkeeper Heather Washkuhn testified Thursday that Manafort and his longtime deputy Rick Gates sent several fake, inflated income business statements to banks, when their political consulting company was actually losing money.
She said the statements were sent to Banc of California, the Federal Savings Bank and Citizens Bank in 2016 and early 2017.
One side-by-side of documents showed Washkuhn’s company telling Federal Savings Bank that Manafort’s company DMP International had lost $1.11 million in the first 11 months of 2016.
Manafort then sent the same person at the bank, Dennis Raico, a financial statement for the first nine months of the year that said his company made $3 million. On the version Manafort sent to Raico, the word “review” was misspelled as “REVmw” and the month of September was missing its “R.”
Federal Savings Bank ultimately loaned to DMP, when its executive Stephen Calk sought a Trump campaign position. Raico is on the witness list for Manafort’s trial and has been granted immunity from prosecution if he testifies, though he has not appeared yet.
Manafort is accused of bank fraud and has said he’s not guilty.
At one point, Washkuhn sent a statement to DMP that showed the firm made about $400.744. But the income statement that Banc of California received said DMP made almost $4.5 million.
A third side-by-side of the fake and the real accounting statements showed DMP claiming to Citizens Bank they had made $1.7 million, while their bookkeepers said they lost $638,000.
After the income from foreign lobbying in Ukraine dried up, Paul Manafort found himself in serious financial trouble. By early 2016, Manafort was falling behind on bills and maxing out a bank credit line, his longtime bookkeeper told jurors on Thursday.
Prosecutor Greg Andres highlighted Manafort’s dire financial straits as they turned to the bank fraud portion of their case.
Their argument in a nutshell: Manafort illegally lied to banks to get loans when he was desperate for cash.
The bookkeeper, Heather Washkuhn, described how Manafort’s international lobbying company hemorrhaged money in the years after his patrons in Ukraine were driven from power, losing more than $630,000 in 2015 and $1.1 million in 2016.
Without a steady income, Manafort fell behind on his bills, including payments to the bookkeeping company. At one point, Manafort was even at risk of losing his health insurance because he couldn’t make the payments, Washkuhn testified.
Manafort’s longtime deputy Rick Gates asked Washkuhn in January 2016 if he could draw funds from one of Manafort’s credit lines at the Swiss bank UBS. In court Thursday, Washkuhn read from her reply to Gates, where she said the account was “fully drawn.”
Another email from Washkuhn to Manafort said $120,000 was “urgently needed for your personal bills.” Another series of emails warned him of an upcoming deadline to pay property taxes on one of his homes in New York before penalties kicked in.
The bookkeeper’s testimony described Manafort’s financial troubles in January 2016. That’s one month before he reached out to candidate Donald Trump, offering to run his campaign without getting paid, according to The New York Times. Trump hired Manafort in March 2016 and stayed until August 2016. It’s unclear why Manafort offered to work for free at a time when he needed money.
An important note: The jury hasn’t heard anything about Manafort’s role on the Trump campaign, and his outreach to Trump is not part of the evidence in this case. Manafort’s alleged crimes are unrelated to the campaign. Prosecutors previously told the judge that they will only bring up the Trump campaign to talk about an alleged quid pro quo between Manafort and a banker who wanted a campaign job.
Paul Manafort’s bookkeeper Heather Washkuhn walked through years of ledgers that showed payments in and out of his consulting company, revealing several income payments from shell companies were apparently disguised as loans, and vice versa.
Shell companies that prosecutors allege Manafort used to hide his money offshore loaned his consulting firm DMP International more than $3.5 million from 2014 until 2016.
On at least one occasion, DMP started calling that money income — though Washkuhn’s bookkeeping company never saw documentation that the loan was forgiven.
Income from shell companies:
She said they “would have recorded it a bit different here,” if she had known Manafort himself or Rick Gates controlled that company.
Prosecutors have implied during Washkuhn’s testimony that Manafort was using his DMP business account to pay for personal expenses. That practice, Washkuhn said, should have been kept separate.
Prosecutors also showed that after reporting net profits for consecutive years, DMP International began to lose money in 2016.
Paul Manafort’s longtime bookkeeper Heather Washkuhn said Manafort paid himself a salary of $1.99 million in 2012, according to her testimony about his on-the-books finances from his political consulting firm.
Washkuhn also said Manafort paid his longtime deputy Rick Gates a salary of $240,000 in 2012. Gates made the same salary in 2013 and 2014.
Konstantin Kilimnik, another Manafort associate in Russia, received tens of thousands of dollars from Manafort’s consulting company DMP International in 2013 for professional services and in a “private transfer” of cash, Washkuhn said. She said she didn’t know who Kilimnik was.
Kilimnik is accused by the Special Counsel’s Office of trying to influence trial witnesses.
Paul Manafort was a big spender when it came to computers and entertainment — spending millions on audio-video home installations, and $10,000 on a karaoke system for his Hamptons mansion.
Prosecutors read details about wire transfers that Manafort sent to pay for the karaoke system in 2010 during the parade of testimony from vendors who sold high-end goods and services to Manafort. The vendors said they were all paid via international wire transfers coming from offshore shell company accounts.
Joel Maxwell of Big Picture Solutions also took the stand, and told the jury that Manafort installed Apple TVs, networks and other electronics in his Hamptons home from 2011 to 2014. The cost was $2.2 million.
Echoing several other vendors who’ve testified, Maxwell said Manafort paid with wire transfer using offshore corporate bank accounts under names like Leviathan Advisors Limited and Lucicle Consultants Limited.
Prosecutors also read to the jury descriptions of Manafort’s personal purchases that both Manafort’s defense team and the investigators agreed were true.
Paul Manafort’s business and personal estate bookkeeper Heather Washkuhn denied ever knowing about the companies Manafort used to wire money for his extravagant personal purchases.
Prosecutor Greg Andres asked Washkuhn if she had ever heard of 14 different shell-company bank accounts.
She said “no” to every one.
Washkuhn said she handled all of Manafort’s personal and professional financial dealings from 2011 to 2018, and said she never recorded the existence of any foreign bank accounts for Manafort while she kept his books.
She also said it was important for her to keep track of all of his bank accounts and bills so she could help him properly pay his taxes each year.
Why this matters: Prosecutors are using Washkuhn’s testimony to underline Manafort’s alleged criminal use of unreported foreign bank accounts. They say she will also be able to speak to Manafort’s criminal bank fraud charges.
Washkuhn also said she hadn’t known if Manafort had accounts in Cyprus, St. Vincent, Grenadines and Ukraine — Many of the personal items Manafort bought were paid for through international wire transfers from banks in Cyprus, according to previous witnesses’ testimonies.
In addition, Washkuhn said she had no knowledge of at least one loan Manafort’s political consulting company made to one of the shell companies for $275,000.
The court is on a lunch break until 1:30 p.m. Prosecutors and the defense team will continue their questioning of Washkuhn after lunch.
Here’s a closer look at Paul Manafort’s pond, described by one witness as “one of the biggest ponds in the Hamptons,” and waterfall, which is at his home in Bridgehampton.
Michael Regolizio of New Leaf Maintenance said Manafort paid for much of the work he did at the property through international wire transfer, and was his only client to do so.
The Department of Justice released these photos (they’re in black and white).
Next to take the the stand is Paul Manafort’s bookkeeper, Heather Washkuhn.
Prosecutors say her testimony will delve into the tax and bank fraud portion of the case. Manafort has pleaded not guilty, but is accused of lying to the IRS to hide his income, and lying to banks to secure millions of dollars in loans.
Washkuhn is the 12th witness and her testimony should last 2-3 hours, according to prosecutors.
Prosecutors revealed yet another document that showed a bill from New Leaf Maintenance, a landscaping company used by Paul Manafort, which had listed an incorrect vendor name and address.
Defense attorney Jay Nanavati asked Regolizio if he would call the document a “fake invoice.” Regolizio replied yes.
Regolizio of New Leaf Maintenance also said he never met, communicated with or received payments from Rick Gates — Manafort’s longtime deputy on whom defense attorneys have indicated they’d like to pin the alleged crimes.
Immediately after they showed the jury the fake invoice, prosecutors asked Regolizio if he had ever met or corresponded with Konstantin Kilimnik, a Russian who has been indicted in DC in a separate case for helping Manafort attempt to tamper with witnesses. Regolizio said he did not know Kilimnik.
Prosecutors have not yet revealed what they believe the fake invoices prove in their case.
Vendors who sold custom men’s clothing, audio-visual services, landscaping, home renovations and cars have told the jury in Northern Virginia that Paul Manafort was a major customer and frequently paid with the unusual method of wiring money from corporate-named bank accounts in Cyprus.
The vendors largely say they do not recognize the company names Manafort used, yet they knew the payments came from him because their amounts matched the bills they sent him.
A landscaper in the Hamptons described how Paul Manafort — and Manafort alone — commissioned him to care for hundreds of flowers at his house, as well as “one of the biggest ponds in the Hamptons.”
Michael Regolizio of New Leaf Maintenance said Manafort paid for much of the work through international wire transfer, and was his only client to do so.
Regolizio testified that Manafort spent about $450,000 on landscaping over five years.
The landscapers initially only handled tree-care for Manafort’s Bridgehampton estate. But in 2012, they took over Manafort’s entire Bridgehampton home’s outdoor work.
This included:
Regolizio said Manafort would personally call his landscape company’s offices before one of the wire transfers came through, to give them a heads up.
They knew the wired money coming from corporate payers came from Manafort because the only other other client Regolizio had who paid in that way made transfers from domestic banks and used his own name, the landscaper said.
Regolizio started working for Manafort after the construction contractor Stephen Jacobson connected them. Jacobson testified on Wednesday about millions of dollars of home renovations he did for the Manaforts, and how those were paid for by wire transfer.
The case is unfolding in Virginia, but in some ways, it’s all about Cyprus.
Most witnesses have been asked about Cyprus in one way or another: Several of the vendors that Paul Manafort did business with were asked repeatedly which country Manafort’s payments came from.
The answer, often enough, was “Cyprus.”
Witnesses were also asked to read the address of the banks, most of which were located in Nicosia, the Mediterranean nation’s capital.
In their indictment, prosecutors said Manafort owned or controlled more than a dozen entities in Cyprus, which he used to funnel money around the world. They also said in court filings that they obtained records from the government of Cyprus to help their case.
Jurors were presented with what appeared to be a falsified invoice from one of the home improvement companies that did business with Paul Manafort.
Joel Maxwell, chief operative officer of Big Picture Solutions, testified that Manafort paid his company more than $2.2 million over several years for various home technology improvements, including installation of wireless networks and audio/visual systems.
Most of the payments came from Manafort’s offshore accounts, Maxwell said.
After prosecutors detailed the invoices, they showed Maxwell another document that purported to be an $163,000 invoice from his company to one of Manafort’s overseas companies.
But there were problems with the document: For one, the document misidentified the name of the company as an LLC, and parts of the address were incorrect. “We’re not an LLC,” Maxwell said, and the documents are “not detailed like ours would be.”
The mystery document originated from St. Vincent and the Grenadines, a Caribbean island chain where Manafort kept some of his offshore accounts. Prosecutors haven’t yet explained why they spent two days presenting these documents and highlighting apparent inconsistencies.
But they could have been used by Manafort to hide or falsify financial documents.
There was a brief moment of levity in the courtroom when Judge T.S. Ellis noticed that his binder, containing exhibits and documents, was swapped with one of the prosecutors’ binders.
In response, prosecutor Greg Andres joked that Ellis now had a sneak peek at their strategy.
“It was pretty clear,” Ellis replied. ” I didn’t need to have it.”
The binders were quickly switched back.
Manafort’s lawyers got a chance to look at the page that Ellis saw from Andres’ binder, which had some red markings and handwritten notes on the page.
Day 3 of Paul Manafort’s trial is poised to feature more talk of his lavish lifestyle, while Special counsel Robert Mueller’s team also plans to dive into the nuts and bolts of its case against the former Trump campaign chairman.
Manafort is charged with 18 counts of tax and banking violations, and the special counsel is preparing to call Manafort’s bookkeepers and accounts to the witness stand on Thursday. And while Manafort’s case isn’t about the 2016 campaign, he’s the first defendant Mueller’s team has taken to trial.
In case you missed it:
Prosecutors plan to call Paul Manafort’s former deputy Rick Gates to testify, prosecutor Greg Andres said Thursday morning in court without the jury in the room.
This comes a day after prosecutors opened the door to the possibility that Gates might not testify.
Why this matters: Gates is perceived by the defense and court-watchers as the star witness for the prosecution, after he agreed to cooperate in February.
Andres added that prosecutors could prove Manafort’s guilt whether or not Gates testifies.
Gates is expected to take the stand as early as Friday or Monday.
Judge T.S. Ellis used a discussion of whether Manafort’s team could discuss the lack of an IRS audit before Paul Manafort was charged with a crime to bring up the elephant in the room at any criminal trial – whether Manafort himself will testify.
Ellis said Thursday morning he did not yet know if Manafort would testify in his own defense, and didn’t want to force a decision from the defense team until they begin their side of the case, after the prosecution’s case rests, likely next week.
“He will not be penalized for the right to remain silent,” Ellis said.
However, Ellis added that if Manafort does testify, the judge may allow testimony about whether Manafort tried to comply with IRS policy and offered to be audited before he was charged.
The Justice Department released photos as part of the evidence entered at Paul Manafort’s trial on Wednesday.
Manafort spent over $900,000 with the custom men’s clothing store Alan Couture, one witness who ran the store told prosecutors. In total, the six vendors on the witness stand Wednesday described more than $6 million in payments Manafort sent to them for luxury items and services.
Manafort appears to have purchased not just an $15,000 ostrich jacket, but also a $9,500 ostrich vest. And the cost of that Python jacket? $18,500, according to invoices from Alan Couture entered into the case’s evidence collection.
Here’s one of them:
We don’t know which of the Manafort jacket photos released by DOJ is the $15,000 jacket “made from an ostrich,” as the prosecution team says the reference in the opening statement came from the invoices, not the evidence photographed in Manafort’s home.
All we know is that the ostrich jacket is one of the Alan Couture clothing items.
The purchases appear to have hit a note with the wider public. After prosecutors first spoke about a $15,000 jacket “made from an ostrich” in the trial’s first minutes, the anti-animal cruelty group PETA published a letter Wednesday to Manafort’s lawyer.
The group asked Manafort to donate the ostrich jacket to them so they can teach children it was “cruelly obtained.” Manafort could receive a tax deduction, PETA added.
Take a look at some photos of Manafort’s various jackets and suits below.
Mueller team’s is now formally arguing to Judge T.S. Ellis that they should be able to show proof to the jury of Manafort’s lavish lifestyle, including photos of his high-end custom jacket, his real estate expenditures, and other extravagant purchases.
Ellis has so far stopped the prosecutors from showing photos of Manafort’s luxury purchases to the jury. The defense has wanted them kept out of the trial too. Ellis has reminded the lawyers and Northern Virginia jurors multiple times that it’s not a crime for a person to be rich.
But Mueller’s team says evidence of what Manafort spent his Ukrainian lobbying proceeds on IS evidence of the crime itself, and shows how he personally benefited from allegedly defrauding the government.
“That Manafort had an expensive lifestyle that required lots of money to maintain is important proof as to why he would commit the bank frauds” after his lobbying work declined in 2014, prosecutors wrote.
Prosecutors in the trial of former Trump campaign chairman Paul Manafort argued overnight Thursday that the defense’s assertion that Manafort was never audited by the Internal Revenue Service shouldn’t factor into the jury’s determination of whether he committed a crime.
Generally, both prosecutors and defense during a trial can attempt to curtail the opposite sides’ arguments by asking the judge to decide whether he will allow certain types of evidence to be presented to the jury.
In his opening statement Tuesday, defense lawyer Tom Zehnle told the jury they should expect to hear how Manafort never faced a federal inquiry about his taxes, making it suspicious that prosecutors brought this case.
Special counsel Robert Mueller’s team, however, said in a court filing after midnight Thursday morning that the point about whether Manafort shouldn’t matter. An IRS audit is a civil procedure and not part of the criminal inquiry, prosecutors say.
Manafort is currently fighting in court charges of 18 financial crimes, including submitting false income tax returns to the IRS.
Manafort’s “argument that a civil audit should have been conducted and the fact that one was not creates a substantial risk of misleading the jury, prejudicing the government, and inviting jury nullification,” prosecutor Van Grack wrote, referring to the outcome in which jurors believe a defendant committed crimes but vote not to convict because they believe the person was not fairly prosecuted.
In his opening statement to the jury, Zehnle criticized what he said was the government’s “rush to judgment” in the case.
“You’re going to learn that Mr. Manafort was never audited by the IRS, nor were any of his companies. So as you consider this, as you hear all the evidence come in, the documents and the testimony, you might ask yourself whether the government knew enough to initiate the audit. Did they have enough evidence?” Zehnle said.
It’s likely on Thursday that Judge T.S. Ellis will address this issue during the trial proceedings without the jury in the room.
Ellis has already decided one other argument from Manafort’s team out of trial. The defense lawyers are not allowed to suggest to the jury that an earlier federal investigation that started before the special counsel’s office formed ended with a decision not to prosecute Manafort.
The second day of testimony in the Paul Manafort trial has just wrapped up. Here’s everything you need to know:
Paul Manafort used offshore accounts to finance a grandiose home renovation that included an outdoor kitchen and garden, according to testimony from a contractor who worked with Manafort years ago.
Virginia-based builder Douglas Deluca told the jury that the project included an exterior garden design, outdoor kitchen and outside seating. The “outdoor garden concept,” as Deluca put it, also featured soapstone counter-tops, antique brick and a pergola, a large wooden structure that provides shade to those underneath.
In an email, Manafort told him: “On matters of contract and budget, you will deal with me.”
By having DeLuca read the email aloud, prosecutors highlighted that Manafort was directly involved with the payments for the project.
Manafort’s defense team has blamed Manafort’s longtime deputy Rick Gates for the alleged financial wrongdoing. But DeLuca and some other witnesses on Wednesday said they never met Gates or heard of him. One of the witnesses who sold luxury suits said Gates would sometimes facilitate Manafort’s payments.
Wayne Holland, longtime friend and neighbor of Paul Manafort, was briefly questioned by prosecutors and the defense team about a real estate deal he helped the Manaforts with.
Manafort himself handled much of the payment and orchestrated the transaction, Holland told the jury. Holland also said the Manaforts offered the full listing price for the house when they bought it.
Holland is a neighbor across the street from Paul and Kathleen Manafort, who both watched him closely as he testified. Holland has known the couple for almost 30 years, after he noticed a bolt of lightning hit their house.
Holland said they were “very close friends.”
When asked by defense attorney Jay Nunavati if Manafort and his wife Kathleen were the “nicest neighbors you ever had,” Holland replied yes.
The word “Trump” landed in the courtroom for the first time during Paul Manafort’s trial Wednesday.
Steve Jacobson, owner of Hamptons construction company, told the jury he worked on renovations at Manafort’s Trump Tower apartment. Prosecutors did not dwell on renovations at that home.
Jacobson worked on personal projects for Manafort in the Hamptons and New York City.
Stephen Jacobson, a longtime construction contractor who worked on personal projects for Paul Manafort in the Hamptons and New York City, testified Wednesday that Manafort had paid him millions of dollars worth of home renovations, mostly through international wire transfers.
One incoming wire transfer in 2010 paid for home improvements worth $124,000 and came from a shell company that Manafort allegedly used called Global Highway Limited. “This matches up with the invoice I sent to him,” Jacobson testified.
When Jacobson and Manafort met
Paul Manafort first met Jacobson around 2001, when his wife, Kathleen, asked him to repair a backsplash above their kitchen countertop. He also described how he years later ripped out a back wall of the Manafort’s house to expand their dining room, and ripped out everything from cabinets and countertops to lighting in the family’s kitchen in their Bridgehampton mansion. Jacobson also constructed a pool house for the Manaforts.
In 2010, 2011 and 2012, the contractor billed Manafort more than $500,000 each year. In 2013, Manafort’s invoice for home improvements was $1.13 million, Jacobson said.
“He always paid his bills. I never think I get paid fast enough,” he said, when asked if Manafort paid on time.
What prosecutors are trying to show: They are trying demonstrate how Manafort used money he earned in Ukraine for his personal benefit, and hid it from federal authorities and others in shell companies.
Paul Manafort’s cars make for the next topic of discussion, as prosecutors brought in a financial officer from a Mercedes-Benz dealership in Virginia.
Daniel Opsut testified that Manafort’s family bought and leased expensive cars from the luxury dealership and paid using Manafort’s offshore accounts in Cyprus.
Paying from offshore accounts is “not common, but it’s not unheard of,” Opsut said.
Kathleen Manafort was in the courtroom while Opsut testified about her cars.
Prosecutors have a photograph of Manafort’s car in their exhibit list, but they did not attempt to present the image to the jury on Wednesday. Both sides have wrangled over which photos can be shown to the jury — an early, recurring theme in this case.
The next witness for the prosecution, real estate agent Wayne Holland, took the stand shortly before 3:30 p.m. ET.
Prosecutor Uzo Asonye told Judge T.S. Ellis this afternoon that the prosecution believes it’s paced ahead of schedule.
Asonye said they plan to rest their case against Paul Manafort next week but did not indicate which day they expect to be done.
The new expectation makes sense, given that Ellis has tried to move the evidence presentation along during the trial. Occasionally, he would tell the prosecutors they didn’t need to show the jury evidence they had planned on. Ellis also repeatedly told the lawyers to “hurry up” or “move along” to the next question with witnesses.
The proceedings on Tuesday — the first day of the trial — flew by with jury selection, opening statements and the first witness’ testimony.
Previously, prosecutors have said they’d like to call anywhere from 20 to 35 witnesses to testify against Paul Manafort. In recent weeks, prosecutors told the judge they needed three weeks to present their case, but their side’s presentation clearly won’t stretch that long.
It’s not clear yet how much time Manafort’s defense team will need to present his case, nor is it known whether Manafort will testify on his own behalf.
Six witnesses have given testimony so far as of Wednesday afternoon.
Jurors heard testimony from Ronald Wall, a financial executive at a high-end fashion store in Beverly Hills.
Wall described Manafort as “a very good customer” at the world-famous store, known as the House of Bijan.
Much of Wall’s testimony centered on payments the company received from Manafort’s offshore accounts. Special counsel Robert Mueller’s team has accused Manafort of hiding millions of dollars in Cyprus and other countries to avoid paying US taxes.
Under questioning by Manafort’s attorney, Wall testified that some of Bijan’s other clients “occasionally” paid with wire transfers.
The witness seemed uninterested in the proceedings, sometimes giving extremely brief answers. He acknowledged that he was testifying Wednesday as a result of a federal subpoena, and that Mueller subpoenaed financial documents from his company.
Judge T.S. Ellis once more criticized the prosecution’s strategy, saying, “I understand this effort to show that he lived lavishly, but at some point it’s not relevant.” Mueller prosecutor Greg Andres said he was trying to highlight Manafort’s income, not his lifestyle.
Maximilliam Katzman told the jury Wednesday that Paul Manafort was the only client of high-end men’s boutique Alan Couture to pay with international wire transfers.
Katzman confirmed documents that show incoming international wire transfers from Manafort’s companies for thousands of dollars worth of clothing. The clothing was custom made for Manafort.
In one email, Manafort wrote to the clothing boutique, “You will be receiving an email for the amount due from Leviathan,” his foreign shell company.
During his testimony, Katzman, who was manager at his father’s store Alan Couture, described several invoices for Manafort:
After he said Manafort was an important client, Judge T.S. Ellis asked Katzman if all of Alan Couture’s clients were important. “I don’t want to answer that,” Katzman said, to much laughter in the courtroom.
He finished testifying around 2:15 p.m. ET.
Ronald Wall, the longtime chief financial officer of another exclusive men’s clothing boutique, House of Bijan, is now on the stand.
Judge T.S. Ellis said the jury may bring in a birthday cake on Friday to celebrate a birthday.
It was a brief moment of levity from the judge who has attempted to hurry the presentation of evidence along and treated the prosecutors sternly during their questioning of witnesses.
The 16 jurors met each other yesterday, and have appeared to follow the evidence presented and Ellis’ interjections closely during the first five rounds of witness testimony.
The Paul Manafort trial has reconvened this afternoon with testimony about Manafort’s vast spending on luxury suits.
Jurors heard testimony from Maximillian Katzman, 29, who works at his father’s high-end men’s fashion store in New York.
He testified that the store, Alan Couture, has only about 40 regular clients and Manafort was one of their top five buyers. Manafort primarily bought suits, sportscoats and outerwear, Katzman said.
Katzman’s brown hair was slicked back and he wore a crisp navy suit, pocket square and striped tie.
Prosecutors have made a point to highlight Manafort’s wealthy lifestyle, which they say was funded through illicit means. This strategy earned an early rebuke from the judge, who told them yesterday that it wasn’t a crime to be rich.
The Manafort trial has taken a midday break. Court will be back in session at 1:30 p.m. ET.
What to expect after the break: Prosecutors said three or more witnesses will be called this afternoon.
Those witnesses are …
Prosecutors opened the door to the possibility that Rick Gates may not testify at Paul Manafort’s trial, prosecutors said on Wednesday, after two days of the defense team attacking the supposed “star witness.”
“He may testify in this case, he may not,” prosecutor Uzo Asonye said in court with the jury present Wednesday.
Asonye added his team is always reevaluating whether to call a witness or not, depending on how the case is going and timing. He then quickly backtracked on his statement – adding that he didn’t mean to suggest Gates wouldn’t testify.
Gates is on the witness list and played a central role in both sides’ summaries of their cases, which they presented Tuesday afternoon. Prosecutors have said they have a broad swath of people planned on their witness list, not just Gates.
Judge T.S. Ellis has tried to hurry prosecutors along all day as prosecutors used an FBI agent to walk the jury through documents found in Manafort’s home. Ellis has repeatedly reminded the prosecution they should bring witnesses to testify who have first-hand knowledge of Manafort’s spending.
Ellis said, “If you’re to call Mr. Gates, this is a waste of time,” referring to FBI agent Matthew Mikuska’s testimony about a memo titled “Gates agenda” that appeared to be a strategy memo from 2013.
And then this happened: During the back-and-forth about whether Gates will testify, Ellis noted the flurry of journalists who left the courtroom, saying that they “scurried out of here like rats out of a sinking ship.”
If photos of Paul Manafort’s lavish spending habits are the emotional center of prosecutors’ case, the jury isn’t yet seeing it.
The jury has not yet seen today photos of the luxury clothing, watch and other items that Manafort allegedly bought with hidden Ukrainian consulting money because Ellis keeps stopping prosecutors from putting the photos they have on screens in the courtroom.
Day two of Manafort’s criminal trial so far has been a dance between prosecutors and the defense team and judge over what evidence they may use to prove Manafort spent his allegedly untaxed income on personal purchases. Ellis in particular has asserted his control over the prosecutors’ case. (The judge previously expressed his distaste for the Special Counsel Office’s approach to the case at a court hearing before the jury trial convened.)
So what has the jury seen? Ellis has let the prosecutors show written documents like ledgers, receipts, invoices to the jury with Manafort’s name on them.
Trump posed a question to his Twitter followers on Wednesday: Who was treated worse, “legendary mob boss, killer and ‘Public Enemy Number One’” Al Capone or “political operative” Paul Manafort?
The President made a similar comparison in his July 17 interview with Fox News’ Sean Hannity.
The tweet was one of multiple this morning from Trump’s account referencing collusion.
Matthew Mikuska, an FBI agent who searched Manafort’s Alexandria, Virginia, apartment for business documents and other evidence last July, told the jury that Manafort’s name was on several documents showing millions of dollars in loan agreements and wire transfer invoices.
Why this matters: This is the first moment in the trial when prosecutors have gotten to the meat of their argument — that Manafort knowingly signed several kinds of false financial documents.
Mikuska, questioned by prosecutor Greg Andres, has shown the jury several of the documents found in the search of Manafort’s apartment. Here’s what some of them are:
A central focus of Mueller’s investigation is whether Trump has obstructed justice in the Russia investigation, and Wednesday’s tweet could be scrutinized by the special counsel’s team.
What Trump tweeted:
Citing three people briefed on the matter, The New York Times reported last month that Mueller is reviewing Trump’s tweets as well as “negative statements” made by the President related to the attorney general and former FBI director James Comey, whom Trump abruptly fired last year.
California Rep. Adam Schiff, the top Democrat on the House Intelligence Committee, raised the question on Twitter Wednesday shortly after Trump’s remark.
Schiff wrote:
An FBI agent who raided Paul Manafort’s home last year testified that the FBI knocked three times before entering his condo in Washington’s Northern Virginia suburbs.
FBI agent Matthew Mikuska said that he and other agents gathered outside Manafort’s door, then knocked on three separate occasions and announced that the FBI was there to execute a search warrant.
When nobody answered the door, the agents used a key that they already had and entered the condo, Mikuska said. When they walked in, they saw Manafort standing nearby.
The raid occurred shortly after 6 a.m., Mikuska said.
Some news reports shortly after the July 2017 search suggested that it was a “no-knock raid.” Mikuska’s testimony on Wednesday disputed these reports.
Prosecutors already said in earlier court filings that the raid was not a “no-knock raid.”
Watch how CNN reported on the raid at the time:
Political TV ad consultant Daniel Rabin’s testimony concluded 30 minutes after it began with a hard pivot by the defense team toward Rick Gates.
What this means: The testimony is yet another sign that the defense plans to blame Manafort’s alleged criminal financial enterprise on his former deputy.
After prosecutor Greg Andres asked Rabin about the extent of his work in Ukraine with Manafort for former President Viktor Yanukovych, Westling asked Rabin whom he sent invoices for his Ukrainian TV ad work to at Paul Manafort’s company.
Rabin said they first went to an assistant at the company, then to Gates. “Sounds like he handled a lot of logistics and business issues,” Westling said.
“That’s correct,” Rabin responded.
Rabin also testified that Manafort himself paid him by bank wires and other forms of payment for his work, and at one point Manafort asked Rabin to attend a speech of the Ukrainian Party of Regions billionaire backer Rinat Akhmetov.
The second witness of the day, FBI agent Matthew Mikuska, is now testifying.
Around 9:50 a.m. ET, Daniel Rabin – a political TV ad consultant – was the first witness to take the stand on Day 2 of the trial.
Rabin is largely speaking about his work in Ukraine with Manafort for former Ukrainian President Viktor Yanukovych and his political party, the Party of Regions.
Rabin previously worked alongside Manafort and Tad Devine, who testified yesterday, also about Manafort’s work in Ukraine.
Before questioning began, prosecutor Greg Andres told the judge the witnesses were testifying so they could establish for the jury the extent of the work Manafort did in Ukraine, up until Yanukovych’s ouster in 2014.
Yanukovych has since fled to Russia.
Rabin, whose work like Devine’s has largely been for Democrats in the US, is more soft-spoken on the stand than yesterday’s witness, his former colleague.
Trump took to Twitter Wednesday morning where he appeared to downplay his connections to Manafort – saying the former Trump campaign chairman worked for him “for a very short time.”
“Why didn’t government tell me that he was under investigation,” he tweeted, noting that the charges Manafort faces “have nothing to do with collusion.”
He continued his tweet-spree in another post, writing that questions surrounding Russian collusion with his presidential campaign are a “total hoax.”
Before the jury entered the room on Wednesday, the federal judge overseeing Paul Manafort’s trial urged both sides to avoid using the term “oligarch” when describing Manafort’s powerful patrons in Ukraine.
Judge T.S. Ellis told special counsel Robert Mueller’s prosecutors not to give jurors the implication that oligarchs were criminals. In making his point, Ellis, who is known as a sometimes colorful judge, even invoked two prominent US political donors.
“Mr. Soros would then be an oligarch … so would Mr. Koch … but we wouldn’t use that term,” Ellis said, referring to Democratic megadonor George Soros and one of the billionaire Koch brothers, whose influential network supports Republican candidates.
Former Trump campaign chairman Paul Manafort’s trial kicked off yesterday. He has pleaded not guilty to federal charges of bank fraud and tax crimes.
The jury will gather again at 9:30 a.m. ET today for day two of the trial. While we wait, catch up on what happened during day one:
The first day of Paul Manafort’s trial has just wrapped up.
It ended with testimony from Tad Devine, who was questioned by prosecutors and Manafort’s defense attorneys.
Devine, the Democratic political consultant who worked with Manafort in Ukraine, testified extensively on how much work Manafort did in Ukraine alongside Rick Gates and his associate Konstantin Kilimnik. He spoke about an effort for Manafort to work with other Ukrainian politicians, as recently as 2014.
“Paul worked harder than anybody,” Devine testified. “There were emails through the night going on.”
Prosecutors working for special counsel Robert Mueller questioned Devine for about an hour.
Manafort’s lawyers quizzed Devine about the role of Gates, whose upcoming testimony against Manafort is expected to play a key role in the prosecutors’ case. Devine said Gates “did a lot of the day-to-day stuff,” like arranging travel, while Manafort led the campaign strategy in Ukraine.
The jury will gather again at 9:30 a.m. ET Wednesday.
Prosecutor Uzo Asonye started the first words of the trial with this line:
Asonye, who faced jurors, then went on to describe how Paul Manafort made $60 million in Ukraine and he didn’t report it to the federal government. He described how Manafort used his own 30 bank accounts in three foreign countries to create sham loans and collect untaxed income he spent on luxury goods, like a $15,000 custom ostrich jacket, a $21,000 watch and cars.
In one piece of evidence that prosecutors will show in court, Manafort refers to a secret foreign bank account as “my account,” Asonye said. Manafort and his business associates also lied on several forms sent to his tax preparers, banks and the IRS by signing documents that said the foreign accounts did not exist, he said.
“As the old adage goes, just follow the money,” Asonye told the jury. “Paul Manafort orchestrated these crimes.”
Manafort sat looking at his papers on the desk in front of him as Asonye called him a liar. Manafort’s wife sat stoically, looking at the floor as the prosecutor attacked her husband.
The first witness of Paul Manafort’s trial has now taken the stand.
It is Tad Devine, the Democratic political consultant who worked with Manafort in Ukraine.
He described the organization of Manafort’s foreign political consulting operation, and how it included Manafort, Rick Gates and Konstantin Kilimnik. Prosecutors are questioning him, and the defense attorneys will have a chance to cross-examine him later.
Defense attorney Thomas Zehnle described the roles of several witnesses who will testify during the trial.
Zehnle said these people will testify about Gates and Manafort:
Prosecutor Uzo Asonye made note of witnesses in general terms, telling the jury they would hear from “a bookeeper,” associates of Manafort and others. The only witness he described by name was Rick Gates. Asonye told the jury that Manafort had orchestrated the conspiracy and hid his foreign accounts and income from the accountants and bookkeepers he worked for.
“Most witnesses don’t even know each other” and come from different walks of life, Asonye told the jury during his opening statement.
Paul Manafort’s defense attorney Thomas Zehnle told the jury his team planned to pin all the crimes the government has accused Manafort of on his longtime deputy Rick Gates.
Gates pleaded guilty to a conspiracy charge and lying to federal investigators in February. Gates was charged with several crimes in the Virginia case, but after his plea, those charges were dropped.
Manafort’s “trust in Rick Gates was misplaced,” Zehnle said. Gates changed his story over time — to the point of saying anything to the government, he said. And Gates found himself in a legal bind “because he embezzled millions of dollars from his longtime employer” — Manafort, Zehnle said.
This is the first time Manafort’s team has revealed its strategy in full. It’s a bold move, especially given that Gates could also be a key witness in other pieces of Mueller’s investigation into Russian interference in the presidential election.
The defense also plans to use witnesses prosecutors plan to call to substantiate the idea that it was Gates lying and stealing money.
Manafort removed his glasses to watch Zehnle deliver his opening defense.
In opening statements for the defense, Paul Manafort’s defense attorney Thomas Zehnle laid out the bare bones of his side of the case, shifting much of the blame to the Ukrainian oligarchs that Manafort worked for and the business associates he worked with.
“This is the way that they required it to be done,” Zehnle said, explaining why oligarchs paid Manafort through secret foreign accounts. Prosecutors said Tuesday that Manafort hid 30 foreign bank accounts from US authorities.
Of Manafort’s associates, like longtime deputy Rick Gates, Zehnle said this:
Gates pleaded guilty earlier this year to participating in Manafort’s alleged financial conspiracy and is slated to testify against Manafort. Both men were top officials in President Trump’s campaign, but that is not part of the criminal case.
Zehnle specifically attacked Gates and called him “the prosecution’s star witness.”
In opening statements Tuesday, prosecutors detailed Paul Manafort’s “extravagant lifestyle,” and said it was funded by “secret income” that he earned from his lobbying in Ukraine.
To demonstrate Manafort’s lavish spending habits, Uzo Asonye, a prosecutor working on the case with special counsel Robert Mueller’s team, pointed to specific details:
Manafort is accused of filing false tax returns, failing to report foreign bank accounts, and defrauding several banks. If Manafort is convicted, these serious financial crimes could carry a total sentence of 300 years in prison. He has pleaded not guilty.
In opening statements Tuesday, prosecutors painted former Trump campaign chairman Paul Manafort as a “shrewd” liar who orchestrated a global scheme to avoid paying taxes on millions of dollars.
Manafort lived an “extravagant lifestyle” fueled by millions of dollars in “secret income” that he earned from his lobbying in Ukraine, said Uzo Asonye, a prosecutor working on the case with special counsel Robert Mueller’s team.
A federal judge in Alexandria, Virginia, granted a request for five witnesses to testify with immunity during Manafort’s trial.
The five witnesses granted immunity are:
Court filings do not provide details as to what each will be testifying about.
Watch more:
Paul Manafort served as President Trump’s campaign chairman between June and August 2016, resigning amid questions over his lobbying overseas.
He has a long career in politics: In the 1980s, he founded a lobbying firm with Roger Stone, another Trump adviser under investigation.
Manafort is charged with bank fraud and tax crimes. Prosecutors claim he hid millions of dollars in income from lobbying for Ukrainian politicians, all while failing to pay taxes and spending the money on US real estate and personal luxury purchases.
He has pleaded not guilty.
He’s also scheduled to face trial in Washington, DC, on related charges in September.
Watch more:
A jury of six men and six women has been sworn in for the criminal trial of Paul Manafort in Alexandria, Virginia.
Also selected were four alternate jurors of three women and one man.
It took seven rounds of the selection process for attorneys on both sides to reach 12 jurors.
Though the initial jury pool of 65 people from Northern Virginia was largely white, the group that will decide Manafort’s guilt was quite diverse, with at least three of the jurors not being white and two not white alternates as well. They range in age.
The court will take a lunch break for almost an hour, and opening statements are expected to begin this afternoon.
