Paul Manafort trial Day 12: Prosecutors say Manafort money trail ‘littered with lies’

Paul Manafort, President Trump’s onetime campaign chairman, is on trial in federal court in Alexandria on bank and tax fraud charges. Prosecutors allege he failed to pay taxes on millions he made from his work for a Russia-friendly Ukrainian political party, then lied to get loans when the cash stopped coming in.

The case is being prosecuted by the special counsel investigating Russian interference in the 2016 U.S. presidential election.


12:22 p.m.: Manafort got $16 million loan with help from banker who wanted Trump administration job, prosecutor argues

Prosecutor Greg Andres finished his closing argument by explaining to jurors how Paul Manafort had defrauded Federal Savings Bank to acquire $16 million in loans, largely thanks to the “guiding hand” of the bank’s chief executive officer, Steve Calk, who wanted a Trump administration post.

As he did with the previous loans, Andres showed jurors a numbered list of the lies he said Manafort told to secure the loans. In essence, Andres argued, Manafort submitted two doctored profit-and-loss statements to inflate his business’s income, lied about having loaned his credit card to Rick Gates so Gates could buy Yankees season tickets and lied about another mortgage.


Former Trump campaign chairman Paul Manafort is shown on the opening day of his trial on bank and tax fraud charges stemming from Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 U.S. presidential election (Bill Hennessy/Reuters)

Andres showed jurors emails demonstrating Manafort’s direct involvement in one of the doctored statements – important because it serves to undercut defense attorneys’ argument that Gates is to blame for all the fraud.

Andres asserted that were it not for Federal Savings Bank’s Calk, Manafort might not have gotten the loans. Andres showed jurors an email of various posts in the Trump administration Calk suggested he was open to filling.

Prosecutors wanted to demonstrate Calk’s involvement, Andres argued, to “show why the loan went through, notwithstanding all the red flags.”

At about 11:40 a.m., Judge T.S. Ellis III interrupted Andres, asking if he wanted to reserve any time for a “rebuttal” argument. That is essentially another closing argument that Andres can give to respond to the defense’s closing argument. Andres said he was close to wrapping up and sped through the remaining slides in his presentation.

“The evidence in this case is overwhelming,” Andres concluded. “It’s a case about how when Mr. Manafort didn’t have money, he lied to get more from bank, after bank, after bank.”

Ellis told jurors he would recess the trial until 1:30 p.m. so they could eat lunch. At that time, the defense will present its closing argument – first from Richard Westling, then from Kevin Downing. That should take about two hours or less. Ellis said Andres had saved 17 minutes for rebuttal, but the judge added that he would not be “draconian” about the time limit.

After the closing arguments are concluded, Ellis will read instructions to jurors. The case should be in their hands for deliberations by late Wednesday afternoon.


11:56 a.m.: Prosecutor delves into bank fraud allegations

After his defense of Rick Gates’ testimony, prosecutor Greg Andres moved into the details of Paul Manafort’s alleged bank fraud.

“Time and time again, Mr. Manafort provided false information” to banks, Andres said, adding that “any number of bank documents that Mr. Manafort signed” explicitly say that doing so is a crime.

The fraud was necessary, Andres explained, because Manafort’s Ukrainian patron Viktor Yanukovych “was out of power,” and “Mr. Manafort couldn’t pay his bills.”

Andres started with the $3.4 million loan from Citizens Bank for a SoHo condo, saying Manafort lied by claiming it was his second home.

“Mr. Manafort never used this apartment as a second home, never ever,” he said. “Mr. Manafort knew the apartment was listed on Airbnb.”

He pointed to one email in which Manafort tells his daughter and son-in-law to “remember” that an appraiser “believes you are living” in the condo.

“What he does is nothing short of absurd and shows the lie,” Andres told the jury. “If you’re living in an apartment, do you need to be reminded of that fact? It’s absurd.”

He then walked through a $1.5 million “loan” from Peranova Holdings that came up repeatedly at trial and was an issue the bank raised.

“Not to be confusing, but it was never a loan, it was always income,” Andres said. “Mr. Manafort treated it as a loan so he could avoid paying taxes on that money.” When he needed to show more income from a loan — “poof, a loan becomes income and is forgiven,” Andres said.

Andres said Manafort lied to Citizens Bank in a third way, claiming there was no mortgage on the townhouse Manafort had in Brooklyn.

The mortgage, “it’s like a hot potato — it’s on, it’s off, it’s on, it’s off,” Andres joked.

Andres quickly moved to a $1 million loan Manafort got from Banc of California, saying Manafort similarly failed to disclose his other debts and also lied about his income. In a subsequent effort to get another loan from Citizens Bank, he said Manafort lied about his income again.

Andres tried to undercut the expected argument that Manafort associate Rick Gates was the one orchestrating these loan applications. He pointed to a March 16, 2016 email in which Manafort told Gates, “You are the quarterback.”

Manafort sent some fraudulent documents himself, Andres told the jury, and when he didn’t he was copied on the emails.

“Mr. Manafort is reviewing these documents,” Andres said. “He’s aware of what’s happening.”


11:40 a.m.: Defense attempts to shift blame to Rick Gates are wrong, prosecutor argues

Prosecutor Greg Andres preempted defense attempts to lay blame for the fraudulent financial papers and hidden accounts at the feet of Manafort’s business partner Rick Gates by asking the jury to recall the witnesses and documents presented to them at trial.

Ten witnesses —  including an FBI agent, an IRS employee, and Manafort’s bookkeepers — testified before Gates took the stand and all their testimony showed Manafort was not ignorant of his financial activity. Manafort was willful in his actions, Andres said. He knew the law and still chose to violate it.

Andres painted Manafort as a “successful, international political business consultant,” a trained lawyer and a savvy businessman who spoke the language of tax law and finances regularly with his bookkeepers and accountants. Andres showed the jury emails in which Manafort is alerted to tax law requiring him to report foreign money. Andres also presented the jury tax documents in which he was specifically asked to report overseas money. Despite all these instructions and warnings, Andres said, Manafort still obscured $60 million in 31 overseas accounts.

“That evidence alone is more than sufficient to convict Mr. Manafort,” Andres said.

To address any credibility issues the defense might raise with Gates, Andres asked the jury to look at the testimony critically. Prosecutors weren’t asking the jury to trust every word Gates said or even like him. Instead, Andres asked the jury to test Gates’s testimony against the documents presented and other witnesses who testified and verify the wrongdoing the government alleges.

“Ladies and gentlemen, the star witness in this case is the documents,” Andres said.

Andres also asked the jury to question why the defense leaned hard on Gates’s extramarital affairs.

“Was it to distract you?” Andres asked. “Does it matter?”

Any affair Gates had 10 years ago doesn’t make Manafort any less guilty, Andres said.

Manafort was a mentor to Gates, and if anything, Manafort “didn’t choose a Boy Scout” as a business partner but sought someone with whom he could commit fraud and other crimes.

When addressing the money Gates admitted to embezzling, the defense in its opening statement claimed that Gates “had his hand in the cookie jar.” But it wasn’t a cookie jar, Andres told the jury. It was a “huge dumpster” of hidden money.


11:10 a.m.: Manafort had millions in 31 foreign accounts, reported none of them, prosecutor says

Early in his closing argument, prosecutor Greg Andres sought to highlight for jurors a simple fact: Paul Manafort reported on his tax returns that he did not have foreign bank accounts, when in fact he did.

Displaying charts to jurors that demonstrated his point, Andres asserted that not only did Manafort have such accounts, but he kept millions of dollars in them, much of which he funneled to the U.S. to buy luxury clothes, cars and property.

In 2010, Andres told jurors, Manafort had more than $5 million in foreign bank accounts, and used more than $1.5 million to buy things in the United States. In 2011, Andres said Manafort had more than $8 million in foreign accounts, and used more than $1.4 million to buy things in the United States.

In 2012, Andres said, Manafort hit a high mark: He had more than $25 million in foreign bank accounts and used more than $9 million to pay vendors and buy properties at home. In 2013, Andres said, Manafort had more than $18 million in foreign accounts, and used more than $2.8 million to buy things. In 2014, the prosecutor said, Manafort had more than $2.7 million in foreign accounts, and used more than $400,000 to buy things.

That evidence is important, Andres said, because every year from 2010 to 2014, Manafort claimed on his taxes he had no foreign bank accounts. He also failed to file forms that are required for people who have foreign accounts with more than $10,000 in them, Andres said. Both are crimes with which Manafort is charged.

As Andres spoke, jurors looked up at him, occasionally scribbling notes in the black notebooks they have used throughout the trial. Andres spoke slowly and dispassionately – often referring to particular exhibit numbers that he said jurors should consult when they retire to discuss the case. For his part, Manafort, dressed in a blue suit and blue shirt, sat staring forward or looking down, never turning his head toward Andres or the jury.

To emphasize the scope of what he says was Manafort’s tax fraud, Andres posted a chart showing how much income Manafort did not report in each of the years from 2010 to 2014. At the lowest point, in 2014, Manafort had $1.3 million in unreported income. At the highest, in 2012, he had $9.2 million in unreported income. The chart was prepared by one of the prosecutors’ witnesses.

Andres told jurors that Manafort controlled 31 foreign bank accounts, some of which had his name attached. He took aim at the defense notion that Manafort’s business partner Rick Gates was secretly moving money through the accounts – showing jurors emails in which Manafort directed funds to be moved, and referring to the accounts using the possessive pronoun “my.”

Andres then appealed to jurors’ common sense. Was it possible, he asked facetiously, that Gates or some unknown person had forged Manafort’s signature on the accounts, put $60 million in them over time, and then allowed Paul Manafort to use them to buy $15 million in clothes and cars?

“Does that make any sense at all?” Andres asked the jury. “We should all be so lucky.”

A few jurors chuckled in response.


10:46 a.m.: Prosecutor asks jury to take careful notes

The strength of the special counsel’s case against Paul Manafort is the overwhelming documentary evidence — bank records, tax returns, emails, invoices, profit and loss statements. But the volume of evidence has also been a challenge as prosecutors tried to make the case comprehensible to the jury. In closing arguments, prosecutor Greg Andres at times sounded like a college professor, urging jurors to write down numbers and read the exhibits.

“Write down the exhibit numbers so you can review them in the jury room during deliberations,” he said near the outset of his argument, which he promised would be less than two hours long.

Some of the documents, he explained, had not yet been shown in court: “I’m going to do my best to refer to the exhibit numbers,” he said, because “some of the exhibits you’re going to be seeing for the first time.”

He walked through just a few examples of money, traced by an FBI forensic accountant from Ukrainian politicians to Manafort and then to vendors in the United States.

Then Andres tried to boil it down a bit.

“Mr. Manafort’s scheme, when you break it down, was not that complicated,” he said. “But it was hidden, to be sure.”

Manafort did not report any of these financial movements to his bookkeeper or accountant, Andres pointed out.

“Why would he lie?” he asked. “The answer is simple: He wanted to hide that money and evade taxes.”

Jurors appeared to take Andres’s words to heart, diligently taking notes as he spoke.

The courtroom was packed with spectators. As closings began dozens more tried to find seats only to be turned away.


10:40 a.m.: Prosecutor addresses some criticism from judge

Throughout the trial, Judge T.S.  Ellis III derided prosecutors for focusing on Paul Manafort’s extravagant spending on suits and home improvements. In closing arguments prosecutor Greg Andres got a chance to explain the government’s case.

In essence, he said he agreed with the judge: “This case is not about Mr. Manafort’s wealth. It’s not a crime in this country to be wealthy.”

He said if Manafort had used unreported income to buy “widgets,” they would have shown evidence of the widgets. They showed evidence of “cars, clothes and homes” because that’s what Manafort bought.

“We’re in this courtroom because Mr. Manafort filed false tax returns and failed to file FBARs,” or foreign bank account reports.

Andres also addressed the defense Manafort’s attorneys raised in opening statements, that the failure to acknowledge his 31 overseas accounts on his taxes amounted to overlooking a box on a form.

Andres pulled up one tax return and showed that Manafort explicitly checked “No,” when asked if he controlled foreign financial accounts whose aggregate value exceeded $10,000.

The defense “suggested he simply forgot to check a box. That’s not true,” Andres said. “Mr. Manafort affirmatively answered ‘No’ … it wasn’t a clerical error.”


10:34 a.m.: Prosecution’s closing argument begins: Manafort’s trail of money “is littered with lies”

Special Counsel’s Office Prosecutor Greg Andres, in a dark blue suit, white shirt and black tie, took a sip of water and began his closing argument at about 10 a.m. Speaking slowly – at times reading and at times looking up at jurors from a lectern that was turned to face them – Andres told the panel that the case boiled down to Paul Manafort’s lies.

“Mr. Manafort lied to keep more money when he had it, and he lied to get more money when he didn’t,” Andres said.

He added: “When you follow the trail of Mr. Manafort’s money, it is littered with lies.”

In his first shots at the defendant, Andres repeated, “Mr. Manafort is not above the law.”

Andres began his closing argument by breaking up the charges into two parts: the period between 2010 and 2014 when Manafort is accused of not paying taxes and of filing false returns to keep the money he had; and the period between 2015 to 2017 when he wasn’t making money and allegedly began defrauding banks.

Andres said Manafort hid money in overseas bank accounts in Cyprus and other locations, and failed to alert the government to the accounts in Foreign Bank and Financial Accounts Report filings.

“In total, Mr. Manafort failed to pay taxes on more than $15 million,” Andres said, adding that the money was used to pay various vendors.

When the money stream began drying up for Manafort, he portrayed loans as income to secure more loans, Andres said.

“A loan is not income, and income is not a loan,” Andres said.

Andres told the jury Manafort applied for five loans at three banks, securing about $20 million by filing false statements. Andres said Manafort lied about his profits and losses, about where he lived, about the debt on his American Express card and sent false documents.

“He lied and lied again,” Andres said.

Andres referenced an email Manafort sent to his Cypriot lawyer asking money be wired from one account to pay Steve’s Painting and Construction. The email is evidence of Manafort’s unreported income hidden with foreign banks, Andres said.

The money would be taken from “…my Yiakora Ventures account,” Manafort wrote in the email. Andres emphasized the word “my” to illustrate that Manafort was the one who controlled the financials and could be used to block a defense allegation that Gates or others had control.


9:00 a.m.: Two hours of closing arguments expected from each side in Manafort trial

Though both sides have rested their cases, it will still be hours before the jury will start deliberating in Paul Manafort’s tax- and bank-fraud trial. Prosecutors and Manafort’s attorneys plan to give lengthy closing arguments that are expected to take up much of the day.

Prosecutors have requested two hours for their closings — an opportunity to stitch the barrage of documents and hours of often-technical witness testimony they have presented to jurors over the last two weeks into a cohesive narrative. They’ll also introduce some evidence they hadn’t presented through witnesses but are allowed to discuss during closings.

Manafort’s attorneys are expected to have the same amount of time to address the jury — the first time they’ll substantively address the panel since opening statements.

Prosecutors are typically allowed a final rebuttal argument before the judge gives instructions and finally hands the case over for jury of six men and six women to determine Manafort’s fate.


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