Prosecution rests in Manafort fraud trial

Former Trump campaign manager Paul Manafort  (REUTERS/Jonathan Ernst)

U.S. prosecutors on Monday rested their case against former Trump campaign chairman Paul Manafort after 10 days of testimony alleging how he evaded taxes and defrauded banks, with the defense set to decide on Tuesday if it will call any witnesses.

As its final witness on Monday, the prosecution recalled a Treasury Department agent who testified that Manafort’s consulting companies did not disclose their foreign bank accounts, as is required by law, in addition to him failing to do so personally.

“The government rests,” U.S. prosecutor Greg Andres said after the agent completed her testimony.

Judge T.S. Ellis said he would talk to Manafort on Tuesday about whether he wanted to take the stand, something that legal experts say is highly unlikely.

Manafort’s lawyers will also tell the court on Tuesday whether they plan to call any witnesses.

If the defense rests, closing statements would be next, after which the 12-person jury will begin deliberations.

Manafort is being tried on 18 counts, which include tax and bank fraud charges, as well the failure to disclose foreign bank accounts. If found guilty on all charges, he could face eight to 10 years in prison, according to sentencing expert Justin Paperny.

The trial is the first courtroom test for U.S. Special Counsel Robert Mueller, who indicted Manafort in October 2017 as part of his probe into Russian meddling in the 2016 U.S. election.

Manafort’s lawyers on Monday asked for the charges to be thrown out, claiming that the prosecution failed to show the necessary willfulness to break the law.

Dan Goldman, a former federal prosecutor who attended the proceedings, called the action by Manafort’s lawyers “pro-forma”, adding, “very rarely are they successful.”

During the trial, more than two dozen witnesses took the stand and portrayed Manafort, 69, as a lavish spender with little regard for the law. As a political consultant for pro-Kremlin politicians in the Ukraine, Manafort earned some $60 million between 2010 and 2014.

Stashing the money in 31 offshore bank accounts, he skirted taxes by wiring it directly to vendors to snap up real estate and luxury goods, the witnesses said.

The trappings of Manafort’s lifestyle dominated media headlines throughout the trial: there was half a million dollars worth of antique rugs, $750,000 spent on landscaping for his $13 million Bridgehampton mansion, and more than $1 million for clothing, including a $15,000 jacket made of ostrich skin.

SEALED MOTION

Ellis closed the courtroom at the end of the day to hear arguments on a sealed motion that was filed earlier in the day.

While the contents of the motion are unknown, the development comes after an unexplained delay in the trial and unusually detailed instructions by Ellis to the jurors on Friday, in which he pressed them not to talk to anyone about the case.

The judge’s comments sparked speculation by legal experts and courtroom observers that the delay could be related to some form of juror misconduct. Ellis resumed testimony mid-afternoon on Friday with no changes to the jury.

“The fact that the judge resumed proceedings but gave a strong admonishment to the jury tells me that a juror issue arose but that level of misconduct was not significant enough to warrant a mistrial,” said jury consultant Alexandra Rudolph.

The prosecution also called James Brennan to the stand on Monday. Brenann is an executive at Federal Savings Bank, which extended $16 million in loans to Manafort on his Hamptons estate and a Brooklyn brownstone house in late 2016 and early 2017.

Brennan said bank president Javier Ubarri made an initial decision to reject a $9.5 million loan on Manafort’s Hamptons estate, but bank chief executive Steve Calk overruled it. “It closed because Mr. Calk wanted it to close,” Brennan said about the loan.

On Friday, another Federal employee testified that Calk personally approved loans to Manafort while seeking Manafort’s help getting a job in President Donald Trump’s campaign and his cabinet.

Federal Savings Bank has not returned calls seeking comment, and has said it will make no comment during Manafort’s trial.

Brennan, asked about whether the bank made money from lending to Manafort, said the bank has written off the loans and “took a hit” of $11.8 million.
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Prosecution set to wrap up case against Manafort

Former Trump campaign manager Paul Manafort at U.S. District Court in Washington. (REUTERS/Jonathan Ernst)

U.S. prosecutors on Monday plan to wrap up their tax and bank fraud case against former Trump campaign chair Paul Manafort, making it likely the case will go to the jury by midweek if the defense decides not to call any witnesses.

The trial is in its 10th day in federal court in Alexandria, Virginia, and is scheduled to resume Monday afternoon. The case arose from U.S. Special Counsel Robert Mueller’s investigation of Russian meddling in the 2016 presidential election.

Before completing their case, prosecutors will call James Brennan, an executive at the Federal Savings Bank. On Friday, a former salesman at Federal testified the bank’s chief executive, Steve Calk, personally approved $16 million in loans to Manafort while seeking Manafort’s help getting a job in President Donald Trump’s campaign and ultimately his cabinet.

In a brief on Monday, prosecutors said they expected another Federal official to testify that he relied on an altered profit and loss statement for Manafort’s consulting company, DMP International LLC, and a falsified letter about a debt to the New York Yankees for season tickets in reviewing the loans.

While they did not name the official, Brennan is the only Federal executive left on the witness list.

The prosecution also wants to recall Paula Liss, an agent with the Treasury Department’s Financial Crimes Enforcement Network. The defense is seeking to block further questioning of her and the judge has not yet ruled. Liss testified last week that Manafort did not disclose his foreign bank accounts.

Manafort’s lawyers then will face a choice: call their own witnesses or hope the prosecution’s case is not strong enough to outweigh defense attacks on the credibility of former Manafort associate Rick Gates and the testimony of more than two dozen other witnesses.

Gates testified last week that Manafort directed him to help commit the tax and bank frauds while the defense portrayed him as living a “secret life” of infidelity and embezzlement.

Prosecutors contend Manafort hid a significant portion of the approximately $60 million he earned as a consultant for pro-Russian politicians in Ukraine, then lied to borrow millions more in a bid to maintain an extravagant lifestyle when the Ukraine work dried up.

Shanlon Wu, who represented Gates before he pleaded guilty in February and started cooperating with Mueller’s investigation, said he expected the defense to rest its case and move on to closing arguments.

While the prosecution has built a solid case, Manafort’s lawyers appeared to have raised some doubts about the testimony of Gates and other witnesses, Wu said.

“The big question is, did the government do enough to show willfulness,” said Wu, who is no longer involved in the case and said he was speaking from knowledge of the publicly available evidence.

If the defense decides not to call any witnesses, the court may on Monday hold a conference with the lawyers to decide what instructions should be given to the jury before they begin deliberations, Judge T.S. Ellis said on Friday.

Closing arguments may take place on Tuesday. Ellis ordered each side to limit its summation to two hours.

It was unclear if Ellis will make public the reason behind an unexpected recess on Friday that lasted into the mid-afternoon and included a lengthy discussion with the lawyers and judge at the bench, the contents of which remain under seal.

Some legal experts have speculated that it may have been triggered by a problem with the jury after Ellis reminded jurors in unusual detail and multiple times about the defendant’s presumed innocence, the need to “keep an open mind” about the trial and not to talk to anyone about the case.

“My sense is that it probably has to do with juror misconduct,” said Joshua Dressler, a law professor at Ohio State. But it was not likely severe enough to prompt the judge to declare a mistrial, he said, noting Ellis resumed witness testimony on Friday afternoon.

A motion and related memorandum were filed under seal on Monday morning. No details were immediately available.
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