Paul Manafort indictment shows he made 'thousands of dollars a week' using Airbnb to rent out a $3 million New York City condo he bought with offshore funds

Paul ManafortDrew Angerer/GettyPaul Manafort.
  • Paul Manafort, President Donald Trump’s former campaign chairman, and Manafort’s associate Rick Gates have been indicted on charges including money laundering and tax fraud.
  • Manafort is charged with laundering over $US18 million, which the indictment says he obtained illegally from the Ukrainian government and its political leaders from 2006 to 2015.
  • The indictment says Manafort used $US6.4 million to purchase three residential properties in the US, including a New York City condo he rented out on Airbnb.

Paul Manafort, President Donald Trump’s former campaign chairman, was indicted by a grand jury on Monday morning along with his business associate Rick Gates on a range of charges, including laundering over $US21 million.

The hidden millions were used “to enjoy a lavish lifestyle in the United States, without paying taxes on that income,” the indictment says.

But Manafort, who the indictment says transferred funds from offshore accounts to pay for over $US12 million in “personal items” ranging from home renovations to four Range Rovers, didn’t just spend lavishly — he also made money as an Airbnb landlord, the indictment says.

The indictment shows that in addition to the $US12 million Manafort spent on personal items, he used $US6.4 million from offshore accounts in 2012 to purchase three residential properties in the US: a condominium on Howard Street and a brownstone on Union Street, both in New York City, and a house in Arlington, Virginia.

Manafort used the shell company “MC Soho Holdings, LLC” to purchase the Howard Street condo, in Manhattan’s trendy SoHo neighbourhood, for $US2.85 million in 2012, the indictment says.

“Shell companies are perfect for owning assets or opening bank accounts without leaving a trace of whose money it actually is,” Business Insider previously reported. The indictment says Manafort illegally used several shell companies to funnel money into offshore accounts so it wouldn’t be taxed as income.

From “at least January 2015 through 2016,” he used the Howard Street property to generate income by renting it out on Airbnb and other home-rental sites, earning “thousands of dollars a week,” the indictment says.

He also claimed rental-property deductions on his tax returns during that time, the indictment says. Typical deductions for rental-property owners include property tax, operating expenses, depreciation, and repairs. Mortgage interest on a rental property is also deductible, but the indictment shows Manafort bought the property in an all-cash transaction.

Then, sometime between late 2015 and early 2016, Manafort sought a mortgage on the property “to have the benefits of liquid income without paying taxes on it,” the indictment says. In other words, Manafort is accused of using the property as collateral to withdraw millions of dollars in cash in the form of a bank loan.

To secure a bigger loan at a lower interest rate for the condo, the indictment says, Manafort had to portray the property, which he was renting out for income at the time, as owner-occupied. The interest rate to pay back the loan is typically lower for owner-occupied properties than rental properties.

The indictment says that on January 26, 2016, before a bank appraiser’s visit to the condo, Manafort wrote in an email to his son-in-law: “Remember, he believes that you and [Manafort’s daughter] are living there.”

In addition, the indictment says Gates created a document that falsely stated the condo was the couple’s second home.

In March 2016, the bank loaned Manafort $US3.19 million.

Manafort “borrowed millions of dollars in loans using these properties as collateral, thereby obtaining cash in the United States without reporting and paying taxes on that income,” the indictment says.

If you think you may have rented Manafort’s Howard Street loft on Airbnb, please contact [email protected] to share your story.

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