The first week of Paul Manafort’s criminal trial rapidly took off, as the prosecution used some of Manafort’s closest financial associates to begin mapping out a case for the charges against him.
Manafort is the former chairman of President Donald Trump’s campaign. He is the defendant in two criminal indictments brought by the special counsel Robert Mueller, who is investigating Russia’s interference in the 2016 election and whether the Trump campaign colluded with Moscow to tilt the race in Trump’s favour.
The indictment at the center of the current trial was brought in the Eastern District of Virginia and charges Manafort with tax fraud, bank fraud, and failure to report foreign bank accounts. Manafort’s longtime deputy, Rick Gates, was initially a codefendant until he struck a plea deal with prosecutors in February and began cooperating with the government. He is the prosecution’s star witness in this case and is expected to testify against Manafort early next week.
This week, the jury heard testimony from several critical people, including Manafort’s longtime bookkeeper and accountants, all of whom testified to Manafort’s alleged financial fraud. The jury also heard from purveyors of luxury goods as prosecutors sought to highlight Manafort’s extravagant lifestyle which they say he financed with illicit funds.
Here’s everything you need to know:
Day 1: Jury selection and opening statements
The trial officially began with jury selection on Tuesday, which legal experts anticipated would take at least a day or two given the complicated optics surrounding the trial.
But the court lived up to its reputation as a “rocket docket” – the Eastern District of Virginia is known as the fastest moving federal court in the country – when 12 jurors and four alternates were selected in under eight hours.
After prosecutors working for Mueller wheeled in ten boxes of documents, assistant US attorney Uzo Asonye delivered a 26-minute opening statement that painted Manafort as a crook who lied about his income, taxes, business dealings, and several other things.
“A man in this courtroom believed the law did not apply to him,” Asonye said.
He pointed out Manafort’s extravagant spending on luxury goods and went through a list of names the government would produce as witnesses who could testify to Manafort’s alleged misdeeds.
The defence, meanwhile, pinned all of its focus on painting Gates as the true fraudster and Manafort as Gates’ fall guy.
One of Manafort’s attorneys, Thomas Zehnle, said “this case is about taxes and trust.”
He said Manafort had simply “failed to check a box” on some forms, and that he had put “his trust in the wrong person,” referring to Gates.
Zehnle’s opening statement was roughly as long as Asonye’s, but his focus didn’t waver from Gates the entire time.
Day 2: Prosecutors present evidence of Manafort’s luxurious lifestyle, but the strategy doesn’t go over well with the judge
On Wednesday, the prosecution focused squarely on Manafort’s spending on things like expensive home renovations, custom suits and jackets, luxury watches, high-end cars, and upscale residences.
“Prosecutors love to throw in all the over-the-top spending fraudsters usually go for, and Manafort is no exception,” said Jeffrey Cramer, a longtime former federal prosecutor who spent 12 years at the DOJ. “First of all, it’s relevant because you’re following the money. Second, it has a lot of jury appeal.”
But US District Judge T.S. Ellis III, who is overseeing the Manafort case, wasn’t having it.
“Enough is enough,” he said at one point, when the jury was not in the room. He made the remark when prosecutors sought to show documents about the features in one of Manafort’s pricey homes.
“We don’t convict people because they have a lot of money to throw around,” Ellis said.
The jury also heard testimony on Wednesday from Daniel Rabin, a Democratic advertising consultant who said he worked with Manafort in Ukraine to produce dozens of television ads.
After Rabin, the jury heard from FBI special agent Matthew Mikuska. Mikuska was one of the agents involved in the FBI’s search of Manafort’s home in Alexandria, Virginia and he described the unit as a “luxury” condo.
Asonye also described several financial statements the FBI seized which included information about foreign bank accounts that prosecutors allege Manafort failed to disclose. Asonye also highlighted bills for pricey home renovations for properties Manafort owned in Florida and New York.
Later, Ellis appeared to grow frustrated when Asonye asked Mikuska to describe seized documents that referred to Gates. Ellis asked why the line of questioning was necessary, given that Gates was expected to testify.
Asonye surprised observers when he replied that Gates may not testify, but he later clarified his statement and said the government was evaluating all of its witnesses.
Day 3: Manafort’s former bookkeeper testifies that Manafort doctored financial documents to inflate his firm’s income
Much of Thursday was spent hearing testimony from one key person: Heather Washkuhn, Manafort’s longtime bookkeeper.
Washkuhn described Manafort as “very knowledgeable” and “very detail oriented,” adding that “he approved every penny of everything we paid.” She described Gates as Manafort’s “right-hand man.”
Washkhuhn testified that though she was the main person handling Manafort’s finances, she did not know that he controlled more than a dozen offshore accounts. She also said she came across several loans on Manafort’s ledgers in which she was “unaware” of the underlying loan documentation.
Notably, she also testified that Manafort and Gates appeared to falsify financial statements for Manafort’s consulting firm and inflate the firm’s income to secure bank loans.
During the cross-examination, Manafort’s lawyer, Thomas Zehnle, tried to depict Gates as having been a key figure in any illicit financial activity and Manafort as the fall guy.
Though Washkuhn acknowledged that Gates was important in directing foreign wire transfers to Manafort’s company DMP, she maintained that Manafort “approved every expenditure on the personal and business side.”
Day 4: Manafort’s former accountant admits to helping him and Gates commit financial fraud
On Friday, Cindy Laporta, a longtime accountant for Paul Manafort, admitted to helping Manafort and his deputy, Rick Gates, falsify financial documents in an effort to commit tax fraud.
In one notable exchange, Asonye asked Laporta to describe a conference call in September 2015.
During the conference call, Laporta said Gates asked Manafort’s tax preparers to alter the amount of a loan so that Manafort would owe less in income taxes.
Specifically, Laporta testified that Gates said Manafort’s tax bill was “too high” and that Manafort “didn’t have the money” to pay it.
“He was trying to reduce income and therefore, income taxes,” Laporta said, adding that she believed such conduct was “inappropriate.”
But Conor O’Brien, then an employee at the firm KWC, suggested in an email the prosecution displayed that “the loan amount may need to be changed.”
Laporta testified that they all ultimately decided to decrease the loan amount by $US900,000 on Manafort’s 2014 tax returns before submitting his 2015 one.
Laporta, who was granted immunity, testified that she changed the loan amount but “very much” regretted her actions. She said the altered loan meant Manafort owed $US400,000 to $US500,000 less in taxes in 2015.
The day after the tax return was filed, Gates emailed Laporta a Word document version of a loan agreement dated March 16, 2014 between Davis Manafort Partners International and a company called Telmar Limited. The prosecution alleges that Telmar is a company located in Cyprus that Manafort controls.
Laporta testified that the 2014 loan agreement “didn’t exist before the conversation” she had with Gates in 2015.
The document had Manafort’s signature.
Laporta also testified to several other instances of tax and bank fraud involving Manafort and Gates, several of which she was complicit in, at least in part.
The defence will embark on what will likely be a lengthy cross-examination of Laporta on Monday.
The next witness the government is expected to call after Laporta is Gates, and his testimony is expected to take several days.
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