Judgment day draws nigh for Paul Manafort. His lawyers have rested without calling a witness and they and the government are set to make their final pitches to the jury Wednesday morning. So where is Manafort most at risk when the jury starts deliberating?
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Manafort’s danger zones: The Justice Department charged Manafort with a hefty 18 counts and the charges fall into three categories: tax evasion, failure to file mandatory foreign bank account reports, and bank fraud with a hint of conspiracy. After two and a half weeks of testimony and exhibits, the strongest evidence provided by the government is on the tax evasion charges, followed by the failure to report foreign bank accounts.
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Taxes: Counts one through five hit Manafort on failing to disclose income to the IRS on five years’ worth of individual tax returns (2010 through 2014) as well as failure to report that he had control or signature authority over foreign bank accounts. This is the strongest part of the government’s case because it was able to elicit testimony from a host of luxury vendors—a Hamptons landscaper, a contractor who did renovation work on his properties, bespoke tailors who sold him the infamous ostrich leather jacket and expensive suits, and a retailer of high-end audiovisual entertainment systems. Manafort in many cases personally informed them that he would be paying for millions of dollars in luxury goods and services from international wire transfers from foreign bank accounts.
To tie all of that evidence together, the government called an IRS agent who had combed through Manafort’s taxes to testify that a total of $16 million of his income in foreign accounts never touched his tax returns—even allowing for a host of dubious hypothetical business expense deductions like cosmetic dentistry and Italian villas.
The defense never questioned the credibility of the vendors or whether the payments were made. Rick Gates’ credibility, the lynchpin of the Manafort’s defense, isn’t a factor in the income tax evasion charges because vendors testified time and again that they dealt primarily or exclusively with Manafort and that he had told them he was paying by international wire transfer.
Foreign bank accounts: Failing to inform the government that you have a foreign bank account with more than $10,000 in it is a separate criminal offense charged in the indictment. The facts behind the charges here are less in dispute than the legal thinking behind them. A forensic accountant for the FBI testified last week and showed off a host of account opening documents from banks in Cyprus that showed Manafort’s signature and copies of his passport. Emails offered by the government also showed him instructing a law firm that managed his Cypriot shell companies to wire money from “my account.” The sums of money moved to, from, and between the accounts were often in the hundreds of thousands and sometimes millions, placing them far above the $10,000 reporting threshold.
The defense has offered a mild challenge to the facts. At one point last week, defense lawyers asked the FBI’s forensic accountant whether she knew if Gates had a copy of Manafort’s passport and whether she thought any of the account signatures looked suspiciously unlike those known to be Manafort’s, teeing up a “Gates did it” defense.
Most of their effort in rebutting these charges, as previewed on Monday in an argument before Judge Ellis, will be focused on the argument that the responsibility to disclose the accounts belonged to Manafort’s political consulting company, DMP International, and that since Manafort (at times) represented that he had only a 50 percent share in the company, the responsibility to disclose isn’t on him.
Bank fraud and conspiracy: Manafort is charged with conspiracy and bank fraud charges against a range of financial institutions, including Citizens Bank, the Banc of California, and Federal Savings Bank in Chicago. The counts are the biggest hill for the government to climb because they rely the most on testimony from Gates, particularly on the conspiracy charges. There’s no conspiracy without Gates and as the defense pointed out, prosecutors were never able to produce a smoking gun email from Manafort instructing him to forge a fake profit and loss statement for the company and fake a fake loan forgiveness document with another foreign firm.
But not all of the bank fraud charges hinge on Gates. Employees of Federal Savings Bank, where Manafort is accused of obtaining $16 million in loans while trying to get bank CEO Steve Calk a job in the Trump administration, didn’t deal with Gates at all and the government’s charges rest on Manafort’s own representations to loan officers and underwriters.
Verdicts: It’s impossible to predict how the jury will rule, but with 18 counts spread across three groups of offenses, they have plenty of options to choose from if they’re feeling something in between acquittal or conviction on all the charges. A split verdict is well within the realm of possible.
Under seal: The trial had another lengthy, unexplained discussion on Tuesday between Judge Ellis, the government, and the defense team. Judge Ellis opened the court at 8:30 a.m. to offer a quick summary judgment in a civil case and then promptly booted everyone in the courtroom out into the hall until quarter to noon. When the courtroom opened back up, prosecutors Uzo Asonye and Greg Andres appeared relaxed and happy in a huddle while the defense team appeared dour and serious.
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