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  1. #1

    The Manafort/Stone/Epstein/Flynn Trials & Scandals

    Manafort Trial Opening Statements via Washington Post

    3:08 p.m.: ‘He got whatever he wanted’: Opening statements in Manafort trial begin

    Assistant U.S. Attorney Uzo Asonye began opening statements around 3 p.m. by highlighting what he described as Paul Manafort’s extravagance and indifference to the law.

    “A man in this courtroom believed the law did not apply to him,” Asonye said. “Not tax law, not banking law.”

    Without using Manafort’s name, Asonye said the former Trump campaign chairman “collected over 60 million dollars” and used “shell companies and foreign bank accounts, concealing it from U.S. authorities and bankrolling his extravagant lifestyle.” He listed Manafort’s properties, which he said included “a 2-million dollar house just a stone’s throw away from this courtroom in Northern Virginia.”

    “He got whatever he wanted,” Asonye added.

    3:22 p.m.: Judge admonishes prosecutor to stick to evidence in opening statement

    Twice as Assistant U.S. Attorney Uzo Asonye got going, he was admonished by Judge T.S. Ellis III not to argue in his opening statement, but instead to explain to the jury only what the evidence will show.

    At one point, as Asonye rattled off Manafort’s expensive spending habits, Ellis jumped in to chide, “It isn’t a crime to be profligate in your spending.” He asked the prosecutor to stick to evidence of criminal wrongdoing.

    But Asonye quickly got his feet under him and began to lay out for the jury what he said the evidence will show in Paul Manafort’s case.

    The evidence, Asonye said, will show that Manafort earned millions and millions but failed to use that money to do “what Americans do every year — pay the taxes he owed.” He said Manafort lied to the Internal Revenue Service about what he owed, then lied about whether he had foreign bank accounts and finally lied to banks to get loans when his consulting income in Ukraine dried up, starting in 2015. Asonye said all the charges in the case boil down to “one simple issue: Paul Manafort lied.”

    3:33 p.m.: A $15,000 jacket ‘made from an ostrich’

    Assistant U.S. Attorney Uzo Asonye offered some new numbers and details on Paul Manafort’s income and spending, saying the $60 million he made in Ukraine was only between 2010 and 2014. He had thirty bank accounts in three foreign countries, Asonye said, paid by Ukrainian oligarchs who would create shell companies.

    Manafort signed papers and wrote emails making clear he controlled those accounts, Asonye said, and used them on spending that was “purely personal.” He said Manafort paid his tax accountants $10,000 a year while misreporting his income.

    “All of this was willful,” Asonye said. “Paul Manafort knew about the law.”

    But the most peculiar new detail he offered was on Manafort’s spending, explaining how the lobbyist spent so much on menswear. He had a $15,000 jacket, Asonye said, “made from an ostrich.”

    Note: It may have been peculiar but it's all people are talking about on Twitter.

    3:45 p.m.: ‘He created cash out of thin air’: What prosecutors say Manafort did when his Ukrainian benefactor fell from power

    Assistant U.S. Attorney Uzo Asonye said Paul Manafort not only misled his tax preparer, but a bookkeeper too. Manafort hid millions of dollars in bills and transactions from the bookkeeper to keep his financial dealings under wraps, Asonye said. He said some of Manafort’s wealth remains hidden and untaxed to this day.

    Manafort also created sham loans to himself from offshore accounts, Asonye said. The loans totaled millions of dollars and many came from accounts in Cyprus. Asonye said Manafort never made a single loan payment on these loans. All told, between 2010 and 2014, Manafort failed to report $15 million in income to the IRS, Asonye said.

    In 2014, Asonye said, Manafort’s “cash spigot” was turned off when Ukrainian political candidate Viktor Yanukovych, who had been paying Manafort for political work, fled that country for Russia. Asonye said Yanukovych had been Manafort’s “golden goose.”

    Manafort then turned his attention to falsifying records to get loans from various banks. Asonye said Manafort misstated his income and hid debt in order to get the banks to approve the loans. In fact, Manafort’s company reported no profits in 2016.

    “He created cash out of thin air,” Asonye said.

    Asonye said that Manafort was an active participant in his financial fraud, paying close attention to the filing of his financial documents, issuing orders to associates and subordinates.

    “Shell companies do not create themselves,” Asonye said.

    3:47 p.m.: Prosecution finishes opening statement

    Assistant U.S. Attorney Uzo Asonye noted that Paul Manafort’s defense team may try to attack the credibility of key witnesses, notably his ex-business partner Richard Gates, who served as deputy chairman of Trump’s campaign. But Asonye noted these witnesses are the people with whom Manafort chose to surround himself.

    To close, Asonye introduced other members of the special counsel’s team. At the end of the trial, he said, they will ask the jury to send Paul Manafort a message: “To make clear he is not above the law, that the rules apply to him.”

    With that, Asonye sat and Manafort’s defense counsel began.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  2. #2

    Re: A Chronicle of our Descent to Hades

    Opening Statements by the Defense via Washington Post

    3:53 p.m.: Manafort reveals defense: Blame Richard Gates

    For months we have heard pieces of the government’s case against Paul Manafort. Now we know his defense: Blame Richard Gates, his former business partner and deputy.

    “This case is about taxes and trust,” defense attorney Thomas Zehnle told the jury. “Mr. Manafort placed his trust in the wrong person … Rick Gates.”

    Gates, Zehnle noted, has already pleaded guilty to lying to the U.S. government, yet prosecutors are now telling a jury to believe his testimony.

    “There are two sides to every story; it’s an old adage but it’s true,” Zehnle said.

    Zehnle sought to humanize Manafort, asking him to stand and saying he was “proud” to represent him.

    He said Manafort was a “talented political consultant” and second-generation immigrant and the first in his family to go to college. He has been “at the pinnacle of U.S. politics for forty years,” Zehnle said, and a “driving force in the candidacy of multiple U.S. presidents.”

    For that, he said, “Paul Manafort has rendered a valuable service to our system of government.”

    At that point Judge T.S. Ellis III interrupted Zehnle as he had Assistant U.S. Attorney Uzo Asonye, asking, “I take it you plan to offer evidence?” Ellis told the defense attorney to stick to what would be shown.

    Zehnle said Manafort built “one of the most successful political consulting and government relations shops in Washington,” while also working on “the global stage.”

    That work was not partisan, Zehnle said, pointing out that Tad Devine, a former strategist for Sen. Bernie Sanders (I-Vt.), will also testify about working in Ukraine.

    Manafort’s work for Yanukovych was to “bring the country closer to Western democracies after decades of Soviet rule” — toward the European Union and away from Russia, Zehnle said. That comment was met with audible sneers from a few of those seated in the courtroom.

    4 p.m.: Defense says Manafort never intentionally deceived the IRS

    Defense attorney Thomas Zehnle said Paul Manfort’s unusual financial arrangements, including bank accounts in Cyprus, came at the behest of the people in Ukraine who were funding Manafort’s work. Zehnle said Manafort never intentionally deceived the IRS about his income, but instead did not realize he needed to file certain forms and make certain declarations.

    “This is not a case where someone flew to Switzerland and stashed money in an account,” Zehnle said.

    Zehnle said that, four years ago, Manafort willingly sat down with FBI agents who were investigating the misuse of funds in Ukraine. He said the real reason the special counsel was pursuing the case was because of Manafort’s former business partner.

    “We are primarily here because of one man: Rick Gates,” Zehnle.

    4:11 p.m.: Defense accuses Gates of embezzling from Manafort

    Defense attorney Thomas Zehnle returned to the topic of Richard Gates repeatedly, saying Manafort’s one time protege and partner had made a deal to lie about Manafort’s actions to hide his own wrongdoing. Zehnle said Gates had even lied to federal investigators in the process of negotiating his plea deal.

    Notably, Zehnle also for the first time accused Gates of embezzling millions of dollars from Manafort’s business and then working to hide the income.

    “Rick Gates had his hand in the cookie jar and he couldn’t take the risk that his boss might find out,” Zehnle said.

    Other people involved in Manafort’s finances — bookkeepers and accountants — were not talking to one another as they should have, Zehnle said, because Gates kept them from doing so.

    A attorney for Gates did not return messages seeking comment.

    Zehnle said government witnesses would back up Manafort’s account. Amanda Metzler, for example, was the in-house bookkeeper at Manafort’s company and gave information to their tax accountants. “She knew about offshore companies; none of this was hidden from her,” Zehnle said. “It was open and it was transparent.”

    Zehnle said the business was composed of “a very small staff generating large revenues,” and the finances were “complicated.” He said Gates handled “income, expenses, loans and the like … Rick Gates was the contact employee for all the day to day.”

    The firm reported $92 million in income from 2005 to 2015, Zehnle said, and Manafort alone reported $30 million in that time period.

    4:24 p.m.: Defense finishes opening statement

    Zehnle returned to Gates in the final section of his opening statement, re-emphasizing many of the same themes he already had tried to convey to jurors. Manafort misplaced his trust in Gates, Zehnle said, and Manafort’s partner essentially cheated Manafort, who was busy running political campaigns and doing consulting work in Ukraine.

    Gates was supposed to be keeping track of the money that was flowing in and working with professionals to ensure the income was reported correctly, but instead manipulated the situation to “line his own pockets,” Zehnle said.

    “Rick Gates kept his name on the Cyprus account so he could control the money,” Zehnle said.

    Zehnle said that prosecutors would try to make their case by trotting out the luxurious lifestyle that Manafort’s work had afforded him, but that was not proof that a crime had actually occurred.

    “Paul Manafort travels in circles many people will never know and got handsomely rewarded for it,” Zehnle said.

    He said his client lived a life “most people could only dream of,” Zehnle added.

    Zehnle implored the jury not to be dazzled by expensive tailored suits, Range Rovers, sports tickets and other luxury items, saying they had seem them before. He then returned one final time to Gates.

    “Money is coming in fast, and it was a lot,” Zehnle said. “Paul Manafort was trusting Rick Gates was keeping track of it.”

    Zehnle said Manafort was open with the banks about why he was seeking loans. Despite what prosecutors said about Manafort falsifying information, Zehnle said the banks were ultimately given all the documentation they requested before they made the loans.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  3. #3

    Re: A Chronicle of our Descent to Hades

    4:45 p.m.: Government calls its first witness: former Bernie Sanders adviser Tad Devine

    The government has called its first witness: Tad Devine, the architect of Bernie Sanders’s presidential campaign. Devine also worked closely with Paul Manafort as a political consultant in Ukraine, a striking demonstration of how U.S. political consultants from across the spectrum take their expertise overseas, where they earn big bucks advising foreign candidates.

    He is likely to lay out exactly what Manafort was doing during his years in Ukraine.

    5:04 p.m.: Devine describes how he came to work with Manafort in Ukraine

    Tad Devine, who was Bernie Sanders’s chief strategist in the 2016 election, explained to jurors how he came to work with Paul Manafort in Ukraine. He said his then-partner, Mike Donilon, was contacted by Manafort’s then-partner, Richard Gates, in 2005 about working for the Party of Regions, a pro-Russia political party in Ukraine.

    Devine said he has done work in nine countries, and at the time was coming off an international campaign. Donilon, Devine said, was busy with a domestic project, so Devine took the lead and went to Kiev.

    “Even though I’m not familiar with the culture or other things in a country, I’m very familiar with campaigns,” Devine said, adding that he specialized in television ads.

    Devine said he worked in Ukraine from 2005 to 2010 and returned briefly for a project in 2014. “It was an incredible operation,” he said of his first campaign there. Manafort had hired great people, he said, and had “substantial resources … I was really impressed by him.”

    On the importance of financial backing, he said, “If you don’t have a lot of resources, how can you win?”

    Devine said he learned from talking to people on his first trip that there had been “a lot of controversy” in Ukraine, including a revolution that forced Viktor Yanukovych, who was part of the Party of Regions, from power.

    But he said people “believed Yanukovych had moved on and lost a lot of the people with him” who were controversial, that it was “a new election and a new time.” Yanukovych’s “standing was low,” Devine said, and he was seen as “part of the past.”

    Yanukovych became “part of the future” — he was elected prime minister in 2006 — because of the “excellent campaign that Paul ran,” Devine said.

    Devine described his relationship with Manafort as “friendly” and said he handed over many documents earlier this year in response to a subpoena. Devine’s testimony is important because it is the work in Ukraine that prosecutors say funded Manafort’s lavish lifestyle. They say Manafort did not appropriately report or pay taxes what he earned overseas, and when Yanukovych was forced from power, Manafort’s money flow was cut off, prompting some of his later bank fraud.

    5:22 p.m.: ‘Paul was in charge’: Witness describes how Gates answered to Manafort during work in Ukraine

    Tad Devine described the campaign operation he became a part for the 2009-2010 election. He said he was impressed with Paul Manafort’s operation and that Manafort maintained a good relationship with his patron, pro-Russia political candidate Viktor Yanukovych.

    “It was a very close relationship,” Devine said.

    Devine said he was brought on Yanukovych’s campaign to produce TV commercials and write speeches, among other activities. Devine was to be paid $500,000 and $100,000 if Yanukovych won the presidential election, which he ultimately did. Devine testified he was paid the full amount.

    While working on the campaign, Devine met Richard Gates and other players around Manafort, including Konstantin Kilimnik, who worked as a translator. The special counsel said in court documents Kilimnik has ties to Russian intelligence.

    Devine said Manafort was clearly the boss in his relationship with his partner, Gates.

    “Paul was in charge,” Devine said. “Rick worked for Paul.” That is important because Manafort’s defense attorneys have sought to put the blame on Gates for what prosecutors say was fraud directed by Manafort.

    Devine said Manafort hired a range of other campaign consultants from the United States, including pollster Tony Fabrizio, who also worked on Donald Trump’s presidential campaign.

    5:26 p.m.: Witness: Manafort’s team brought American-style politics to Ukraine

    Tad Devine described to the jury how Paul Manafort’s team brought American politics to Ukraine, including professional polling and advertising, a team of advance staffers, and people to monitor the voting process itself. When Viktor Yanukovych won the presidential race in February 2010, it was Devine who wrote his victory night speech.

    That night, Devine and Manafort exchanged congratulatory notes, with Devine offering especially complimentary comments on Manafort’s work. Devine said he told Manafort that he had brought “tremendous discipline” to Yanukovych’s effort. He explained to the jury that campaigns often go awry when they go off message. But the Ukrainian’s campaign “delivered the message with numbing repetition,” thanks to Manafort.

    Devine testified that Manafort had explained to him where the money for the campaign had come from: Ukrainian businessman Rinat Akhmetov.

    “They would call him an oligarch,” Devine said, explaining that his wealth totaled in the billions and that he was the Party of Regions’ primary supporter. Manafort, he said, knew Akhmetov well.

    5:36 p.m.: Witness: Manafort sought work for current Ukrainian president after Yanukovych’s ouster

    Tad Devine illuminated for jurors the work Manafort sought after then-President Victor Yanukovych fled to Russia in 2014 after widespread protests. “left” in 2014. He said that in 2014, Richard Gates asked him to come and meet with former Party of Regions members starting to start a new political party called the Party of Development. It was for those meetings that, according to court exhibits, that Devine charged Manafort’s firm $10,000 a day.

    In 2014 Devine comes back, tells Rick Gates his rate will be $10,000 a day

    — Rachel Weiner (@rachelweinerwp) July 26, 2018
    That same year, Devine said Gates tried to recruit him to work for another politician, current President Petro Poroshenko. Poroshenko, who made billions in the chocolate industry, first won election as a pro-European, anti-corruption candidate, after Yanukovych’s outser in 2014.

    It’s not clear whether Gates and Manafort were hired by Poroshenko. “They were trying to put it together,” Devine said. He added that he did not work on the project.

    5:47 p.m.: Day one of the trial concludes

    Defense Attorney Richard Westling began his cross examination of Tad Devine by asking what he thought of Paul Manafort. Devine said he thought highly of the work Manafort did as a political consultant. “Paul worked harder than anybody,” Devine testified. “There were emails sent through the night.”

    Devine agreed with Westling that you could make a lot of money as a political consultant “sometimes.”

    On what is known as “redirect,” with prosecutors again asking the questions, Devine testified that he had no bank accounts in Cyprus. Prosecutor Greg Andres had asked the question to highlight the difference between the Democratic strategist and his boss in Ukraine.

    Outside court, Devine declined to comment, saying “Paul deserves a fair trial.”

    That conluded the first day of the trial. Prosecutors indicated the first witness Wednesday will be Daniel Rabin, another political consultant who worked with Manafort in Ukraine and an unnamed FBI agent. The proceedings start at 9:30 a.m.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  4. #4

    Re: The Manafort Trial

    Day 2

    9:15 a.m.: First round of testimony focuses on Ukraine

    While Paul Manafort is the one on trial, the first round of testimony is focused in part on how two Democratic strategists worked with him to help strongman Viktor Yanukovych and his Russian-backed, oligarch-funded Party of Regions win power in Ukraine.

    The only witness to appear Tuesday, Tad Devine, was Bernie Sanders’s chief strategist in 2016. Wednesday’s first witness is Daniel Rabin, who has worked for Minnesota Gov. Mark Dayton, Providence Rhode Island Mayor Jorge Elorza and the Sierra Club.

    Both Devine and Rabin have done significant overseas work; Devine testified Monday that he has worked in nine countries. On his website, Rabin touts his work for former president Manuel Zelaya in Honduras, the Sandinista Renovation Movement in Nicaragua, the Democratic Party of Thailand and several other international campaigns — including a Kiev mayoral race — but not for Yanukovych and the Party of Regions.

    Devine’s firm got a $100,000 victory bonus after the 2010 presidential election and a $50,000 bonus after municipal elections later that year, according to financial records entered as exhibits.

    “I’m sure you have forgotten about this minor detail, but I haven’t,” Manafort wrote after the 2010 presidential race. “Bonus for success.”

    Those records indicate he also made $122,000 for a brief 2014 trip to Kiev to speak to former Party of Regions members who had formed a new party after Yanukovych was ousted from power.

    9:27 a.m.: The most interesting character jurors will likely learn little about

    He may be the most interesting character in the Paul Manafort trial, but the jury is unlikely to ever be told the most interesting things about him.

    On the first day of Manafort’s tax and bank fraud trial on Tuesday, Manafort’s former business associate Tad Devine was asked more than once about Konstantin Kilimnik. Each time he was asked, Devine, a political consultant who helped Manafort run campaigns in Ukraine, testified that Kilimnik was Manafort’s Kiev-based translator.

    But that’s not all the Russian army veteran was. According to court documents previously filed by the special counsel’s office, Kilimnik has been assessed by the FBI to have ties to the GRU, the Russian military intelligence unit that has been accused of hacking Democrats before the 2016 election. Kilimnik, who worked for Manafort starting in 2005, has denied that allegation, indicating he served in the early 1990s in the Russian military but was never involved with intelligence.

    Because Manafort speaks no Russian or Ukrainian, people who worked the American consultant in Ukraine have said that Kilimnik became his local alter-ego and was eventually named manager of his Ukraine operations.

    Manafort remained in close contact with Kilimnik even after he became Donald Trump’s campaign chairman in 2016. Over email, the two discussed how to use Manafort’s new role to make money. Manafort also asked Kilimnik to extend an offer to hold “private briefings” about the campaign to Oleg Deripaska, a Russian billionaire and former Manafort business partner. In August 2016, Kilimnik came to New York and had dinner with Manafort, where the two discussed the presidential campaign.

    Just this year, prosecutors have said that Kilimnik, acting on Manafort’s behalf, contacted witnesses who will likely be called in the second of two criminal trials Manafort is facing. That trial is scheduled for September in Washington. As a result, Kilimnik was charged with obstruction of justice. Prosecutors have said he is living in Russia and has not been arrested.

    But will any of that come out at the trial now underway in Alexandria? Unlikely. Prosecutors have agreed that they will leave Russia and any suggestion of Trump campaign coordination with Russia out of a trial that will focus on Manafort’s personal finances.

    In Alexandria, Kilimnik will likely be known only as Manafort’s translator.

    (Long discussion about the occupant of the WH's tweets today)

    10:02 a.m.: Ellis tells prosecutors to stop using the word ‘oligarch’

    Before testimony began Wednesday, Judge T.S. Ellis III told prosecutors he was concerned repeated descriptions of Manafort’s Ukraine financiers as “oligarchs” would bias the jury.

    “An oligarch is just a despotic power exercised by a privileged few,” Ellis said. “What I want to avoid … is somehow to use the term to mean he was consorting or paid by people who were criminals — there will be no evidence of that.”

    Prosecutor Greg Andres protested that the people funding Manafort’s work in Ukraine are commonly referred to there as oligarchs. Political consultant Tad Devine described one such man, Rinat Akhmetov, as an oligarch in his testimony Tuesday.

    Ellis interrupted the prosecutor. If the term just referred to a billionaire involved in politics, Ellis said, then both George Soros and the Koch brothers would qualify.

    “The term oligarch has come to have a pejorative meaning,” the judge said. “We are not going to have this case find that he associated with despicable people and therefore he’s despicable — that’s not the American way.”

    Ellis said the government could file a brief on the issue if they want but did not think use of the term was necessary.

    10:12 a.m.: First witness of the day takes the stand

    Daniel Rabin, a political ad maker who worked with Paul Manafort in Ukraine from 2006 to 2014, has taken the stand. Under questioning from prosecutor Greg Andres, Rabin began to explain how Manafort’s team put together American-style radio and TV ads for the Ukrainian Party of Regions and its presidential candidate, Viktor Yanukovych, as well as a mayoral candidate.

    Under questioning, Rabin noted that his work ended in 2014. This is a touchy spot for prosecutors, who have promised Judge T.S. Ellis III that they will avoid discussion of Russia and its role in Ukraine. In fact, Yanukovych’s term as president ended amid violent street protests, after which he fled to Russia, where he continues to leave.

    But on questioning, Rabin did not disclose those facts to the jury. Instead, Andres inquired if something happened in 2014 that caused his partnership with Manafort to conclude. Rabin responded simply, “The project ended.”

    Andres continued, “Was there a change in political party in 2014?” “There was,” Rabin responded.
    Next, Andres appeared to try to establish that Manafort was a detail-oriented boss who was clearly in charge of his team.

    This will be important later, as the defense team has made clear that they intend to argue that Manafort left certain key responsibilities to his associate, Rick Gates.The defense has sought to point the finger at Gates for the fraud and even accused Manafort’s former business partner of embezzlement.

    Asked to describe what kind of leader Manafort was, Rabin responded, “He demanded a lot of the people who worked for him. He was thorough. He was strict. He ran a good campaign.”

    (Profile of Judge Ellis)

    10:35 a.m.: Witness describes work in Ukraine

    Daniel Rabin continued his testimony by describing the nature of the work he did in Ukraine and the constellation of political consultants who surrounded Paul Manafort. Prosecutors are trying to show the jury the scope of Manafort’s work over roughly a decade in the country. Rabin said he was tasked with making 30-second commercials for various political campaigns ranging from presidential elections to parliamentary races and even a local contest for mayor. Manafort and ultimately, his patron, Viktor Yanukovych, would approve the final cuts of the ads.

    Rabin said he met Yanukovych on two occasions, when the former Ukrainian president came to sets to film political ads. Prosecutor Greg Andres showed Rabin a photo from one of the shoots, which was not shown to the courtroom. Rabin testified the photo showed Yanukovych and his staff members being introduced to Rabin and another Manafort employee, Phil Griffin.

    Rabin went on to name some of the other American political consultants he worked with in Ukraine, as well as Rick Gates, Manafort’s former partner and the prosecution’s star witness. Gates is scheduled to testify later in the trial and is expected to offer key evidence of Manafort’s financial wrongdoing.

    “Rick was the gatekeeper,” Rabin told the jury. “We didn’t want to bother Paul with schedules and invoices.”

    Rabin also described the work of Konstantin Kilimnik, saying he worked as translator for Manafort. Kilimnik translated the scripts Rabin produced for ads into Ukraine, before the spots were filmed. The special counsel’s office says in court filings that Kilimnik has ties to Russian intelligence. In all Rabin, said he made roughly 40 trips to Ukraine during the 2006-to-2014 period he worked with Manafort.

    (Profile of Lawyers)

    10:52 a.m.: FBI agent reveals details of Manafort search

    An FBI special agent testified that when a team searched Paul Manafort’s Alexandria condominium last August, they knocked three times and then entered with a key.

    They did not have a “no-knock” search warrant allowing them to simply bust into the unit and did not pick the lock, Agent Matthew Mikuska testified.

    The agents arrived just after 6 a.m., Mikuska testified. They waited 30 seconds between each knock; no one answered. But when they entered with the key and opened a door to the left, he said, they saw Manafort.

    Mikuska described the condo as a “large luxury unit.” Jurors were shown a picture of the building, though the judge questioned its relevance.

    11:02 a.m.: Documents show money transfers and home improvement proposals

    The trial of Paul Manafort has now entered the document phase. In quick succession, Special Agent Matthew Mikuska has offered brief descriptions of a variety of documents seized during the search of Manafort’s condo in 2017.

    Under Judge T.S. Ellis III’s admonishment that prosecutors move rapidly, the documents were each introduced into evidence with little description or guidance to the jury about how they will become important later in the trial. In general, prosecutors appeared to be trying to establish that Manafort was paying for home improvements on various properties he or his family owned over the years that he was working in Ukraine. One document described wire transfers that totaled $3 million. Another showed a proposal for unnamed home improvements for $750,000. The work was listed at properties in the Hamptons, Brooklyn and Florida.

    The trial is now on a mid-morning break, with testimony to restart around 11:15 a.m.

    11:30 a.m.: Judge grills prosecutors for a second time

    After the defense raised an objection to prosecutors introducing an invoice seized in an FBI raid for proposed work on a Manafort home, Judge T.S. Ellis III dismissed the jury for a break — and then grilled prosecutors for a second time.

    Ellis expressed skepticism over how the invoice actually advanced the prosecution’s case that Manafort filed false tax returns and did not fully report money he had made to the Internal Revenue Service. Furthermore, he worried that it might prejudice the jury against Manafort.

    Ellis asked Assistant U.S. Attorney Uzo Asonye if it showed “just that Manafort is awash in money?”

    Asonye argued the document furthered the prosecution’s case because it showed that Manafort had hid money from tax preparers and a bookkeeper, and that he used money from accounts in Cyprus to pay for a long list of luxury items. Those expenditures were never reported on tax returns.

    Ellis said he would take the argument under advisement and decide later whether to allow the invoice to be introduced. Ellis has signaled some displeasure with the prosecution’s case Wednesday, grousing that it is “gilding the lily” by regularly referring to Manafort’s lavish spending and complaining about the pace. He has interrupted prosecutors on occasion to speed up their questioning and bluntly questioned them at other moments.

    11:38 a.m.: ‘Rein in your facial expressions,’ judge admonishes lawyers on both sides

    Judge T.S. Ellis III said that while he hasn’t seen it himself, he’s been told that lawyers on both sides have “rolled their eyes” after leaving bench conferences.

    The implication, he said, is, “‘Why do we have to put up with this idiot judge?'”

    “Don’t do that,” he told the lawyers. “It’s inappropriate.”

    He said that if he had seen it himself, “I might be a little upset,” but that his eyes are not what they were 40, 50 or 60 years ago. Ellis is 78 years old.

    “Rein in your facial expressions,” he concluded.

    (More Tweeting by the Occupant of the WH)
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  5. #5

    Re: A Chronicle of our Descent to Hades

    Day 2 continued

    11:57 a.m.: Judge rules that prosecutors can’t offer invoice for home renovations as evidence

    Judge T.S. Ellis III ruled that prosecutors cannot enter an invoice for proposed home renovations, saying “All this document shows is that Mr. Manafort had a lavish lifestyle, he had a nice home with a pool and a gazebo — it’s not relevant.”

    He also expressed concern about showing the jury photos of Manafort’s expensive suits, although prosecutors said it was necessary to prove the defendant bought and kept those items.

    “To parade all of this again seems to me unnecessary,” he said.

    The judge’s skepticism could be troublesome for prosecutors, who are trying to present the case that Manafort lived a life of luxury but paid no taxes on money he earned.

    On Manafort’s items from “House of Bijan,” a menswear company that bills itself as the world’s most expensive, Ellis expressed confusion.

    “Is it Bi – yan?” he asked, pronouncing the word as if it was Spanish. Company founder, Bijan Pakzad, was Iranian and the name is pronounced with a hard “J.”

    “I can’t recognize these names,” Ellis said. “If it doesn’t say ‘Men’s Wearhouse,’ I don’t know it.”

    12:01 p.m.: Judge stops prosecution from showing pictures of luxury suits, for now

    FBI Special Agent Matthew Mikuska has retaken the stand, but his testimony may not be as colorful as prosecutors may have hoped. Judge T.S. Ellis III expressed continued displeasure with the prosecution’s desire to enter detailed evidence about the items Paul Manafort purchased with money routed from offshore bank accounts.

    Ellis deferred on ruling whether prosecutors may enter photos of luxury suits found in Manafort’s condo until later in the trial, indicating he wants to better understand whether the pictures are necessary to prove they were purchased with income hidden in foreign bank accounts.

    But he denied prosecutor Uzo Asonye’s request to show the jury pictures of the suits and their high-end labels, which means the pictures were also not shown to the public.

    12:01 p.m.: Judge stops prosecution from showing pictures of luxury suits, for now

    FBI Special Agent Matthew Mikuska has retaken the stand, but his testimony may not be as colorful as prosecutors may have hoped. Judge T.S. Ellis III expressed continued displeasure with the prosecution’s desire to enter detailed evidence about the items Paul Manafort purchased with money routed from offshore bank accounts.

    Ellis deferred on ruling whether prosecutors may enter photos of luxury suits found in Manafort’s condo until later in the trial, indicating he wants to better understand whether the pictures are necessary to prove they were purchased with income hidden in foreign bank accounts.

    But he denied prosecutor Uzo Asonye’s request to show the jury pictures of the suits and their high-end labels, which means the pictures were also not shown to the public.

    The prosecutors’ proposed exhibit list contains a list of photos of various items Manafort had purchased that the special counsel’s office appeared interested in displaying to the jury. Ellis’s reticence may mean few or none are displayed, leaving jurors to learn about Manafort’s purchases entirely from invoices and other documents.

    12:28 p.m.: Richard Gates, thought to be key witness, ‘may testify, he may not,’ prosecutor says

    Assistant U.S. Attorney Uzo Asonye surprised the judge when he casually mentioned that Richard Gates, Paul Manafort’s former partner and the expected star witness of the case, may or may not testify. The prosecutor was responding to a question about an agenda from a meeting with Gates in 2013.

    “He may testify, he may not,” Asonye said of Gates. “We’re trying to shorten the trial.”

    The prosecutor said that was not because of anything particular to Gates; every witness, he said, might not be necessary depending on how the evidence unfolds. Ellis said it was news to him and obviously many others.

    “Twenty-five people just scurried out of here like rats leaving a sinking ship,” Ellis said, referring to reporters who left the courtroom to post about what the prosecutors said.

    Gates not taking the stand would be a curious development in the case. Prosecutors had accused Gates of being a participant in most of the fraud that Manafort is charged with, and he would be able to provide an intimate window into what they were doing. Earlier this year, Gates pleaded guilty to conspiracy and lying to the FBI and agreed to cooperate with prosecutors.

    Manafort’s lawyers, though, have made Gates the centerpiece of their defense. They have said Gates embezzled money from the men’s business and the fraud was meant to hide his own misdeeds.

    “Rick Gates had his hand in the cookie jar and he couldn’t take the risk that his boss might find out,” one of Manafort’s defense attorneys said Tuesday.

    12:45 p.m.: At least three more witnesses expected in the afternoon

    The trial has broken for lunch, and the parties will return at 1:30 p.m. Prosecutors told the judge that they would aim to hear from at least three witnesses this afternoon.

    Maximillian Katzman, Ronald Wall, and Daniel Opsut are set to testify. Katzman works for one of Manafort’s suit makers, according to an interview in “MR: The Menswear Industry’s Magazine.” Wall is the chief financial officer for House of Bijan, according to his LinkedIn profile. Opsut works for Mercedes-Benz of Alexandria, according to the business’s website and his LinkedIn profile.

    The three are likely to testify about the things Manafort bought with the money he earned from his Ukraine work. Judge T.S. Ellis III has been skeptical of that line of inquiry, saying he felt it “unnecessary” for prosecutors to tout Manafort’s life of luxury to prove their case.

    1:06 p.m.: Why Richard Gates is such a pivotal figure

    Assistant U.S. Attorney Uzo Asonye surprised those watching the Paul Manafort trial Wednesday when he vaguely suggested Richard Gates, Manafort’s former business partner, might not testify. Gates was expected to be the prosecutors’ star witness, a man who could describe the fraud that the government says Manafort perpetrated because he was a part of it. He has also been the focus of Manafort’s defense attorneys, as they say Gates embezzled money from Manafort’s company and committed fraud to cover his own tracks.

    As Rachel Weiner explained in her post looking at the characters in the Manafort trial, Gates and Manafort were close. She wrote:

    Gates started his career as an intern at the aggressive, controversial political consulting firm Manafort co-founded, working closely with Republican lobbyist Rick Davis. Gates left the firm to work for companies in the lottery and gaming business, former partner Charlie Black has said. But he reunited with Davis and Manafort at their new firm in 2006 and became, in the words of his indictment, Manafort’s “right-hand man.” Manafort had just begun doing political consulting work for Viktor Yanukovych, an aspiring Ukrainian politician with ties to Russian oligarchs.

    Gates would go on to help Manafort with that work, and prosecutors say both men committed fraud. But Gates pleaded guilty earlier this year to conspiracy and lying to the FBI and agreed to cooperate with prosecutors. Court observers figured his testimony would be a highlight of the trial.

    It still could be. Asonye said there was nothing particular about Gates that made it such that prosecutors might not call him, only that the government was trying to speed the case along. If prosecutors did not, they would have to rely on documents and other witnesses — who perhaps were not as intimately involved in the dealings as Gates was — to build their case.

    1:19 p.m.: ‘I hope he is innocent. But I don’t know.’: Manafort’s former business partner describes happier times

    Paul Manafort’s former business partner, Charlie Black, recalled happier times in the 1980s when the two men – along with Republican operative Roger Stone – formed a lobbying and consulting firm that would become a K Street powerhouse, Black, Manafort & Stone.

    Black sat down a few weeks ago with a Washington Post video team and recalled the heady era when he and Manafort went in to business together.

    “Paul was very smart and impressive and outgoing,” Black said describing the Manafort he knew in 1980. “When he did a good job for [Ronald] Reagan and Reagan won, there was a whole network of people around the country who came in to Washington to work for President Reagan,” he said. “By the time we started our business he had a lot of contacts both in Congress and around the administration.”

    Black knew of Manafort’s political acumen but he quickly showed himself to be a brilliant lobbyist, impressing members of Congress and key members of the new administration, some of whom he knew from the campaign.

    “He’s able to study and learn policy issues very quickly,” Black recalled. “And he’s a good strategist and he’s good with people.’’ Manafort was also a brilliant salesman, always keen to make a good impression, Black said.

    “Even when we were poor, Paul dressed well and tried to make a good impression on people,” he said. He recalled that by 1983 the young principals in the firm were making six figures and decided to get company cars. “Paul got a Mercedes.”

    He noted the work Manafort did professionalizing the Trump campaign before his resignation and he termed his former’s partner’s indictment “a tragedy.” He said he had not followed Manafort’s career closely for the past decades.

    “I hope he is innocent,” he said. “But I don’t know.”

    —Tom Hamburger

    (Report of Huckabee Sanders saying her boss thinks Manafort is being treated unfairly)

    2:07 p.m.: Custom suit maker says Paul Manafort was a top client

    Paul Manafort was one of only about 40 clients of Alan Couture, a “luxury menswear boutique” in Midtown Manhattan, 29-year-old Maximillian Katzman testified Wednesday just after the lunch break.

    Katzman, who wore a shiny blue suit with a blue-and-white striped tie and a cream colored pocket square, said Manafort was a client “as long as I worked there” and was “absolutely” an important one.

    Until last year Katzman was the manager of the business, which was founded by his father, Alan Katzman.

    The younger Katzman began working there in 2008. Katzman testified that his father met Manafort at House of Bijan, another luxury menswear boutique, when that business was located in New York. It’s now on Rodeo Drive in Beverly Hills.

    Asked if all Alan Couture clients are important, Katzman replied, “I don’t want to answer that,” to laughter from the courtroom. He said Manafort bought suits, sports coats, outerwear and other menswear.

    2:18 p.m.: Witness: Manafort spent hundreds of thousands on suits, paid by wire transfers from foreign bank accounts

    Luxury menswear seller Maximillian Katzman told the jury that Paul Manafort was unique in certain ways for Alan Couture. For one, he purchased an unusually high number of suits. Katzman testified that Manafort was one of the store’s top five customers.

    For another, he paid in unusual ways. Unlike most customers who paid by check, Katzman testified, Manafort paid by wire transfers from foreign bank accounts. He was the only of the store’s customers to do so, Katzman testified.

    Maximillian Katzman, 29, the manager of a luxury menwear store in New York City, testifies that Paul Manafort spent more than $929,000 on suits between 2010 and 2014. He was the store's only customer to pay using wire transfers from foreign accounts.

    — Rachel Weiner (@rachelweinerwp) August 1, 2018
    Katzman then was asked to review invoices from Manafort’s purchases. For a long moment, the jury sat in silence as Katzman flipped through a book of exhibits, invoice after invoice after invoice — a striking demonstration of just how many suits Manafort purchased. At the end, Katzman walked through the total dollar figure of Manafort’s purchases in the years between 2010 and 2014.

    Manafort spent nearly $104,000 in 2010, and more than $444,000 in 2013. Added up, the figures show Manafort spent more than $929,000 on luxury menswear during the five-year period, paid for from foreign bank accounts.

    Judge T.S. Ellis III continued to show impatience with questions from prosecutors that he believed were intended merely to display Manafort’s lavish lifestyle. For instance, he allowed Katzman to describe Manafort’s annual spending but not to add up the total for jurors.

    “Let’s move on. Enough is enough,” Ellis said sternly. “They can add.”

    Katzman testified that Manafort’s payments came from accounts under the name Yiakora Ventures Limited and Global Highway Limited, both Cyrpus-based accounts prosecutors will argue were controlled by Manafort.

    2:35 p.m.: Manafort bought suits from ‘The World’s Most Expensive Store’

    House of Bijan in Beverly Hills bills itself as “the world’s most expensive store.” Ronald Wall, its chief financial officer and prosecutors’ fourth witness Wednesday, took the stand to testify that Paul Manafort was a top client of the luxury clothier.

    “I knew he was a very good customer,” said Wall.

    Prosecutors did not focus simply on the purchases themselves, but rather, how Manafort paid for them — via wire transfers. Like the previous witness, Wall said many customers paid with credit cards, checks and sometimes cash, but it was unusual for a client to pay with wire transfers, as Manafort regularly did at House of Bijan.

    Wall testified that House of Bijan was an exclusive retailer: its clothing is only sold in its store and the items are made in Italy by less than two dozen companies the retailer has built a relationship.

    As with earlier witnesses, the focus on Manafort’s lavish spending drew the irritation of Judge T.S. Ellis III, who questioned how it proved the government’s case that Manafort filed false tax returns.

    [House of Bijan labels and House of Bijan watch among list of evidence federal prosecutors may use at Manafort trial]

    “You have to prove beyond a reasonable doubt that he signed tax documents to show he knowingly didn’t represent his true income,” Ellis told prosecutors.

    3:01 p.m.: Manafort’s two-year bill at House of Bijan: $334,000

    Ronald Wall tallied for the jury the total amount that Paul Manafort spent on House of Bijan items, including a Limited Edition black titanium Royal Way watch — with crystal, an invoice noted.

    Between 2010 and 2012, Wall told the jury that Manafort spent more than $334,000 at the luxury menswear store. He then walked the jury through documents showing that the invoices were paid from Cyprus-based bank accounts held by Global Highway Limited, Yiakora Ventures Limited and Lucicle Consultants.

    Wall was briefly cross-examined by defense attorney Jay Nanavati, telling the jury that he never had interactions with Manafort and did not know anything about his purchases beyond what the records demonstrate. That is important because prosecutors are trying to tie Manafort directly to the movement of his money, which they say he failed to pay taxes on.

    Asked in the hallway after leaving the stand about his own suit, Wall opened his suit jacket to show its lime-green lining, which matched his silk lime green tie. The suit was made by Bijan, he said.

    “Very fine wool,” he said. “Super great stuff.”

    3:27 p.m.: Prosecution could rest case next week

    Assistant U.S. Attorney Uzo Asonye told Judge T.S. Ellis III following an afternoon break that the prosecution is ahead of schedule and could rest its case next week.

    That timeline means the trial would end sooner than the three weeks prosecutors had initially said they thought it would last.

    Asonye’s comments come after he told the judge earlier in the day that he may or may not call the prosecution’s star witness.

    Asonye said prosecutors were trying to shorten the trial, and that they were making case-by-case decisions on which witnesses to call, depending on the evidence.

    Rick Gates, Manafort’s former partner, was expected to provide key evidence about his boss’s finances.

    Ellis has been pushing prosecutors to speed up their case and has expressed annoyance about the volume of evidence they have attempted to introduce at various points. His court district, the Eastern District of Virginia, has a reputation for pushing cases through quickly, earning it the nickname “Rocket Docket” among D.C.-area lawyers.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  6. #6

    Re: A Chronicle of our Descent to Hades

    Day 2 continued

    3:42 p.m.: Prosecutors point to Manafort’s vehicle purchases, wire transfers

    Prosecutors’ fifth witness Wednesday, and sixth overall, was Daniel Opsut, a salesman at Mercedes Benz of Alexandria.

    Opsut testified that Kathleen Manafort, Paul Manafort’s wife, paid for a new SL550 in 2012 with a wire transfer from Lucicle Consultants Ltd, one of the Cypriot shell companies prosecutors say Manafort used to hide his Ukrainian income. The car cost $124,000 but Manafort traded in two older Mercedes, an E350 convertible and an SL500, saving herself $56,000.

    “It’s not common, but it’s not unheard of” for customers to pay by wire transfer, Opsut testified.

    The government also introduced a stipulation that Paul Manafort and his daughter Andrea used a $83,525 wire transfer from Lucicle Consultants to buy a 2012 Land Rover Range Rover from Don Beyer Motors in April of 2012. A stipulation means Manafort’s defense does not contest that piece of evidence.

    Paul and Kathleen Manafort used the same company to lease a 2012 Range Roger with a $12,525 down payment that same month. In June, they bought a Range Rover, and, again, $67,655 of the cost was paid for through Lucicle Consultants.

    4 p.m.: Real estate agent and neighbor describes Manafort’s involvement in daughter’s home purchase

    Wayne Holland, a real estate agent and neighbor of Paul and Kathleen Manafort, was the next witness, prosecutors’ seventh overall.

    Holland testified that he has known Manafort for over 30 years. He first met the Manaforts while visiting friends who lived nearby, before he himself moved in across the street. He said that as he was looking out the window, he happened to see a bolt of lightning shoot down from the sky, striking the Manaforts’ chimney and scattering rocks all around.

    Holland said he met Paul Manafort when he and his friends called to ensure the Manaforts were OK.

    Holland testified that he had watched both of Paul Manafort’s daughters, Andrea and Jessica, grow up, and in 2012 served as Andrea Manafort’s real estate agent when she purchased a home in Arlington. He told the jury that Paul Manafort was closely involved in the purchase of the home.

    Paul Manafort was the first one to call Holland and alert him to Andrea Manafort’s interest, and he and his wife both toured the home before she decided to proceed with the purchase, Holland testified. Ultimately, Holland testified that the Andrea Manafort paid the down payment on the home, but Paul Manafort paid the remainder of the all-cash purchase.

    Holland read an email aloud to the jury from Paul Manafort that indicated he would be paying for the $1.9 million home through a wire transfer from Lucicle Consultants, which jurors learned earlier was a Cyprus-based bank account. Holland told the jury that he has never met Manafort’s business partner Rick Gates, and Gates played no role in the transaction. That is important because defense attorneys have sought to cast the blame for Manafort’s alleged misdeeds on Gates.

    Under cross examination, Holland told the jurors that Paul Manafort is one of the nicest neighbors he has had.

    4:26 p.m.: Contractor: Manafort spent more than $3 million on home renovations

    In a continuing effort to show Paul Manafort tried to evade taxes by paying vendors from foreign accounts, prosecutors called a contractor who performed nearly $3.3 million of work on the homes of Manafort and his family in the New York area.

    Stephen Jacobsen, who owns the home improvement company SP&C, testified he “absolutely” considered Manafort a good client.

    “He provided more and more work on larger projects,” Jacobsen said.

    4:37 p.m.: Discrepancies in invoices highlighted, but the significance is unclear

    Prosecutors have twice Wednesday pointed to invoices that witnesses have described as inaccurate, but they have not made clear the implication of the discrepancies.

    Early in the afternoon, high-end suit purveyor Maximillian Katzman testified about a bill purportedly from the company he worked for, Alan Couture, to the company “Global Endeavour.” But “Couture” was misspelled, the zip code was wrong, and Alan Couture never billed Global Endeavour.

    Defense attorney Jay Nanavati asked if Katzman was aware of Rick Gates’ “level of education and spelling abilities.” Katzman said he was not. He said he never met Rick Gates, although he sometimes emailed with him about Manafort.

    Later, Stephen Jacobsen testified that a bill to Global Endeavour had “a faint imprint” of his home improvement company’s logo. But he said there was no address for the project, and the $130,000 bill was for “architecture and design,” something Jacobsen said he had never done.

    “For that kind of money, I would like to,” he quipped.

    Jacobsen testified that at one point several of his business bank accounts were closed, and he asked Manafort “if it had anything to do with him.”

    “He told me, ‘Don’t worry about it,'” Jacobsen testified. He said Manafort paid him through HSBC Bank, where both men had accounts.

    4:52 p.m.: Final witness testifies about work on home of Manafort’s daughter

    The final witness of the day was Doug DeLuca, who owns a design and construction firm in Northern Virginia. He was the eighth witness to testify Wednesday, and the ninth to take the witness stand overall.

    DeLuca testified that his company was hired in 2012 to design and build “an outdoor concept” at the Arlington home of Andrea Manafort, Paul Manafort’s older daughter. The project included an outdoor kitchen, outdoor living room, an antique brick deck and a pergola.

    Asked what a pergola was, DeLuca provided an indepth explanation of the wooden trellis, with natural growth twisted vines. His detailed description earned the prosecutors one more scolding from Judge T.S. Ellis III, who complained the jury had no need to hear such detailed descriptions of the work.

    DeLuca explained that Paul Manafort was his primary contact for the project. He read aloud an email from Manafort, in which Manafort told DeLuca he would deal with Andrea Manafort on design but with him on the contract and budgeting.

    DeLuca testified the more than $100,000 in bills was all paid by Lucicle Consultants, which jurors have previously heard is a foreign account.

    Testimony has concluded for the day.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  7. #7

    Re: The Manafort Trial

    Day 3 Part 1

    The apparent ostrich jacket that Manafort bought. (Courtesy of the Special Counsel’s Office)

    9:20 a.m.: Pictures of Manafort’s extravagant clothes are made public, as prosecutors press for more evidence of luxurious lifestyle

    The special counsel’s office late Wednesday released to the public a collection of photographs showing the colorful, high-end suits prosecutors say Paul Manafort bought using money in foreign bank accounts. Those are presumably admitted pieces of evidence that jurors will be allowed to see. But there still seems to be debate about just how much they will be allowed to show jurors in court, and whether they can enter even more photographs to bolster their case.

    On Thursday morning, the special counsel’s office filed a motion in court asking Judge T.S. Ellis III for an “opportunity to further explain why such evidence is directly relevant to the elements of the charged offenses and its probative value is not substantially outweighed by the danger of unfair prejudice.” Ellis had repeatedly admonished prosecutors not to dwell on Manafort’s luxurious lifestyle and blocked them from showing jurors pictures and other documents in court.

    The special counsel’s office argued in the Thursday morning court filing that type of evidence was “directly relevant” to the crimes of which Manafort is accused, because it shows that Manafort acted “willfully,” and the money used to pay for the items “came directly from the unreported foreign bank accounts where Manafort deposited his foreign consulting income.”

    Prosecutors also argued that the luxurious nature of the purchases was important because it helped inform their narrative of the case. That Manafort “had an expensive lifestyle that required lots of money to maintain is important proof as to why he would commit the bank frauds,” prosecutors wrote. They wrote that they intend to show Manafort “had grown accustomed to his material wealth,” and when his income declined in 2014, “he resorted to bank fraud as a means to maintain his lifestyle.”

    Prosecutors wrote that asking witnesses about the documents, without showing them to jurors, “could expose the government to appellate risk.”

    The evidence the special counsel’s office made public is itself notable. Along with the pictures of the suits themselves, prosecutors released invoices showing Manafort bought a $15,000 ostrich jacket, as well as $9,500 ostrich vest and an $18,500 jacket made of python skin.

    Another of Manafort’s suits. (Courtesy of the Special Counsel’s Office)

    They also released a handwritten list of Manafort’s auto insurance contacts, showing that in addition to a Mercedes and a Land Rover he had a Chrysler Town & Country and an Aston Martin. They released a copy of Manafort’s passport, with stamps showing many visits to Ukraine.

    And they released memos on his finances, including one to Ukrainian President Victor Yanukovych’s chief of staff, Serhiy Lyovochkin, in April 2013 that prosecutors were repeatedly blocked from showing in court. Manafort was asking the chief of staff for $4.4 million.

    “My exposure is considerably more than the amount due now. It is over $5,000,000. I am really hurting. I cannot carry this big of a load. It is hurting me and my family,” Manafort wrote. In two months, he said, he would need to pay members of the so-called “Hapsburg Group” — a group of European ex-politicians prosecutors say were hired to lobby secretly on Ukraine — as well as other consultants. “That is why I need the old money now. I cannot carry this much, never mind even more,” he said. “This is why a partial payment won’t work now. It could have worked 3 months ago when it was originally supposed to be paid because I was not out of pocket so much. Now, however, I am at a personal breaking point.”

    In another email exchange, Manafort apologizes to suitmaker Alan Katzman for a late payment of $81,500.

    “It puts a tremendous strain on us,” Katzman said of Manafort’s unpaid bills.

    “I apologize for the delays but there is nothing I can do,” Manafort writes. “The international banking situation has been chaotic for the last 4 months with no signs of changing.”

    Depending on what Ellis decides, it is possible prosecutors could enter even more evidence, including pictures of Manafort’s home renovations. They also might be allowed to show what they have already released publicly to jurors in court.

    9:30 a.m.: Will Richard Gates testify? Almost certainly, former federal prosecutor says

    A prosecutor suggested Wednesday that Richard Gates, Paul Manafort’s former business partner who pleaded guilty in the case, might not testify. The comment stunned those in the courtroom who had expected Gates to be a star witness.

    But a former prosecutor from the Eastern District of Virginia said he would not read too much into the remark.

    “I would be shocked if they didn’t” call Gates, said Timothy Belevetz, who is now a partner at the firm Holland & Knight. “If you’ve got a witness who’s really going to be testifying about something that no one else will — transactions, conversations, emails that no one else can put into context — you’re going to want that person to testify.”

    Belevetz said that Assistant U.S. Attorney Uzo Asonye’s comment should be understood in context: he was being challenged on the need to enter a piece of evidence that another witness would testify about later. Belevetz said Asonye did what any prosecutor would in “preserving his options.”

    “What’s he going to say? ‘You’re right, your honor, I’ll discontinue this line of questioning?'” Belevetz said.

    Belevetz said there’s no reason to believe defense attorneys’ plan to put all blame on Gates would have any impact on prosecutors.

    “That’s of course what the defense would do,” he said. “That’s criminal defense 101.”

    Belevetz also said he did not think the judge’s aggressive interventions to limit evidence of Manafort’s lavish spending would rattle prosecutors.

    “I think the government’s going to ultimately able to go back and fix any damage that’s been created here,” he said. They will do so, he said, by telling jurors, “it doesn’t much matter what you spend the money [on] that you acquired by cheating on your taxes. So let’s focus on these false income tax statements, let’s focus on the false mortgage applications.”

    Judge T.S. Ellis III is known for taking lawyers to task, although he tends to be tougher on defense attorneys than prosecutors during trials.

    “His general reputation is that while he’s harder than most judges are on the parties … at the end of the day he’s usually harder on the defense,” Belevetz said. “This may be a bit out of character in terms of the way he typically interfaces with the government. But this is a high profile case and Judge Ellis has always been interested in running a clean and efficient trial, and I think that’s what we were seeing here.”

    9:53 a.m.: Judge addresses evidence of luxury goods, and jabs at special counsel team

    Judge T.S. Ellis III opened court Thursday by addressing a prosecution brief that argued the importance of Manafort’s luxury spending to their case — though he did not offer definitive guidance about how much of that type of evidence they will be allowed to enter.

    A jacket of Manafort’s. (Courtesy of the Special Counsel’s Office)

    The government is “allowed to introduce amounts of money he had,” Ellis said. “What I have not permitted is to gild the lily.”

    He noted in particular that it was irrelevant what Manafort spent his money on.

    “It wouldn’t matter if he spent the money on Men’s Wearhouse clothes,” he said, adding that some luxury items might color jurors against Manafort.

    “All the evidence of the fancy suits really is irrelevant and besmirches the defendant,” he said. “Most of us don’t have designer suits, we don’t have pagodas … it engenders some resentment.”

    Ellis appeared to be referring to the pergola, a sort-of wooden trellis that typically creates shade, that a witness testified Wednesday he built for Manafort’s daughter.

    Ellis said that if the defense argued that Manafort did not spend the money, the government could go into more detail in a rebuttal case, though he said he doubted that would happen. He said jurors will presumably soon learn that Manafort did not pay taxes on the income, which, in his view, is the relevant issue.

    The judge then jabbed at special counsel Robert S. Mueller III’s team of prosecutors, saying “I might have started there had I been the government, but that’s your choice.”

    9:58 a.m.: Prosecution has ‘every intention’ of calling Richard Gates as witness

    Prosecutor Greg Andres said Thursday he plans to call Paul Manafort’s business partner, Richard Gates, as a witness in the trial.

    “We have absolutely put him on the witness list,” Andres told Judge T.S. Ellis III Thursday morning. “We have every intention to call him as a witness.”

    BREAKING: Prosecution says they have "every intention" to call Paul Manafort's partner, Rick Gates, as witness. Some uncertainty on that point yesterday.

    — Rachel Weiner (@rachelweinerwp) August 2, 2018

    The announcement comes one day after Assistant U.S. Attorney Uzo Asonye caught Ellis off guard when he told the judge that Gates “may testify in this case, he may not.” He said prosecutors were interested in shortening the trial and would make the decision to call him based on how the evidence unfolded. Before that, Gates was expected to be prosecutors’ star witness.

    Gates had been charged in the same indictment as Manafort. He pleaded guilty earlier this year to conspiracy and lying to the FBI and agreed to cooperate with prosecutors. Manafort’s defense also has made him a focal point of their strategy, accusing him of embezzling from Manafort and committing fraud to cover his own tracks.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  8. #8

    Re: A Chronicle of our Descent to Hades

    Day 3 Part 2

    10:26 a.m.: A ‘top-five’ client: Manafort spent more than $2 million in five years on home TV and internet set-up, witness says

    Joel Maxwell, the chief operating officer of Florida-based home automation and technology company Big Picture Solutions, said he helped set up television and Internet access at homes Manafort owned up and down the East Coast.

    Between 2011 and 2014, Maxwell said Manafort spent $2.2 million with his company. He was a “top five” client, Maxwell said.

    Like witnesses who testified Wednesday, Maxwell said Manafort paid him through international wire transfers. He said he had two or three other clients who did the same.

    Maxwell also said he sometimes dealt with Richard Gates, Manafort’s deputy, on billing issues for Manafort, but that he had never met Gates.
    Manafort, he said, was always the client. That is a blow to defense attorneys assertion that Gates, rather than Manafort, is to blame for the fraud, as it shows Manafort was spending his own money.

    And like two other vendors, Maxwell testified that before trial he had been shown a fake invoice from his company to Global Endeavour Inc., a Cypriot entity Manafort had used to pay some of his bills.

    It’s “kind of” an invoice from Big Picture Solutions, Maxwell said. But it wrongly described the business as an LLC, the address was wrong, and there was none of the detail that their invoices typically include on what services were provided. Global Endeavour Inc., Maxwell said, was not a client of his.

    Prosecutors have yet to explain the meaning of these false invoices to jurors.

    11:11 a.m.: Manafort had bed of flowers in the shape of an ‘M’ at Hamptons home

    The prosecution has called a parade of vendors to try to establish Paul Manafort’s extravagant spending habits and that he paid for the luxury items from offshore accounts, mainly in Cyprus. But few have offered detail of just how lavish was that lifestyle was as a landscaper called Thursday morning.

    Interesting detail: Paul Manafort had a bed of red flowers in the shape of an 'M' on his Hamptons property, landscaper testifies. Spent tens of thousands to landscape lavish property.

    — justin jouvenal (@jjouvenal) August 2, 2018

    Michael Regolizio, the owner of New Leaf Landscaping in the Hamptons, testified that he performed hundreds of thousands of dollars worth of work on one of Manafort’s homes in Bridgehampton, N.Y., over seven years.

    Regolizio told the jury that he maintained 14-foot hedges around the roughly 1-acre property, lawns, a waterfall, flower-lined tennis courts, a bed of “hundreds and hundreds” of white flowers and another which had red flowers in the shape of the letter “M,” presumably for Manafort.

    “There was a crew on that property four or five times a week easily,” Regolizio testified.

    As Regolizio talked at length about the many flowers he planted and maintained on Manafort’s property, prosecutor Brandon Van Grack cut him off, saying jurors had heard enough.

    “I like to talk about my work,” Regolizio said, smiling.

    Regolizio told the jury most of his customers paid by credit card, but Manafort paid with wire transfers. He said only one other of his clients paid with wire transfers and those transfers were from within the United States. Manafort spent a total of about $450,000 on the landscaping and the money originated from accounts in Cyprus.

    Regolizio also testified about what he agreed was a “fake invoice” from his company.

    The document did not have the full name, logo and address and the seal was faint, he testified. Prosecutors have asked several witnesses to testify about apparently fake invoices, though the significance is not yet clear.

    Up next is Heather Washkuhn, who worked as Manafort’s bookkeeper.

    11:59 a.m.: Judge confirms lawfulness of special counsel’s appointment

    With Manafort’s trial pressing forward, a federal judge in D.C. on Thursday affirmed the legal legitimacy of Special Counsel Robert S. Mueller III’s appointment.

    In a 93-page opinion, Judge Beryl A. Howell wrote that Mueller’s power “falls well within the boundaries the Constitution permits,” because he was supervised by an official who was himself accountable to the president. She wrote that “multiple statutes” authorized Mueller’s appointment, and Deputy Attorney General Rod J. Rosenstein, who named him to the post, “had power to do so.”

    The opinion came in response to a legal challenge from a witness who was arguing he could not be compelled to testify before a grand jury. The witness argued that Mueller wielded too much power and was appointed unlawfully. In the witness’s view, Mueller should have been nominated by the president and confirmed by the Senate, and there was no statute giving Rosenstein the authority to appoint him.

    The witness was not named, though his attorney told The Post’s Manuel Roig-Franzia it was Andrew Miller, an associate of political operative and Trump adviser Roger Stone.

    The ruling from Howell won’t have any direct bearing on Manafort’s case. Manafort himself had sought to challenge Mueller’s authority in the case against him in D.C. — though he abandoned part of that, and a judge rejected his request to stop Mueller from bringing charges against him in the future. Judge T.S. Ellis III also earlier rejected an effort by Manafort to get the charges against him in Virginia thrown out.

    12:05 p.m.: Prosecutors provide details on more spending

    After a parade of witnesses testified about Paul Manafort’s flamboyant spending and tendency to pay with international wire transfers, prosecutors entered several pieces of evidence to bolster those accounts.

    Prosecutors told jurors that companies in Cyprus paid a $300,000 down payment on a townhouse in Brooklyn; $503,500 to Scott L. Wilson Landscaping & Tree Specialists for work on Manafort’s Hamptons home; $20,339 to Sensoryphile, Inc. for a video and karaoke system at the same house; and about $430,000 to Sabatello Construction renovate his home in Palm Beach, Fla. Defense attorneys did not contest that evidence.

    The defense also agreed that Manafort and his wife paid $2.85 million for a condo in Manhattan’s Chinatown through the U.S.-based company MC Soho Holdings, LLC.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  9. #9

    Re: A Chronicle of our Descent to Hades

    These are all the jackets. I don't know TATeurs. Some of this stuff looks really cheap. Why would a man his size want plaid suits?

    The jackets prosecutors say Paul Manafort purchased from luxury clothing stores. (Courtesy of the Special Counsel’s Office/Reuters).
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  10. #10

    Re: A Chronicle of our Descent to Hades

    Day 3 Part 3

    12:36 p.m: Bookkeeper testifies she did not know of Manafort’s offshore accounts

    The vendors ended their testimony about Manafort’s lavish spending and the prosecution shifted to the heart of its case by putting Manafort’s bookkeeper on the stand to detail his finances.

    Critical testimony from Paul Manafort's bookkeeper: She said she had no record and was not aware of him having bank accounts outside the United States.

    — justin jouvenal (@jjouvenal) August 2, 2018

    Heather Washkuhn, managing director at California-based Nigro Karlin Segal Feldstein & Bolno, testified she had access to Manafort’s personal and business bank accounts, managed his spending and also oversaw a series of his properties he owned, including a horse farm in Virginia, condos in New York City and a property in Florida.

    Washkuhn described Manafort as an engaged client in the seven years she worked with him, from 2011 to 2018.

    “He was very knowledgeable,” Washkuhn told the jury. “He was very detail oriented. He approved every penny of everything we paid.”

    The testimony is important because Manafort’s defense team hopes to rebut allegations of Manafort’s financial wrongdoing by portraying him as the victim of his partner in his political consulting firm. One of Manafort’s attorneys argued in his opening statement that Richard Gates controlled Manafort’s business finances and manipulated his boss to line his own pockets. He portrayed Manafort as so busy with his political consulting work in the Ukraine and elsewhere he didn’t have time to manage his business affairs.

    Washkuhn testified she prepared ledgers each year of Manafort’s financial activities, which she then handed off to his accountants to prepare his tax returns each year. Washkuhn told the jury she sometimes saw activity in those accounts from other accounts she did not have access to. She would request documents from Manafort on those accounts, but only get them “sometimes.”

    Critically, Washkuhn also testified she was unaware of and did not have any records of foreign holdings or accounts controlled by Manafort. That’s important because prosecutors allege Manafort hid income in accounts offshore in places such as Cyprus and used them to make loans to himself and pay vendors as a tax avoidance scheme.

    12:41 p.m.: Trial breaks for lunch, two more hours of bookkeeper testimony expected

    Heather Washkuhn, who prepared ledgers of Manafort’s finances, testified that she was specifically unaware that Manfort controlled firms in Cyprus that loaned him money or gave him payments, including a 2011 $2 million loan from Yiakora Ventures. She said she would have asked for documentation on that kind of loan but did not recall getting it.

    Likewise, she said she did not know Manafort to control Leviathan Advisors, which paid him and his wife over $2 million that same year.

    Before breaking for lunch, Judge T.S. Ellis III asked prosecutor Greg Andres how much longer he expected Washkuhn’s testimony to take. Andres estimated another two hours.

    Ellis asked him to try to trim that a bit, and Andres replied that he would. But he noted that Washkuhn’s testimony was at the heart of the prosecution’s case.

    “Ms. Washkuhn plays a relevant role in the bank fraud,” as well as the alleged tax fraud, Andres said. “Not to say she was involved, she wasn’t.” But, he said, she had key knowledge.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  11. #11

    Re: The Manafort Trial

    Day 3 Part 4 (Summary)

    Manafort’s bookkeeper testifies against him, alleging efforts to inflate income

    By Rachel Weiner, Justin Jouvenal and Devlin Barrett
    August 2 at 7:08 PM

    Paul Manafort’s former bookkeeper, Heather Washkuhn, enters the federal courthouse in Alexandria, Va., on Aug. 2, 2018, to testify at Manafort’s trial in U.S. District Court on charges of tax evasion and bank fraud. Washkuhn testified that Manafort kept her in the dark about the foreign bank accounts he was using to pay for millions of dollars worth of luxury items and personal expenses. (Win McNamee/Getty Images)

    Paul Manafort’s longtime bookkeeper testified against him Thursday, telling a Virginia jury that his seven-figure lifestyle lasted until about 2015 when the cash ran out, the bills piled up and he and his business partner began trying to fudge numbers to secure loans.

    The dry but potentially damaging testimony from the bookkeeper, Heather Washkuhn, appeared to undercut Manafort’s defense against bank and tax charges, which is that his business partner is responsible for any financial misdeeds. But Washkuhn testified that Manafort approved “every penny.”

    Washkuhn spent hours on the witness stand, describing account balances, bills received and payments. Her testimony is critical to the case being heard by a six-man, six-woman jury in Alexandria, Va., as Manafort, who was then-candidate Donald Trump’s campaign chairman for a period in 2016, is charged with running a years-long scheme to hide millions of dollars from the Internal Revenue Service, and then, when his income dried up, lying to get bank loans so he could continue living the good life.

    Washkuhn characterized Manafort as a “very knowledgeable” client. “He was very detail-oriented. He approved every penny of everything we paid,” she said.

    That point could prove vital in jury deliberations because Manafort’s lawyers have made clear they aim to place blame on the case’s star witness, former Manafort right-hand man Rick Gates, portraying Gates as a liar and embezzler who is responsible for any financial chicanery the FBI uncovered.

    On the witness stand, Washkuhn said she prepared ledgers for Manafort’s finances, which she would eventually hand off to his accountants to file his tax returns. She said she sometimes saw transactions in those accounts from other accounts to which she did not have access.

    Critically, Washkuhn testified that she did not have any records of foreign accounts controlled by Manafort and had not been aware of such accounts. Prosecutors have introduced evidence that Manafort used foreign accounts to pay millions of dollars for clothes, cars, real estate and home remodeling.

    Prosecutors allege that Manafort made $60 million between 2010 and 2014 while working for various interests in Ukraine and used foreign accounts to hide millions of dollars from the IRS.

    Washkuhn said Manafort’s consulting firm, Davis Manafort Partners, took in millions of dollars a year before its revenue cratered in 2015. The firm reported only $338,542 in income in 2015 and a $1.2 million loss in 2016.

    Prosecutors say that is because Manafort’s biggest client — what one associate called his “golden goose,” Ukrainian President Viktor Yanukovych — fled for Russia in 2014 amid massive protests against his government.

    As his business was gasping, Manafort was tapped to run Trump’s campaign in mid-2016. He received no pay for the job, even though his firm was losing hundreds of thousands of dollars a month, according to election filings and evidence presented to the jury.

    Trying to pay Manafort’s bills became a problem, Washkuhn testified, and he needed more than $1.1 million to pay off credit cards and other expenses.

    “$120K is urgently needed for your personal bills,” Washkuhn wrote to Manafort in one email presented in court. Manafort’s company also was struggling to pay its bills. In an email to Gates in April 2016, Washkuhn warned that the firm’s health insurance was going to be canceled because the bill had not been paid.

    Washkuhn’s testimony is important not just for the tax charges against Manafort but also for the bank-fraud counts as well.

    Prosecutors allege that Manafort engaged in a scheme to doctor documents submitted to banks, wildly overstating his firm’s 2015 revenue.

    After being shown paperwork submitted to two banks indicating Davis Manafort Partners made $4.5 million that year, Washkuhn testified that was “four million more than what was reported on the documents that we created.”

    Prosecutors allege that Gates altered the document before it was sent to banks, and they showed jurors messages they said detailed an effort to inflate income.

    According to the messages, early in the morning of March 16, 2016, Gates asked Washkuhn to send him a Microsoft Word document version of the previous year’s financial records, rather than a scanned PDF. Word documents can be edited; scanned PDFs cannot be so easily changed. Washkuhn replied to Gates that she could not comply with his request.

    After a back-and-forth, Gates then asked her to add $2.6 million in “accrued revenue” for 2015, something he said in a previous email Manafort had requested. She said she could not because the firm operates on a cash basis, recording money when it comes in rather than when it is earned.

    Gates then emailed another employee at the bookkeeping firm, Laura Tanner, and, “per email with Heather,” told her to add the $2.6 million to the 2015 income.

    It is unclear what Tanner did. But prosecutors showed jurors an attachment Gates sent to Banc of California. “It is similar in some respects” to the Davis Manafort Partners financial statement prepared by the bookkeeping firm, Washkuhn testified, but she said the disclaimer was missing, the font was different, and “the numbers are different.”

    Manafort’s lawyer Thomas Zehnle tried to show that Gates played an important part in any financial misdeeds, getting Washkuhn to concede that Gates had authority to direct wire transfers from overseas.

    Gates “handled a lot of the business affairs,” Washkuhn said.

    But later, the line of questioning seemed to backfire on the defense. In response to questioning, Washkuhn said Manafort kept a tight grip on financial decisions for the firm and himself.

    “He approved every expenditure on the personal and business side,” Washkuhn said.

    Before the bookkeeper’s testimony, jurors heard more details of Manafort’s expensive tastes.

    The owner of a landscaping company in the Hamptons testified that he charged Manafort about $450,000 for landscaping over the years, to maintain the grounds of a one-acre property in Bridgehampton. The lawn featured red flowers in the shape of the letter “M.”

    Manafort also spent $20,339 for a video and karaoke system at that house, but that cost was dwarfed by his bills for television and home entertainment systems for his homes on the East Coast, which totaled more than $2.2 million, according to a witness, Joel Maxwell, who said the work was paid for with wire transfers from foreign financial accounts.

    On Wednesday, witnesses testified that Manafort spent more than $1 million on business suits and luxury clothes over five years.

    The testimony about Manafort’s high-priced purchases has angered the trial judge, T.S. Ellis III, who said Thursday morning that he would not let prosecutors “gild the lily” by asking witnesses to explain in detail Manafort’s spending.

    “All the evidence of the fancy suits really is irrelevant and besmirches the defendant,” Ellis said. “It engenders some resentment.”

    Prosecutors had filed a motion in the morning asking to be given more leeway in explaining Manafort’s purchases, arguing that doing so was essential to showing the jury evidence that the foreign accounts used to pay for those luxury items were under Manafort’s control. They also said they needed to show Manafort’s profligacy to explain why he would resort to bank fraud when his business foundered.

    Although he has been tough on prosecutors at the trial, the judge has been pleasant to the jurors, giving them permission to take a cake to the jury room Friday for what apparently is the birthday of a juror.

    Prosecutors also said Gates, the key witness in the case, could testify as early as Friday.

    Gates pleaded guilty this year to lying to the FBI and conspiring against the United States, and he agreed to cooperate against his former boss and partner in hopes of receiving a lighter sentence.

    Matt Zapotosky contributed to this report.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  12. #12

    Re: The Manafort Trial

    Day 4 Part 1

    9:24 A.M
    .: Prosecutors: We’re going to need to use charts
    The special counsel’s office on Friday morning told a federal judge they intend to use “summary charts” to help explain their complicated case against Paul Manafort.

    The brief request lays out the breadth of investigative work the special counsel conducted in investigating Manafort. Prosecutors wrote that an FBI forensic accountant reviewed “tens of thousands of documents containing thousands of entries, from approximately 20 financial institutions and 35 companies” to make the charts, which prosecutors said summarize Manafort’s purchases and payments from foreign and U.S. bank accounts.

    They said they are alleging that Manafort controlled “17 domestic entities, 12 Cypriot entities, and three other foreign entities, and he “caused over 200 wires to be sent from those entities to domestic bank accounts, entities, or vendors.”

    Judge T.S. Ellis III still has to approve the request. Prosecutors wrote that this was the “prototypical” case to do so because of its complexity.

    9:46 A.M.: Special counsel attorney gets guilty plea (no, it’s not Paul Manafort)

    An attorney for the special counsel’s office appeared in court early Friday as part of a hearing on a guilty plea. But no, it wasn’t Paul Manafort.

    Assistant U.S. Attorney Uzo Asonye, one of the lawyer’s prosecuting Manafort, is working an unrelated case at the same time. Asonye was there to hear a guilty plea from a contractor, who admitted to falsifying tests on the D.C. area’s Metro’s Silver Line project.

    “Doing double duty, Mr. Asonye,” Judge T.S. Ellis III joked at the outset. Later he asked if Asonye was familiar with a recent Supreme Court ruling on restitution.

    Asonye, whom Ellis has chided and interrupted throughout the Manafort trial, responded, “I’m always available to be educated by the court.”

    10:14 A.M.: Trial resumes with Manafort’s tax preparer taking the stand
    Jurors returned to the courtroom just after 9:45 a.m. to hear more testimony from Philip Ayliff, Paul Manafort’s tax documents preparer.

    After establishing Ayliff’s long relationship with Manafort – the tax preparer said he began working for Manafort in in 1997, and met with him 30 times over the two decades since – Assistant U.S. Attorney Uzo Asonye drilled into what Ayliff knew about Manafort’s business partner, Rick Gates. Ayliff said Gates was “working closely with Mr. Manafort,” and was Manafort’s “right hand” adviser.

    Who was in charge, Asonye asked.

    “Oh!” Ayliff exclaimed, then added decisively, “Mr. Manafort.”

    That is important because defense attorneys have sought to cast Manafort as a dupe of Gates. Ayliff seemed to cast doubt on that idea. He said he never saw Gates confront Manafort, or vice versa. Nor, he said, did Gates ever tell him to hide anything from Manafort. He said the two men often conducted calls together where he would discuss their taxes.

    10:46 A.M: With accountant, prosecutors get into the meat of tax crimes

    Prosecutors have now gotten to the nitty-gritty details of Paul Manafort’s alleged tax fraud, going through business and personal returns from 2010 to 2014 with one of his former accountants.

    Jurors saw each year’s returns for both Manafort’s consulting firm, Davis, Manafort Partners Inc. (later DMP International) and the personal returns for Manafort and his wife, Kathleen.

    For each of those years, even as the firm reported large receipts, the firm’s reported profits were a fraction of that amount because of high business expenses.

    Prosecutors allege Manafort lowered his tax burden by disguising some income as loans, and highlighted one such loan from 2012 — $1.5 million from one of the Cyprus companies the government says he controlled, Peranova Holdings Limited. On Wednesday Manafort’s bookkeeper Heather Washkuhn testified that his deputy Rick Gates told her in 2016 the loan had been forgiven and should be treated as income on his 2015 returns. That was done, prosecutors say, to inflate Manafort’s income so he could get an actual loan.

    Still, in the years he was working in Ukraine, Manafort reported making quite a healthy income. On his individual returns, in 2010 Manafort reported $504,744 in income in 2010.

    In 2011, it was $3,071,409. In 2012, $5,361,007. In 2013, $1,910,928, and in 2014, $2,984,210. But, accountant Philip Ayliff testified, Manafort reported having no foreign bank accounts — which is where prosecutors say the defendant was stashing many millions more from Ukraine.

    Ayliff is the first witness that Kevin Downing, Manafort’s lead attorney, plans to cross-examine.

    Judge Ellis has been a bit softer on prosecutors now that they are delving into the true heart of the case. But he continued to interrupt. When Assistant U.S. Attorney Uzo Asonye asked if Ayliff had any role in Manafort’s gift tax returns, Ellis interjected, “The correct question would be, did you have any role in mailing them?”

    Manafort's Tax Returns

    11:12 A.M.: Tax preparer: Manafort did not report foreign accounts containing millions

    In early testimony Friday, the prosecution sought to highlight how Paul Manafort repeatedly denied having foreign banks accounts – even though previous witnesses have testified he used foreign accounts to fund his lavish lifestyle.

    With tax documents preparer Philip Ayliff still on the stand, Assistant U.S. Attorney Uzo Asonye flashed for jurors each of Manafort’s tax returns from 2010 to 2014. As jurors peered down at the monitors in front of them in the jury box, Asonye asked Ayliff what Manafort had reported about whether he had any foreign bank accounts.

    “None,” Ayliff said, repeating the exercise five times.

    Asonye then turned to emails between Manafort, business partner Rick Gates and their tax documents preparer, attempting to show it wasn’t just on the returns themselves that Manafort had claimed not to have foreign accounts. One 2011 email showed Ayliff writing to Manafort, asking if he had any interest in a foreign bank account. Manafort responded he did not.

    The testimony is important because Manafort is charged with, among other things, failing to report foreign bank accounts as he was legally required to do. Prosecutors must show Manafort’s failing to do so was no mere mistake.

    Other emails showed the tax documents preparer inquiring about transactions that involving foreign accounts. In August 2009, for example, he wrote Manafort inquiring about a $1 million transaction that come from Deutche Bank to L O A V Advisors Limited. Jurors saw similar inquiries directed to Gates. The tax documents preparer said his firm relied on the representation of Gates, Manafort and their books, and the men never told him of accounts or tax information from Cyprus. Jurors already have heard that Manafort made payments from accounts in that country.

    Ayliff said that some of the foreign companies Manafort is alleged to control were clients of his accounting firm but that he was unaware that Manafort himself had anything to do with them.

    “They never told us about any income that was deposited in foreign accounts,” he said.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  13. #13

    Re: The Manafort Trial

    Day 4 Part 2

    12:30 P.M.: Tax prepaper delves into suspicious loan

    Accountant Philip Ayliff testified that his firm asked Paul Manafort and Rick Gates for documentation of $1.5 million loan from Peranova Holdings in 2012 and got none.

    “There normally wasn’t a response,” when the accounting firm, Kositzka Wicks & Company, asked about loans to Manafort’s consulting firm, Ayliff said. “They just said it was a loan.”

    It was Rick Gates, Manafort’s deputy, who told the firm in a conference call that $1.5 million should be classified as a loan, Ayliff testified.

    “We’d never heard of Peranova Holdings,” Ayliff testified. “We thought it was an independent third party.”

    In fact, prosecutors have shown evidence Manafort used Peranova, based in Cyprus, to pay his personal expenses.

    Had Ayliff known the $1.5 million was payment for work in Ukraine, the accountant said, on Manafort’s taxes “it would have been income.” Ayliff also said “if they had control over” Peranova, that would also have affected the tax return reporting.

    Ayliff said the accountants also asked about the loan in subsequent years, because there were no payments towards it. “We would ask, ‘What’s the status of the loan, is it still outstanding?'” They were told it was.
    He said no one at the firm told Manafort or Gates to treat loans as income to lower their tax burden.

    Ayliff also testified that Manafort’s spending on suits, home improvement, landscaping, and property should have been classified as personal rather than business expenses.

    12:53 P.M.: Tax preparer discusses Manafort's rental properties

    The prosecution finished its questioning of tax documents preparer Philip Ayliff by asking about properties Paul Manafort claimed as rentals on his taxes. That evidence is important because, in seeking to get loans, Manafort attempted to claim these properties were for personal use, which could be evidence of bank fraud.

    Assistant U.S. Attorney Uzo Asonye showed jurors an email Manafort sent to Ayliff telling him the bank UBS was raising questions as he attempted to get a loan. Particularly, Manafort told his tax documents preparer, the bank was asking about documents that appeared to show a property on Fifth Avenue in New York, was a rental, when Manafort claimed it was personal.

    “It was my understanding it was a rental,” Ayliff testified. “It had always been a rental.”

    Asonye showed jurors emails that Manafort had treated a property on Howard Street was used as a rental in 2015 – even though he would claim otherwise in trying to seek a loan. Tax returns show Manafort claimed to have made $115,000 in rental income that year from the property, and he claimed depreciation to reduce his tax obligation.

    12:58 P.M.: Attorney: Paul Manafort would not have left evidence ‘around’ if he was trying to break law

    During a break, Paul Manafort’s lead attorney Kevin Downing offered a bit of Manafort’s defense on charges of failure to report foreign banks accounts. Essentially, he argued that if Manafort had known he was doing something illegal, he wouldn’t have been so easy to catch.

    “Nobody intending to violate the law would leave the evidence around for his accountant to find it,” Downing said in court.

    Judge T.S. Ellis III made the same point, summarizing the defense as, “There’s a trail in these documents that would lead to the truth, and somebody who violated the law wouldn’t have done that.”

    The trial is on lunch break until 1:30 p.m.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  14. #14

    Re: The Manafort Trial

    Day 4 Part 2

    1:53 p.m. Judge gets combative with prosecutors again

    As he has been throughout the trial, Judge T.S. Ellis III was notably combative with prosecutors Friday.

    More than once the judge, slouching forward in a roller chair pivoted slightly to one side, critiqued the questions asked by Assistant U.S. Attorney Uzo Asonye. When Asonye asked Paul Manafort’s tax documents preparer, for example, about the accounting methods generally used to prepare tax returns, Ellis told him to make the inquiry more specific.

    “Why don’t you ask him on what basis he prepares them on?” Ellis said.

    Another time, as Asonye asked broadly about the accountant’s role in putting together Manafort’s tax return, Ellis cut him off. Of course, the judge said, Philip Ayliff was involved in putting together the tax return. Asonye was trying to highlight that Manafort, though, was the one to sign and mail in the document.

    “The correct question would be, ‘Did you have any role in mailing it in?’” Ellis said.

    Prosecutors have mostly kept their composure in responding to Ellis’s jabs, though the judgeseemed to get under their skin at least once on Friday. The flare-up came when Asonye tried to enter a piece of evidence that was described inaccurately on the list of exhibits Ellis had been given.

    “May we approach,” Asonye asked, saying he could clear up the confusion.

    “Is it a mistake?” the judge shot back, glowering at the attorney. When Asonye responded with only silence, Ellis relented. “All right. Yes. You can,” he said.

    In a huddle next to Ellis’s bench, another prosecutor, Greg Andres, stood close to the judge and gestured emphatically with one of his hands. Though white noise in the courtroom made the conversation impossible to hear, Andres seemed to be speaking animatedly. Ellis soon returned to the bench and told jurors not to worry too much about the episode.

    “It’s not a big deal,” he said. “It’s no big mistake.” He explained that there “may be an error in the description” of the item that they would soon to be shown.

    “These things happen,” Ellis said. Asonye soon resumed questioning the tax documents preparer.

    2:09 p.m. Lead defense attorney speaks before jury for first time

    Lead defense attorney Kevin Downing’s cross-examination of Philip Ayliff is his first time speaking before the jury in this case. He did not get through his first question before a member of the special counsel shot up with an objection.
    Downing started by saying he would be going slowly, because “when we talk about these tax and accounting issues, I look over at the jury –”

    Assistant U.S. Attorney Uzo Asonye cut him off, objecting to that characterization.

    Downing is of course very familiar with tax and accounting issues; he spent 15 years in the DOJ’s tax division and was actually behind an effort Ayliff described earlier to crack down on unreported foreign bank accounts.

    Here, defending Manafort, he asked whether those reporting requirements are sometimes hard to understand.

    He asked Ayliff, Manafort’s former accountant, whether “tt was a lot more complicated than determining whether there was signature control” over a foreign bank account.

    Ayliff agreed, saying he was a “generalist” but sometimes roped in other accountants at the firm who specialized in foreign tax issues when dealing with Manafort.

    The emails Downing used to make his point, which were entered into evidence by the government, focus on one foreign telecommunications firm in which Manafort was invested but did not have signature authority. The accountants determined that his investment was not large enough to trigger reporting of a foreign bank account.

    However, prosecutors are alleging Manafort had total control over dozens of foreign accounts.

    Still, Manafort’s attorney again attempted to shift responsibility to Gates.

    “Were you backed up year in and year out against filing deadlines?” Downey asked.

    “Yes,” Ayliff said. “Did you have difficulty getting information?” Downey asked. “Yes,” Ayliff said. “Primarily that information was provided by Mr. Gates, is that correct?” Downey asked. “Yes,” Ayliff said.

    Downey displayed a financial document, atop which sat large block letters proclaiming “This is a loan … per Rick Gates call.”

    2:36 p.m.: Prosecutors call first witness to testify under immunity agreement

    Prosecutors called as their 14th witness Cindy Laporta – another of Manafort’s accountants. She is the first person to testify under an immunity agreement with the special counsel to prevent her from facing possible legal exposure about what she might say.

    Laporta signed Manafort’s tax returns in 2014 and 2015, taking over for Philip Ayliff when he retired from their firm. With her early testimony, prosecutors sought to show jurors that Manafort – rather than Laporta, his bookkeeper or business partner Rick Gates – were responsible for inaccuracies in his tax documents, and Manafort knew that.

    Laporta said her firm gave Manafort a letter making clear they were not “auditing or verifying” the information clients provided – and while they offered that service, Manafort used the firm only to prepare his returns. She said she gathered information from Manafort, Gates and his bookkeeper, and “Mr. Manafort approved that.”

    Laporta testified she viewed Gates as Manafort’s “assistant.”

    Asked by Assistant U.S. Attorney Uzo Asonye who was in charge, she said, “Mr. Manafort,” though she noted Gates often gave her information.

    That assertion might have been helpful to the defense, which has sought to cast blame for financial irregularities on Gates.

    To rebut that, prosecutors showed Laporta a September 2015 email of Manafort forwarding Gates tax documents, which Gates forwarded on to her. She testified that was typical of how she would get Manafort’s tax documents.

    A total of five witnesses have been granted immunity to testify at Manafort’s trial.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

  15. #15

    Re: The Manafort Trial

    Day 4 Part 3

    2:47 p.m.: Despite the stakes, Manafort still looks relaxed

    Paul Manafort wore a blue suit, blue shirt and purple tie to court Friday, and chatted amiably with his attorneys upon entering.

    He has looked engaged throughout the proceedings – sometimes taking notes, sometimes looking at the attorneys or the witnesses and sometimes folding his hands in front of his face, staring straight ahead. Once on Thursday, he even corrected his own attorney when the attorney told the judge the wrong exhibit number.

    “257,” Manafort told the attorney.

    Even as testimony has turned to complicated tax matters, jurors have also appeared engaged. Several are taking voluminous notes in black writer’s notebooks, and virtually all look at the monitors in front of them as prosecutors and defense attorneys zoom in on particular sections of documents they are seeking to highlight.

    The courtroom – a mere seven rows of wooden benches underneath half-orb lights hung from the ceiling by gold posts — is almost completely full. Journalists are crammed shoulder to shoulder with courthouse observers.

    2:59 p.m. Another accountant says Manafort kept tax preparers in the dark

    Cindy Laporta, like accountant Philip Ayliff before her, said Paul Manafort never told her about control over foreign companies and bank accounts or about any accountants and tax preparers he had in Cyprus.

    Asked if she and Ayliff would have wanted to know that information, Laporta confirmed that they would: “We would always want to know the full picture.”

    As he did with Ayliff, prosecutor Uzo Asonye went through a list of over a dozen foreign companies and asked if she knew Manafort controlled them; she said no. When those companies showed up on his tax returns, she said, they appeared as Manafort’s foreign clients — because that’s what bookkeeper Heather Washkuhn recorded them as.

    Asonye showed one email from Oct. 4, 2016 in which Laporta asks Manafort specifically whether he had foreign accounts; the answer was “NONE.”

    Laporta said had she known Manafort had control of the foreign companies and bank accounts, “That would require reporting.” She too said the accounting firm put more emphasis on foreign bank account reporting around 2012 when the Department of Justice began cracking down on them. It was mentioned in the firm’s annual engagement letters, she said, and they made sure to ask about it annually rather than simply ask whether anything had changed from the previous year.

    3:17 p.m.: Accountant testifies she didn’t believe Manafort on loans

    As the afternoon waned, prosecutor Uzo Asonye began pressing Manafort’s former accountant Cindy Laporta to detail financial arrangements that prosecutors allege *Manafort and his business partner, Rick Gates, used to evade paying taxes, including classifying income from foreign companies as “loans” to themselves.

    Laporta testified that she was suspicious of the loans, many of which were thinly documented.

    “Did you have concerns about representation you received about these foreign loans?” Asonye asked.

    “Yes,” she said.

    “Did you believe the representations about these foreign loans?”

    “No,” she said.

    3:42 p.m. Accountant testifies Rick Gates asked her to modify Manafort loan to decrease taxes

    In remarkable testimony Friday afternoon, accountant Cindy Laporta described how Manafort’s business partner Rick Gates asked tax preparers during a call in 2015 to modify the amount of a loan so that Paul Manafort would have to pay less in taxes.

    The call occurred in September 2015, though it was somewhat unclear which loan ultimately got modified. Confronted with a possible tax bill, Gates “said it was too high,” and that his boss, Paul Manafort, “didn’t have that money,” Laporta testified.

    Assistant U.S. Attorney Uzo Asonye asked her what was proposed as a solution, and she responded “changing the amount of the loan.”

    “He was trying to reduce income and therefore, income taxes,” Laporta testified.

    Laporta testified such conduct was “inappropriate.”

    “You can’t pick and chose what’s a loan and what’s income,” she said.

    But prosecutors presented an email that showed a subordinate at her firm, Conor O’Brien, himself wrote,” The loan amount may need to be changed.”

    They ultimately decided on a $900,000 amount because “it resulted in a tax amount that Rick said could be paid,” Laporta testified.

    3:50 p.m. Accountant says she went along with alleged tax fraud because she was afraid to confront Manafort

    Back on the stand after a break, Cindy Laporta wasted no time in admitting it was “wrong” to agree to increase the amount of a loan on Paul Manafort’s 2014 tax returns just before submitting them in 2015. The purported $900,000 loan came from an entity in Cyprus called Telmar Investments, which according to prosecutors Manafort controlled.

    “I had a couple of choices at that point,” she said.

    She had just had a conference call with Rick Gates in which he said Manafort could not afford to pay his taxes and so they had to be reduced, possibly by inflating the value of that loan.

    “I could have refused to file the tax return,” which she said could lead to litigation with Manafort’s firm.

    “I could have called Mr. Manafort and Mr. Gates liars, but I did not want to do that either,” she said, because “Mr. Manafort was a long-time client of the firm.”

    “I could have called Mr. Manafort and Mr. Gates liars, but Mr. Manafort was a long-time client of the firm and I did not want to do that either,” she said.

    Asked if she regretted her actions, she agreed; “I very much regret it.” She said she was taking responsibility now.
    “No matter how cynical I get, I just can't keep up.” – Lily Tomlin.

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