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Mueller Files New Fraud Charges Against Paul Manafort Mueller Files New Fraud Charges Against Paul Manafort and Campaign Deputy
(about 3 hours later)
WASHINGTON — The special counsel unsealed new charges on Thursday against President Trump’s former campaign chairman, Paul Manafort, accusing him of hiding income and defrauding banks. WASHINGTON — Even as he was managing Donald J. Trump’s campaign for president, Paul Manafort lied to banks to secure millions of dollars in cash loans as part of a decade-long money laundering scheme, according to charges unsealed by the special counsel on Thursday.
Many of the charges are similar to ones he was charged with in October. According to the new 32-count indictment, Mr. Manafort provided false information about his income to banks when he applied for mortgages. Seven of the counts relate to Mr. Manafort’s failure to properly file reports on his foreign bank accounts. Mr. Manafort exaggerated his income by millions of dollars to take out mortgages on homes in SoHo and the Hamptons that he had purchased years earlier in part with income illegally funneled through offshore bank accounts, according to the indictment. The laundered money — which totaled $30 million — came from Mr. Manafort’s work as a lobbyist and political consultant to Viktor F. Yanukovych, the Russia-aligned former Ukrainian president.
The indictment also revealed similar charges against Mr. Manafort’s longtime business associate and campaign deputy, Rick Gates. He was indicted along with Mr. Manafort in October. But after Mr. Yanukovych was ousted in 2014 and fled to Russia, Mr. Manafort’s income quickly dwindled. The 32-count indictment describes a complex plot that Mr. Manafort then undertook to leverage money from his real estate with the help of his longtime business partner and campaign deputy, Rick Gates.
The new charges were expected. The original indictment did not explicitly bring tax charges, an omission that experts predicted that the special counsel, Robert S. Mueller III, would ultimately correct. The first indictment also relied heavily on accusations that Mr. Manafort violated foreign lobbying laws, which have not been used at trial. The new indictment gives prosecutors more options. The charges do not involve Mr. Trump or his campaign and are not significantly different from ones filed against the men in October. But they outline new criminal behavior and appear to be the latest attempt by the special counsel, Robert S. Mueller III, to pressure Mr. Manafort and Mr. Gates to cooperate with his inquiry to avoid a lengthy prison sentence. The men have said they have nothing to offer Mr. Mueller on the central question of the investigation: whether any associates of Mr. Trump coordinated with Russia’s attempts to disrupt the 2016 election.
The charges do not involve Mr. Trump or his campaign and involve accusations that predate either man’s involvement with the president. But the investigation has been an unwanted distraction for the White House. After Mr. Gates and Mr. Manafort were indicted, a former national security adviser and a foreign policy aide to Mr. Trump have pleaded guilty to lying to the F.B.I. about their Russian connections. And 13 Russian operatives were charged with trying to sow chaos in the presidential election and tip the vote toward Mr. Trump. Mr. Manafort and Mr. Gates have pleaded not guilty, and a spokesman for Mr. Manafort denied wrongdoing.
The indictment depicts a complex scheme by Mr. Manafort and Mr. Gates to shield tens of millions of dollars from American tax authorities by moving the funds through foreign bank accounts around the world: in Cyprus, the Seychelles, and Saint Vincent and the Grenadines. “Paul Manafort is innocent of the allegations set out in the newly filed indictments, and he is confident that he will be acquitted of all charges,” the spokesman, Jason Maloni, said in a statement. “The new allegations against Mr. Manafort, once again, have nothing to do with Russia and 2016 election interference/collusion.”
Mr. Manafort has also sued the Justice Department, claiming that Mr. Mueller’s previous indictment against him demonstrates how he has overstepped his authority by bringing charges unrelated to Russian election meddling. Mr. Gates’s lawyer, Thomas C. Green, who was hired in recent weeks, has refused to discuss the case.
The investigation has been an unwanted distraction for the White House. After Mr. Gates and Mr. Manafort were indicted, a former national security adviser and a foreign policy aide to Mr. Trump have pleaded guilty to lying to the F.B.I. about their Russian connections. And 13 Russian operatives were charged with trying to sow chaos in the presidential election and tip the vote toward Mr. Trump.
The court records paint an unflattering portrait of the man who ran Mr. Trump’s presidential campaign from June to August of 2016, as the candidate secured the Republican nomination and moved into the general election against Hillary Clinton. Prosecutors say he concealed years of lobbying for the pro-Russia government in Ukraine and never properly registered with the United States government for that work. In the process, they say, he laundered millions of dollars in proceeds and misled investigators about how he received those funds.
He and Mr. Gates shielded millions of dollars from American tax authorities, court papers show, by moving the funds through foreign bank accounts around the world: in Cyprus, the Seychelles, and Saint Vincent and the Grenadines.
“Manafort and Gates hid the existence and ownership of the foreign companies and bank accounts, falsely and repeatedly reporting to their tax preparers and to the United States that they had no foreign bank accounts,” the indictment said.“Manafort and Gates hid the existence and ownership of the foreign companies and bank accounts, falsely and repeatedly reporting to their tax preparers and to the United States that they had no foreign bank accounts,” the indictment said.
The authorities allege that Mr. Manafort and Mr. Gates disguised more than $10 million of their own money as loans to move the funds into the United States. At least $1.5 million was used to buy real estate for Mr. Manafort on Howard Street in SoHo, according to the documents. Two of the largest loans totaled $16 million and were made by one bank. The bank is not identified in the indictment, but the description fits what The New York Times reported last year about loans to a company connected to Mr. Manafort called Summerbreeze L.L.C., which borrowed millions from Federal Savings Bank of Chicago, headed by Stephen M. Calk, an economic adviser to Mr. Trump at the time.
A lawyer for Mr. Manafort did not immediately respond to messages seeking comment. Mr. Manafort and Mr. Gates have pleaded not guilty. Mr. Manafort has also sued the Justice Department, claiming that Mr. Mueller’s appointment had overstepped his authority by bringing charges unrelated to Russian meddling in the presidential election. Mr. Manafort’s dealings with Federal Savings began in July 2016, when he was running Mr. Trump’s presidential campaign, and continued after he was ousted a month later. In each instance, according to the indictment, Mr. Manafort and Mr. Gates altered financial statements for their consulting business to make it easier for Mr. Manafort to qualify for mortgages.
The new indictment raises charges of bank fraud, which are new, as well as 16 charges of filing false tax returns. Prosecutors had previously accused Mr. Manafort and Mr. Gates of cheating on their taxes, but the new indictment turned each filing into an explicit charge. Mr. Mueller also appears to have obtained communications between Mr. Manafort and his son-in-law, Jeffrey Yohai, who ran a real estate investment business in Los Angeles in which Mr. Manafort had invested millions of dollars. The business went bankrupt, and Mr. Yohai himself fell under F.B.I. scrutiny.
The indictment was brought in a federal court in Alexandria, Va., prosecutors said, because the crime occurred there. Mr. Mueller said he did not have authority to bring the charge in Washington. The two men are now facing similar indictments in two federal courts, which raises the likelihood that Mr. Manafort’s case will be moved to Alexandria. In a message cited in the indictment, Mr. Manafort appears to ask Mr. Yohai to cooperate in a ruse to make it seem that he was living in a building owned by Mr. Manafort, thereby comporting with information Mr. Manafort had submitted on a mortgage application.
Mr. Manafort’s friends have said that Mr. Mueller’s indictment is an effort to pressure him into providing information about Mr. Trump and his campaign. If so, Thursday’s indictment adds to that pressure. But White House lawyers and Mr. Manafort’s associates have been adamant that he does not have any information that could hurt Mr. Trump. The original indictment did not explicitly bring tax charges, an omission that experts had predicted that Mr. Mueller would ultimately correct. The first indictment also relied heavily on accusations that Mr. Manafort violated foreign lobbying laws, which have rarely been used at trial. The new indictment gives prosecutors more options.
Court records paint an unflattering portrait of the man who ran the Trump campaign. Prosecutors say Mr. Manafort concealed years of lobbying for the pro-Russia government in Ukraine, laundered millions of dollars in proceeds and misled investigators about his foreign work. Unlike the original indictment, which was filed in Washington, the one unsealed on Thursday was brought in a federal court in Alexandria, Va. Prosecutors said they had filed the charges there because the crimes had occurred in the Eastern District of Virginia and Mr. Mueller did not have authority to bring them in Washington. The fact that the two men are now facing similar indictments in two federal courts means that Mr. Manafort’s case will probably be moved to Alexandria.
Mr. Manafort joined the campaign in March 2016 to ensure Mr. Trump had enough votes among delegates to the Republican National Convention to clinch the party’s nomination for president. He was elevated to campaign chairman in May, and after Mr. Trump’s first campaign manager, Corey Lewandowski, was removed in June, Mr. Manafort took control.
Days earlier, he had attended a meeting at Trump Tower with Russians who had promised incriminating information about Hillary Clinton. Mr. Manafort has maintained that he only briefly attended the meeting, which was arranged by Mr. Trump’s son-in-law, Donald Trump Jr.
But just two months later, questions arose about money Mr. Manafort had received from his work in Ukraine, and Mr. Manafort stepped aside. He remained in Mr. Trump’s orbit, often speaking with the candidate.