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Evidence Against Manafort Is ‘Overwhelming,’ Prosecutors Say Evidence Against Manafort Is ‘Overwhelming,’ Prosecutors Say
(about 3 hours later)
ALEXANDRIA, Va. — The evidence against Paul Manafort is “overwhelming,” a prosecutor told jurors during closing arguments in his fraud trial on Wednesday, saying that he hid more than $16 million in income and fraudulently obtained $20 million in bank loans even though, as a trained lawyer, “Mr. Manafort knew the law.”ALEXANDRIA, Va. — The evidence against Paul Manafort is “overwhelming,” a prosecutor told jurors during closing arguments in his fraud trial on Wednesday, saying that he hid more than $16 million in income and fraudulently obtained $20 million in bank loans even though, as a trained lawyer, “Mr. Manafort knew the law.”
The lead prosecutor, Greg D. Andres, described Mr. Manafort, President Trump’s former campaign chairman, as a bright and highly capable political consultant who was well versed in tax law and financial matters and fluent in terms like “write-offs” and “distribution” income. Mr. Manafort deliberately deceived his bookkeeper and tax accountants, Mr. Andres argued, so he could keep more of his income tax-free and then trick banks into loaning him millions when “he was going broke and he couldn’t pay his bills.” But in a response that drew prosecutors’ ire, lawyers for Mr. Manafort, once President Trump’s campaign chairman, hinted that the special counsel, Robert S. Mueller III, had charged Mr. Manafort to pressure him into cooperating with the inquiry into Russian influence over the 2016 presidential race.
In a dispassionate summation that lasted nearly two hours, Mr. Andres insisted that Mr. Manafort’s crimes could not be dismissed as mere oversights. He repeatedly showed the jury emails, tax returns or other financial documents that Mr. Manafort either personally wrote or signed. On the final day of the trial, the lead prosecutor, Greg D. Andres, cast Mr. Manafort as a bright and highly capable political consultant, steeped in tax law and financial matters and fluent in terms like “write-offs” and “distribution” income. “It wasn’t a clerical decision. It wasn’t ‘forgot to check a box,’” Mr. Andres said. “When you follow the trail of Mr. Manafort’s finances, it is littered with lies.”
“It wasn’t a clerical decision. It wasn’t ‘forgot to check a box,’” Mr. Andres said. “When you follow the trail of Mr. Manafort’s finances, it is littered with lies.” Over 12 days in court, the prosecution called 27 witnesses and offered 388 photographs, emails and other documents as evidence of a scheme by Mr. Manafort to finance a life of opulence through sustained and sprawling fraud. But in their closing statement, Mr. Manafort’s lawyers implied that the real issue was why he was in the courtroom to begin with.
Only after the special counsel took an interest in him, they argued, did bank executives and accountants begin to raise questions about irregularities in his financial records, tax returns or loan applications.
Investigators for the special counsel were “going through each piece of paper and finding anything that doesn’t match up to add to the weight of evidence against Mr. Manafort,” said Richard Westling, one of Mr. Manafort’s lawyers. Mr. Manafort was even charged, he said, with fraudulent statements in an application for a loan that was never granted.
“What would be the motivation?” Mr. Westling asked. “I’ll leave you to determine what was behind that.”
The dueling summations ended in a heated confrontation over whether Mr. Manafort’s lawyers had crossed a line in seeking to sow doubt about the prosecutors’ motivations. While the fraud charges against Mr. Manafort are not related to Mr. Mueller’s inquiry into Russian interference in 2016, as Mr. Trump’s former campaign chairman he might know about Moscow’s efforts to influence the campaign.
Without saying so directly, the defense lawyers made clear that Mr. Manafort was a Republican, telling jurors that he had worked on the presidential campaigns of Ronald Reagan, Bob Dole, Gerald R. Ford and George Bush. Though they did not mention Mr. Trump by name, they said that Mr. Manafort had no income in 2016 because he had volunteered for “a presidential campaign.”
After prosecutors protested, Judge T.S. Ellis III of the United States District Court in Alexandria instructed the jury to “ignore any argument about the Justice Department’s motive or lack of motive in bringing this prosecution.”
In a tacit acknowledgment that his criticism of prosecutors during the trial might influence the verdict, Judge Ellis also told the panel “not to construe any comments the court has made” as his opinions.
The trial is the first major courtroom test for Mr. Mueller’s team. The other Americans charged thus far by the special counsel have all pleaded guilty without going to trial. If he is found guilty, Mr. Manafort, 69, could spend the rest of his life behind bars. The most serious of 18 charges against him carry a maximum sentence of 30 years.
His wife, Kathleen, was in the courtroom on Wednesday to hear the closing arguments, as she has throughout the trial, but his two daughters were absent.
Defense lawyers sought throughout the trial to destroy the credibility of the prosecution’s star witness, the longtime Manafort protégé and Trump deputy campaign chairman Rick Gates, who had faced similar fraud charges and testified against Mr. Manafort to try to win lighter punishment. Mr. Gates, who pleaded guilty to lying to federal authorities and conspiracy to commit fraud, is hoping to avoid a prison term when he is sentenced.
Kevin Downing, one of Mr. Manafort’s lawyers, told the jurors on Wednesday that they should completely discount Mr. Gates as a witness, saying he was guilty of “multiple lifetimes of fraud.”
Prosecutors relied on Mr. Gates, Mr. Downing said, only because they were “so desperate” to catch Mr. Manafort. He added, “How he was able to get the deal he got, I have no idea.”
The defense argued that Mr. Gates was the only witness to testify that Mr. Manafort knowingly and willfully engaged in fraud to hide his income and deceive banks. In fact, they said, Mr. Manafort only misinterpreted or overlooked complex financial regulations, such as the requirement to report foreign bank accounts to federal authorities.
Mr. Andres acknowledged to the jury that Mr. Gates was a flawed witness. “We are not asking you to take Rick Gates’s testimony at face value,” he said. “We’re not asking you to like him either.” When Mr. Manafort enlisted Mr. Gates to help him execute a fraud scheme that spanned more than seven years, he said, “he didn’t choose a Boy Scout.”
But he also told the jury that it could convict Mr. Manafort on the basis of his own words, highlighting emails and documents that Mr. Manafort personally wrote or signed. “Ladies and gentlemen, the star witness in this case is the documents,” he said.
Even though the bank records, loan applications and emails were voluminous, he said, “Mr. Manafort’s scheme, when you break it down, was not that complicated.” Mr. Manafort deliberately deceived his bookkeeper and tax accountants, Mr. Andres argued, so he could evade taxes on $16.5 million in income and then trick banks into loaning him millions when “he was going broke and he couldn’t pay his bills.”
With the stroke of a pen, Mr. Andres argued, Mr. Manafort achieved financial magic, making mortgages and other debts disappear, turning a rental apartment into a second residence, changing a loan into income and back again, and disguising a near-bankrupt political consultancy into one whose income was “on the upswing.”With the stroke of a pen, Mr. Andres argued, Mr. Manafort achieved financial magic, making mortgages and other debts disappear, turning a rental apartment into a second residence, changing a loan into income and back again, and disguising a near-bankrupt political consultancy into one whose income was “on the upswing.”
The case is the first trial brought by the office of the special counsel, Robert S. Mueller III, who is investigating Russia’s election interference and whether any of Mr. Trump’s associates conspired with that effort as well as any other possible crimes he uncovers, including the allegations against Mr. Manafort. He repeatedly asked the jurors, who are to begin their deliberations Thursday morning, to rely on their common sense when confronting book after exhibit book of financial documents. “Ladies and gentlemen, a loan is not income. Income is not a loan. You don’t need to be a tax expert to understand that,” he said.
In their own summation, Mr. Manafort’s lawyers tried to sow doubts about why he was facing criminal charges, repeatedly noting that the office of the special counsel had mounted the investigation, not ordinary prosecutors. Investigators were “going through each piece of paper and finding anything that doesn’t match up to add to the weight of evidence against Mr. Manafort,” one of his lawyers, Richard Westling, told the jury. He told them to ask themselves why Mr. Manafort would pay an accounting firm $100,000 a year to pay his bills, but pay more than $15 million in personal expenses himself out of 31 foreign bank accounts in Cyprus and St. Vincent and the Grenadines. “The answer? He wanted to hide those accounts,” he said. “Use your common sense.”
If everyone who made a mistake on bank loan application was criminally charged, he said, courtrooms across the country would be overflowing with bank fraud cases. Although defense lawyers suggested that some of the signatures on Mr. Manafort’s foreign bank accounts appeared to be forged, Mr. Andres insisted that Mr. Manafort personally controlled the foreign bank accounts through which $60 million in income flowed between 2010 and 2014.
Mr. Manafort was even charged, he said, with committing fraud in an application for a loan that was never granted. “What would be the motivation?” Mr. Westling asked. “I’ll leave you to determine was behind that.” Some of Mr. Manafort’s lies, he said, were “nothing short of absurd.” For instance, he said, Mr. Manafort “reminded” his daughter and son-in-law that bank officials believed they were living in a SoHo apartment that was in fact a rental so that he could qualify for a better mortgage rate. “If you are living in a residence, do you need to be reminded?” he said.
He described Mr. Manafort as a highly respected political consultant who had worked on four presidential campaigns before Mr. Trump’s, naming Ronald Reagan, Bob Dole, Gerald R. Ford and George Bush. Mr. Manafort’s lawyer Kevin Downing said his client was being prosecuted over financial missteps that had confused even his own accountants. “Any idea that has been given to you by the Office of Special Counsel that this stuff is straightforward and simple is just not true,” he said. But Mr. Manafort’s lawyers argued that he was being singled out for discrepancies that typically might only lead to more questions from bank officials, or perhaps a tax audit. If every loan applicant who mischaracterized a rental apartment as a second residence was charged, Mr. Westling said, courthouses would be overflowing with defendants in bank fraud cases.
If he is found guilty, Mr. Manafort, 69, could spend the rest of his life behind bars. The most serious offenses carry a maximum penalty of 30 years in prison. His wife, Kathleen, was in the courtroom listening to the Wednesday’s closing arguments, as she has throughout the 12-day trial, but his two daughters were absent. Mr. Downing suggested that Mr. Manafort did not hide his income from tax authorities, but simply tried to defer it to pay later. “It goes on all the time,” Mr. Downing said.
Mr. Andres, the prosecutor, went to some pains to shore up the testimony of Rick Gates, Mr. Manafort’s former right-hand man. More than 10 other witnesses, plus dozens upon dozens of documents, backed up Mr. Gates’s account of how Mr. Manafort tricked banks and illegally concealed income, Mr. Andres said. “Ladies and gentlemen, the star witness in this case is the documents,” he said. He also said the prosecutors were oversimplifying complex issues that confused even Mr. Manafort’s own tax accountants, including in what cases he was required to declare that he had foreign bank accounts. “Any idea that has been given to you by the office of special counsel that this stuff is straightforward and simple is just not true,” Mr. Downing said.
He said in picking Mr. Gates as his assistant, he chose someone like himself to help him violate the law, and guided him in how to do so. “He didn’t choose a Boy Scout,” Mr. Andres said. He said the F.B.I. had known about Mr. Manafort’s foreign bank accounts as long ago as 2014, when the Ukrainian authorities sought the F.B.I.’s help in investigating payments from the previous government to Mr. Manafort’s firm. Yet Mr. Manafort only came under investigation more than two years later, he said, hinting that the special counsel’s office had an ulterior motive.
“We are not asking you to take Rick Gates’s testimony at face value,” he said. “We’re not asking you to like him either.” But he asked: Even if Mr. Gates had an extramarital affair 10 years ago, as he admitted on the stand, “does that make Mr. Manafort less guilty?”
Mr. Andres tried to simplify financial machinations that spanned seven years, saying “Mr. Manafort’s scheme, when you break it down, was not that complicated, but it was hidden.”
He repeatedly asked the jurors to rely on their common sense when analyzing the hundreds of exhibits presented by the government. “Ladies and gentlemen, a loan is not income. Income is not a loan. You don’t need to be a tax expert to understand that,” he said.
He also asked why Mr. Manafort would pay an accounting firm $100,000 a year to pay his bills, but pay more than $15 million of them himself out of foreign bank accounts. “The answer? He wanted to hide those accounts,” he said. “Use your common sense.”
Running through exhibits that he said documented Mr. Manafort’s falsehoods beyond doubt, Mr. Andres highlighted some lies as “nothing short of absurd.” For instance, he said, Mr. Manafort “reminded” his son and daughter-in-law that bank officials believed they were living in a SoHo apartment that was in fact a rental. “If you are living in a residence, do you need to be reminded?” he said.
The documents Mr. Andres highlighted for the jurors included: doctored profit and loan statements for his political consulting firm that showed $3 million to $4 million in annual income for years when the firm made little money or suffered losses and a delinquent American Express bill of more than $200,000 that Mr. Manafort blamed on Mr. Gates when it threatened his ability to get bank loans.
Even after Mr. Manafort lost his unpaid job as Trump campaign chairman in August 2016, he promoted his connection with the campaign, dangling the prospect of a cabinet post before the chairman of a Chicago bank from which he was seeking $16 million in loans, emails showed.
From 2010 to 2014, when he was swimming in cash from his Ukraine work, Mr. Andres told the jury, Mr. Manafort created more than 30 foreign bank accounts in the names of shell companies. Ukrainian oligarchs who had hired him to help a pro-Russian politician win the presidency funneled more than $60 million to those accounts. Mr. Manafort declared none of that income, prosecutors said, evading taxes on at least $16.5 million of it; the rest might fall into the category of business expenses.
Mr. Manafort’s lawyers presented no witnesses during the trial and focused much of their defense on attacking Mr. Gates.
Under cross-examination, Mr. Gates, 46, admitted that despite the fact that he had committed crimes for which he could have been sentenced to up to 100 years, he hoped that his cooperation with prosecutors would help him stay out of prison. He has yet to be sentenced for the two felonies to which he pleaded guilty in February — lying to federal prosecutors and conspiracy to commit bank fraud.