Democracy Dies in Darkness

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Paul Manafort’s tax- and bank-fraud case is heading to the jury

August 15, 2018 at 7:10 PM

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Before he joined the Trump campaign, Paul Manafort hadn’t been seen around Washington in a while. He had made a name for himself in the D.C. lobbying world, but he made a fortune overseas, advising strongmen and doing business with oligarchs. Then his past caught up with him. (Dalton Bennett , Jon Gerberg, Jesse Mesner-Hage/The Washington Post)

Jury members in the trial of President Trump’s former campaign chairman Paul Manafort heard closing arguments Wednesday as they prepared to deliberate on 18 charges of bank fraud and lying to the IRS that could send him to prison for the rest of his life.

“When you follow the trail of Mr. Manafort’s money, it is littered with lies,” prosecutor Greg Andres said during closing arguments to the six-woman, six-man jury in Alexandria, Va. “Mr. Manafort lied to keep more money when he had it, and he lied to get more money when he didn’t.”

As Andres spoke, slowly and dispassionately, jurors looked at him, occasionally scribbling notes in the black notebooks they have used throughout the trial. Manafort, wearing a blue suit, did not look at Andres or the jury while the prosecutor spoke.

In their final appeal to the jury, Manafort’s lawyers said it defied common sense for Manafort to cheat the IRS or banks when his net worth exceeded $21 million.

“Given this evidence, how can we say he didn’t have money?” asked Manafort lawyer Richard Westling, who also said it did not make sense for Manafort to involve so many people — bankers, accountants and a former business partner — in a scheme to hide more than $15 million in income from the IRS.

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One of the charges facing former Trump campaign adviser Paul Manafort is failing to register as a foreign agent, which is required under the Foreign Agents Registration Act. Here's what you need to know about the murky registration requirement. (Jenny Starrs , Jon Gerberg, Dalton Bennett/The Washington Post)

The jury is scheduled to begin deliberations Thursday morning.

Related: [As trial opens, prosecutors say lies fueled Manafort’s wealth]

The trial is the first to arise from special counsel Robert S. Mueller III’s investigation into Russian interference in the 2016 presidential election, although the ­charges against the political strategist center on his personal finances.

During the trial’s first week, Trump declared that Manafort was being treated unfairly and called for the Justice Department to immediately shut down the Mueller investigation.

“The world is watching” the trial’s outcome, said Ilene Jaroslaw, a former federal prosecutor, because the special counsel’s office “doesn’t speak, except in court.”

An acquittal, she said, would embolden Mueller’s critics “and could put the existence of that office at risk.”

“A conviction would show the special counsel has the tools to find out the truth and bring it to light,” said Jaroslaw, now a partner at the law firm Hoguet Newman Regal & Kenney. “It would be enormously important to everyone seeing the threats to the Justice Department and the special counsel to know we can get a measure of justice in the United States.”

During closing arguments, Manafort’s lawyers said the special counsel’s office had gone on a fishing expedition to find evidence of financial crimes.

“Nobody came forward to say we’re concerned about what we’re seeing here. Not until the special counsel showed up and started asking questions,” Westling said, suggesting the special counsel “cobbled together” information to “stack up the counts” against Manafort and overwhelm the jury.

“It is not enough that wrong information or even false information was given,” Westling said, telling jurors that to convict his client, they had to be convinced that Manafort intended to deceive banks and the IRS.

Prosecutors say Manafort failed to pay taxes on $15 million from 2010 to 2014, money that was in overseas bank accounts that Manafort, now 69, kept hidden from his accountants and the IRS. He earned that money working as a consultant for Ukraine’s then-president, Viktor Yanukovych. Yanukovych fled Ukraine in 2014 amid massive street protests, causing Manafort’s income to dry up, according to witnesses.

The key witness against Manafort was his former right-hand man, Rick Gates, who provided testimony describing years of deception that he said was orchestrated by Manafort. Gates pleaded guilty in February to lying to the FBI and conspiring against the United States, and is cooperating against his former boss in hopes of getting a lesser prison sentence.

Related: [Rick Gates forced to admit transatlantic affair]

Manafort’s defense has been almost singularly focused on discrediting Gates, telling the jury that the government’s case rests on the word of an admitted liar and cheat. Lawyer Kevin Downing launched a blistering attack on Gates’ credibility, urging the jury Wednesday to discount his testimony.

“To the very end, he lied to you,” Downing told the jury. “The government, so desperate to make a case against Mr. Manafort, made a deal with Rick Gates.”

Downing said Gates stole millions of dollars from Manafort; Gates testified that he stole several hundred thousand dollars, and admitted he’d engaged in an extramarital affair in London.

Manafort had mistakenly trusted his deputy and applied little oversight to him, Downing argued.

“He did not know the Rick Gates that you saw,” Downing told the jury. “Mr. Gates was orchestrating a multimillion-dollar embezzlement scheme” and trying to keep it from the accountants, Downing said.

“If the accountants had picked up the phone, maybe none of us would be here right now,” Downing told the jurors before asking them to find Manafort not guilty of all charges.

Andres, the prosecutor, suggested jurors should believe Gates, but only because the paper trail and other witnesses — including Manafort’s former bookkeeper and accountants — back up his story.

“Ladies and gentlemen, the star witness in this case is the documents,” Andres said. There were “dozens and dozens” of documents, many of them emails, connecting Manafort to the fraud, he said.

While the defense had mocked Gates as someone who “had his hand in the cookie jar,” Andres said it was actually a “huge dumpster” of hidden money.

Andres urged jurors to examine evidence indicating that Manafort directed Gates to commit crimes, and pointed to one email in which Manafort anointed Gates his “quarterback” in handling a loan application.

“Guess who the coach of that team is?” Andres said.

Over two weeks of testimony, prosecutors called more than two dozen witnesses, including accountants who said Manafort hid his foreign bank accounts from them and vendors who said they were paid hundreds of thousands of dollars by international wire transfers for luxury items: More than $1 million spent on clothes over five years. More than $2 million spent on home entertainment systems. Millions of dollars on homes for himself and his family. And hundreds of thousands of dollars on landscaping, including a bed of red flowers in the shape of an “M” in the backyard of his Hamptons home.

That testimony angered the judge, T.S. Ellis III, who scolded prosecutors for trying to make Manafort’s wealth, rather than his actions, the focus of the trial.

In his closing argument, Andres said the point was not to show that the defendant was rich, but that the defendant controlled the money in those foreign accounts.

“This case is not about Mr. Manafort’s wealth,” said Andres. “We’re in this courtroom because Mr. Manafort filed false tax returns.”

Related: [Judge in Manafort trial concedes mistake after berating Mueller’s prosecutors]

In his parting instructions to the jury Wednesday, the judge cautioned its members to ignore certain factors, including some of his own statements during the trial. Ellis told the panel that none of his comments or questions should be construed as expressions of his opinions to be considered during their deliberations.

He also told them they should ignore any “motive or lack thereof” on the part of the Justice Department in bringing the case against Manafort — a gentle rebuke to defense lawyers’ suggestion that prosecutors went hunting for a crime with which to charge Manafort.

After the jury was sent home, Manafort spoke briefly with his lawyers and wife before heading back to the Alexandria jail where he has been held for several weeks for violating the conditions of his release on a related case in Washington, D.C. federal court.

Outside the courthouse, Downing said, “Mr. Manafort was very happy with how things went today.”

Tom Jackman contributed to this report.


Rachel Weiner tries to cover Alexandria's federal court from a small windowless room with no cellphone access. She sometimes ventures outside to write about crime in Alexandria and Arlington.

Matt Zapotosky covers the Justice Department for The Washington Post's national security team. He has previously worked covering the federal courthouse in Alexandria and local law enforcement in Prince George's County and Southern Maryland.

Lynh Bui is a local reporter covering Prince George's County police, fire and courts. She joined The Washington Post in 2012 and has previously covered Montgomery County education.

Devlin Barrett writes about national security and law enforcement for The Washington Post. He has previously worked at the Wall Street Journal, the Associated Press and the New York Post, where he started as a copy boy.

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