“By agreement of the parties, the government will take custody and control” of Manafort’s Trump Tower condo in New York City and a home in the Hamptons — where he spent more than $2 million on a home entertainment system and a bed of red flowers in the shape of an “M”— starting “on or after” Saturday, the court ordered. Other assets to be forfeited include the contents of four bank and life insurance accounts and a condo in Manhattan’s Chinatown.
The six-page filing, by U.S. District Judge Amy Berman Jackson of the District, follows Manafort’s Sept. 14 guilty plea in Washington to conspiring to defraud the United States and witness tampering over a decade of working for pro-Russian politicians in Ukraine. The order gives lenders 30 days to request changes to resolve debts or interests they may hold on the property the government will seize.
The extent of Manafort’s wealth was not fully disclosed at his Washington plea or during his federal trial in Virginia where a jury convicted him on eight bank and tax fraud charges. But a review of court records unsealed in August and public land records indicates he will be forced to relinquish about $15 million under a plea deal he entered “to make sure his family remained safe and live a good life,” as his attorney Kevin Downing said at the time.
Manafort’s attorneys gave courts varying estimates of his net worth over the course of his prosecution by special counsel Robert S. Mueller III. They pegged it at $28 million as of the end of last year, during discussions to try to get bail. In closing arguments this August to federal jurors in the case in Alexandria, they argued he had a net worth of $21 million as of the end of 2016.
Manafort’s Virginia convictions do not include a forfeiture requirement, leaving Jackson’s ruling binding. On Friday, U.S. District Judge T.S. Ellis III of Alexandria set the February sentencing on the eight convictions there. The Virginia jury deadlocked on 10 others counts that Ellis on Friday dismissed.
Court filings did not spell out the dollar amount Manafort must give up.
Rather, they state that his lawyers and the government agreed that seven assets listed for forfeiture “represent property that constitutes or is derived from proceeds of, and property involved in, the criminal offenses.”
The value to the government will ultimately be decided when Manafort’s real estate is sold.
However, the total appears close to the $16 million that FBI forensic accounting experts at the Virginia trial testifiedhe netted in unreported income.
Some initial estimates in news accounts reported the total to be given up as $22 million, citing the resale value of Manafort’s properties as calculated through Zillow, the online real estate company. Other news accounts added another roughly $24 million in hidden income that Manafort in plea papers admitted taking in wires from overseas entities for bogus “loans” and vendor payments.
Butmost of Manafort’s properties appear heavily mortgaged or otherwise encumbered.
Online New York City property and federal court records show Manafort owes more on three of his properties than their Zillow-estimated $10 million market value — his $3 million, 1,500-square foot condo on the Trump Tower’s 43rd floor; a four-story, two-unit brownstone in Brooklyn, valued at $4.2 million; and a $3.1 million loft in SoHo.
Manafort’s lawyers in court filings claimed $4 million in equity at his and his wife’s 10-bedroom, $12 million home in Water Mill, near Bridgehampton, and $3.7 million in equity at a three-bedroom, three-bathroom condo in New York City’s Chinatown, co-owned by the Manaforts and a daughter.
Those values were submitted to the court with the agreement of prosecutors and approved by Jackson in December to secure a $10 million pretrial release package that was never finalized. Both sides also agreed to include $2.6 million cash value in a life insurance policy in the package, the same policy that Manafort is now required to forfeit, yielding about $10.3 million.
The forfeiture order also lists all funds seized in two bank accounts, and all funds or property traceable to a third bank account. No dollar value is listed. However, an FBI affidavit unsealed after Manafort’s Virginia trial at the request of news organizations, including The Washington Post, showed U.S. investigators had obtained court authorization to seize $5.1 million in three Manafort accounts consistent with those described in the forfeiture order. The affidavit was dated the day Manafort was indicted on Oct. 27, 2017.
Adding that $5.1 million to the estimated $10.3 million real estate value yields a total of a little more than $15 million for a possible forfeiture.
Spokesmen for Manafort and for Mueller’s office declined to comment on an estimate of the forfeiture tally.
Actual sale prices on properties will depend on timing, market conditions and the asset. The debt secured by Manafort’s properties that remains outstanding also could vary from public reported amounts because of errors, undisclosed or more recent changes or other reasons, including payments he made.
“The math is the math, properties are worth what they’re worth,” said Patrick Cotter, a former federal prosecutor in Chicago. “But if there’s mortgages, if there’s liens, if there’s been depreciation, markets go up, and markets go down — it’s not uncommon for the sides in a case to disagree,” he said.
Investigators also may have seized other accounts, or the actual amount recovered could have been more or less than expected or reduced through negotiation based on facts that emerged through trial and before Manafort, 69, pleaded guilty.
Manafort agreed not to seek clemency to relieve him of his financial obligations, and agreed to permit the government to go after his assets in civil or other proceedings if he is pardoned.
Manafort was allowed to retain his and his wife’s five-bedroom, $1.3 million home in Palm Beach Gardens, Fla., and substitute his own Trump Tower condo in place of a Charles Schwab investment account co-owned with his wife. He also was allowed to substitute the Chinatown condo to preserve a debt-free house in Arlington he purchased for one of his daughters.
“It’s important to note that even criminals sometimes earn honest money,” Cotter said. “The goal is not to turn guilty people penniless. The goal is to recover any money you can prove that he improperly got,” he said.