INCOME WAS DISGUISED TO HELP MANAFORT, TAX PREPARER SAYS
ALEXANDRIA, Va. — One of Paul Manafort’s tax preparers admitted Friday that she helped disguise $900,000 in foreign income as a loan in order to reduce the former Trump campaign chairman’s tax burden.
The testimony of tax preparer Cindy Laporta came as prosecutors from special counsel Robert Mueller’s office focused on the heart of their financial fraud case against Manafort, with jurors hearing testimony that he inflated his business income by millions of dollars and concealed foreign bank accounts he was using to buy luxury items and pay personal expenses.
Manafort’s defense has sought to blame any criminal conduct on his longtime deputy Rick Gates, while witnesses for the prosecution have testified that Manafort was heavily involved in his own finances and personally directed Gates’ actions.
On Friday, Laporta acknowledged that she agreed under pressure from Gates during a conference call in September 2015 to alter a tax document for one of Manafort’s businesses to show the $900,000 loan.
When Laporta and a colleague provided an assessment of how much tax Manafort would owe, Gates responded that Manafort didn’t have the money to pay it. After a back-and-forth discussion about how much income should be reclassified as a loan to aid Manafort, they settled on $900,000, she testified.
The result, Laporta said, was an altered tax payment that Gates told her “could be paid by Mr. Manafort.”
Laporta, who testified under a grant of immunity from prosecutors, said she knew what she did was “not appropriate,” adding that “you can’t pick and choose what’s a loan and what’s income.”
Asked why she engaged in misconduct, Laporta said she had few good choices.
“I could have called them liars,” she said of Manafort and Gates. “But Mr. Manafort was a longtime client of the firm, and I didn’t think I should do that.”
That testimony is important as prosecutors try to rebut defense arguments that Manafort can’t be responsible for financial fraud because he left the details of his spending to others. Those others include Gates, who pleaded guilty earlier this year and is expected to testify soon as the government’s star witness.
Most of the email evidence introduced Friday implicated Gates more directly than Manafort in a scheme to convert income into loans. But Manafort was copied in on several emails discussing the matter.