Bookkeeper notes false info on Manafort forms

ALEXANDRIA, Va. — Paul Manafort inflated his income by millions and kept his bookkeeper in the dark about the foreign bank accounts he was using, according to testimony during his trial Thursday.

He otherwise approved “every penny” of the bills that bookkeeper Heather Washkuhn paid for him, she said.

That testimony is important to special counsel Robert Mueller’s team as it looks to rebut arguments that Mr. Manafort can’t be responsible for financial fraud because he left the details of his spending to others.

“I would say he was very knowledgeable. He was very detail-oriented. He approved every penny of everything we paid,” Ms. Washkuhn said.

She also described documents submitted by Mr. Manafort to obtain loans. Prosecutors say the documents inflated the net income of his business by roughly $4 million, and they say he tried to pass them off as coming from her accounting firm.

The fraudulent loan documents came after Mr. Manafort’s political consulting work in the Ukraine dried up, prosecutors say. Ms. Washkuhn told jurors about a series of emails she sent him in 2016 warning he was behind on payments.

Ms. Washkuhn also told the jury Mr. Manafort’s seven-figure lifestyle lasted until about 2015, when bills piled up and he and his business partner began trying to fudge numbers.

Her statements came a day after witnesses testified that Mr. Manafort spent more than $1 million on suits and luxury clothes over five years.

Mr. Manafort faces charges of bank fraud and tax evasion that could put him in prison for life. It’s the first courtroom test of Mr. Mueller’s team, tasked with looking into Russia’s efforts to interfere with the U.S. election and whether the Trump presidential campaign colluded with Moscow.

While the question of collusion remains, Mr. Manafort’s financial fraud trial has exposed the lucrative, secretive world of foreign lobbying that made Mr. Manafort.

Other witnesses testifying said Mr. Manafort paid them millions from offshore accounts tied to foreign shell companies.

When prosecutor Greg Andres read off some of the companies to Mr. Manafort’s bookkeeper, she said Mr. Manafort never told her about them. She said she would have documented them for tax purposes if he had.

Mr. Manafort’s attorney Thomas Zehnle tried to get Ms. Washkuhn to say Rick Gates — who’s agreed to cooperate against his former boss and partner in the hopes of getting a lighter sentence — was heavily involved in approving expenses. The Manafort legal team has been working to convince the jury Mr. Gates is to blame, not their client.

But Ms. Washkuhn said that while Mr. Gates dealt with some business matters for Mr. Manafort’s consulting firm, “mainly Mr. Manafort was the approval source.”