Mueller team rests its Manafort case
Bank exec talks of ‘red flags’ found on loan applications.
ALEXANDRIA, VA. — A bank executive said he found several red flags with Paul Manafort’s finances while the former Trump campaign chairman was being considered for $16.5 million in bank loans.
The testimony, on the 10th day of Manafort’s financial fraud trial, comes as the prosecution rested its case Monday.
James Brennan, a vice president at Federal Savings Bank, says Manafort failed to disclose mortgages on his loan application. He said he also found several “inconsistencies” in the amount of income Manafort reported for his business.
That information led senior executives to reject one of the loans. But Brennan said Federal Savings Bank chairman Stephen Calk overruled that decision.
“It closed because Mr. Calk wanted it to close,” Brennan said.
Other witnesses have said Calk pushed the loans through because he wanted a plum post in the Trump administration.
Brennan said the Chicago-based bank lost $11.8 million because it had to write off a significant portion of two loans it made to Manafort. He said they were the two largest loans the bank had made when they were issued in late 2016 and early 2017.
Manafort is accused of fraudulently obtaining the loans by inflating his income and concealing other financial information. He is fighting the charges.
Brennan, who testified under an immunity deal, said the bank found several problems with the information Manafort provided that should have raised questions about his character and whether he was providing inaccurate information to obtain the loans.
Chief among those problems, Brennan testified, was that Manafort failed to disclose that he had defaulted on two of his loans.
Manafort checked “no” when asked on his loan application if any of his other loans were in default. But in fact, Brennan testified, Manafort was in default for a $5.7 million loan he had taken out for a Los Angeles property and had also stopped paying on a $6.5 million loan on a New York residence.
Brennan said there also were other “red flags” that made Manafort’s loan application look shaky. There were discrepancies between the income his company listed on a 2015 profit and loan statement and the income listed in Manafort’s 2015 tax return. And Brennan was concerned about an unpaid $300,000 American Express card debt for luxury New York Yankees season tickets.
Prosecutors said last week that they would wrap up their case against Manafort on Monday. Defense lawyers have not said whether they expect to call any witnesses after that.
The proceedings were halted for hours on Friday by mysterious backstage discussions between the judge and attorneys for both sides. U.S. District Judge T.S. Ellis III recessed the trial without explanation after huddling with his bailiff and attorneys from special counsel Robert Mueller’s office and Manafort’s lawyers for more than 20 minutes.
At one point, Ellis left the courtroom and headed toward the jury room. After bringing court back into session, he reminded jurors several times that they weren’t to discuss the tax evasion and bank fraud case at all. That included telling them to not even comment on the attire of any witnesses.