Northwest Arkansas Democrat-Gazette
Witnesses say Manafort lied on loan forms
Judge tells jurors to ignore his chastising of prosecution
ALEXANDRIA, Va. — After three days of dramatic testimony in the trial of Paul Manafort, prosecutors on Thursday returned to the nuts and bolts of their case against President Donald Trump’s former campaign chairman as they sought to show he obtained millions of dollars in bank loans under false pretenses.
Attorneys for special counsel Robert Mueller also got a rare — and narrow — acknowledgment from U.S. District Judge T.S. Ellis III that he likely erred when he angrily confronted them a day earlier over whether he had allowed a witness to watch the trial.
The judge’s comments and detailed testimony about Manafort’s loans came during the eighth day of his trial as prosecutors began presenting the bulk of their bank fraud case against him after spending days largely on tax-evasion allegations. Prosecutors say they expect to rest their case today.
After several days of testimony from the prosecution’s star witness, Manafort’s former right- hand man Rick Gates, the jury heard Thursday from bank employees and executives who testified about the alleged false claims Manafort made to obtain millions of dollars in loans — the charges that carry the most potential prison time.
Prosecutors say that between 2010 and 2014, Manafort hid $15.5 million in overseas accounts, which he did not report to the IRS. He made that money doing
political consulting in Ukraine, but when the work dried up in 2015, authorities say, he lied to secure bank loans to maintain his luxurious lifestyle.
Melinda James, a Citizens Bank mortgage loan assistant, testified that Manafort obtained a $3.4 million loan by telling the bank that a New York City property would be used as a second residence, but she found it listed as a rental on a real estate website. That distinction matters because banks regard loans for investment properties as riskier and impose restrictions, including on how much money they’re willing to lend.
Jurors saw an email from Manafort to his son-in-law Jeffrey Yohai, in which he advises him that an appraiser is looking to schedule a visit to the property.
“Remember he believes that you and Jessica are living there,” Manafort wrote in the email, referring to his daughter. “Let me know when you have arranged it.”
Manafort also asserted that he did not have a mortgage on a different New York property, even though he actually did, James said.
All the while, Manafort signed paperwork indicating that he understood that he could face criminal or civil penalties if he lied to the bank.
Multiple bank officials said accurate information is essential for them as they decide whether to approve a loan.
“The underwriter needs a clear picture of all the debts, the monthly debts, of the borrower in order to make an accurate decision on the loan,” James said.
Airbnb executive Darin Evenson also told jurors that one of Manafort’s New York City properties was offered as a rental through much of 2015 and 2016.
One of Manafort’s defense lawyers, Jay Nanavati, said Gates was to blame for any errors in the loan application. Nanavati also suggested that, even though the property was listed for rent on Airbnb for more than a year, it could still be used as a primary residence.
Another witness, Citizens Bank Vice President Peggy Miceli, said Manafort would not have gotten the $ 3.4 million loan if the bank had known it was a rental property.
“The loan was way over the maximum” for an investment property rather than a home, she said.
The terms of Manafort’s loan also allowed him to withdraw cash from the bank, and Miceli testified that was not allowed for loans against investment properties.
The prosecution has put forward more than 20 witnesses, including Gates, and a trove of documentary evidence as they’ve sought to prove Manafort defrauded banks and concealed millions of dollars in offshore bank accounts from the IRS. But along the way they’ve not only faced an aggressive defense team, but a combative relationship with Ellis.
The judge has subjected the prosecution to repeated tongue-lashings over the pace of their questioning, their amount of trial exhibits and even their facial expressions.
During Wednesday’s dustup, prosecutor Uzo Asonye pointed out the judge had previously told prosecutors that witness Michael Welch, an IRS agent, could sit in the courtroom, and the judge shot back: “I don’t care what the transcript said. Maybe I made a mistake. Don’t do it again.”
Witnesses are usually excluded from watching unless allowed by the judge.
Overnight, prosecutors filed a motion with the court asking the judge to tell the jury to ignore that criticism.
“While mistakes are a natural part of the trial process, the mistake here prejudiced the government by conveying to the jury that the government had acted improperly and had violated court rules or procedures,” the prosecutors wrote.
Prosecutors attached a transcript showing that in fact Ellis had approved the request a week before.
On Thursday morning, the judge told the jury, “I may well have been wrong,” adding that he had not read the court transcript. “I was probably wrong,” Ellis said.
“This robe doesn’t make me any more than a human,” he said, concluding, “Any criticism of counsel should be put aside — it doesn’t have anything to do with this case.”
Welch had told jurors that Manafort didn’t report at least $16 million on his tax returns between 2010 and 2014. He also said Manafort should have reported multiple foreign bank accounts to the IRS in those years.
On Thursday, prosecutors also asked Ellis to seal portions of a bench conversation that came during the testimony of Gates because “substantive evidence” in an ongoing investigation was discussed.
Prosecutors didn’t specify the nature of the information, but one bench conference came after Manafort’s defense team attempted to question Gates about whether he had discussed his work on the Trump campaign with Mueller’s team.
The judge agreed Thursday night to seal the portion of the sidebar.
Neither Manafort nor Gates was charged in connection with their Trump campaign work, but the special counsel continues to investigate Russian election interference and any ties to associates of the president. Trump has closely watched Manafort’s trial as he continues to fume publicly about Mueller’s investigation.
Thursday’s testimony was devoid of some of the drama from the past few days, when Gates was confronted about having embezzled hundreds of thousands of dollars from Manafort and was forced to admit on the witness stand to an extramarital affair.
Information for this article was contributed by Eric Tucker, Stephen Braun and Chad Day of The Associated Press; and by Rachel Weiner, Matt Zapotosky, Lynh Bui, Devlin Barrett and Tom Jackman of The Washington Post.