Paul Manafort

Olivier Douliery/Abaca Press/TNS/Sipa USA

Prosecutor: Manafort Lied To Keep Himself Rich

August 15, 2018 - 8:32 am
Categories: 

ALEXANDRIA, Va. (WCBS 880/CBS News/AP) — Paul Manafort lied to keep himself flush with cash and then to maintain his luxurious lifestyle when his income dropped off, prosecutors told jurors Wednesday in closing arguments at the former Trump campaign chairman's financial fraud trial.

The government's case boils down to "Mr. Manafort and his lies," prosecutor Greg Andres said.

More From CBS News

"When you follow the trail of Mr. Manafort's money, it is littered with lies," Andres said as he made his final argument that the jury should focus on evidence the prosecutors have presented over the past few weeks and find President Donald Trump's former campaign chairman guilty of 18 felony counts.

Manafort is accused of tax evasion and bank fraud. Andres spoke for nearly two hours to the jury, which then broke for lunch.

“Their main points were look, this is a documents case. ‘He had these 31 foreign accounts. He didn’t report them – now, black and white stuff. He had limited to no assets, and he lied to the banks and got loans, so just look at the documents, look what happened, don’t get distracted by anything else,’” Washington Post Crime Reporter Tom Jackman told WCBS 880’s Steve Scott and Michael Wallace.

Manafort's trial is the first to emerge from special counsel Robert Mueller's Russia investigation, but it does not relate to Russian election interference or possible coordination with the Trump campaign — the main topics of Mueller's probe.

Several jurors took notes while Andres talked; others looked on attentively. Manafort primarily directed his gaze at a computer screen where documents were shown, rather than looking at jurors. The screen showed emails written by Manafort that contained some of the most damning evidence that he was aware of the fraud and not simply a victim of underlings who managed his financial affairs.

Andres highlighted one email in which he said Manafort sent an inflated statement of his income to bank officers reviewing a loan application. He highlighted another in which Manafort acknowledged his control of one of more than 30 holding companies in Cyprus that prosecutors say he used to funnel more than $60 million he earned advising politicians in Ukraine.

Prosecutors say Manafort falsely declared that money to be loans rather than income to keep from paying taxes on it.

"Ladies and gentlemen, a loan is not income, and income is not a loan. You do not need to be a tax expert to understand this," Andres said.

The government says Manafort hid at least $16 million in income from the IRS between 2010 and 2014 by disguising the money he earned advising politicians in Ukraine as loans and hiding it in foreign banks. Then, after his money in Ukraine dried up, they allege, he defrauded banks by lying about his income on loan applications and concealing other financial information, such as mortgages.

Neither Manafort nor his former deputy, Rick Gates, have been charged in connection with their Trump campaign work. But Mueller's legal team says it discovered Manafort hiding of millions of dollars in income as a result of the ongoing probe.

“We have advanced to closing arguments in this case because the defense announced yesterday they would not be putting up any witnesses. Paul Manafort, when asked by the judge, said that he would not testify,” CBS News White House Correspondent Steven Portnoy told WCBS 880’s Wayne Cabot and Paul Murnane.

Manafort's lawyers have tried to blame their client's financial mistakes on Gates, calling him a liar and philanderer.

Gates, who struck a plea deal with prosecutors, was the government's key witness and has provided much of the drama of the trial so far. During testimony, he was forced to admit embezzling hundreds of thousands of dollars from Manafort and conducting an extramarital affair.

In the closing arguments, Andres said prosecutors aren't asking jurors to like Gates or take everything he said at "face value." Andres said the testimony of other witnesses and the hundreds of documents are enough to convict Manafort on tax evasion and bank fraud charges.

"Does the fact that Mr. Gates had an affair 10 years ago make Mr. Manafort any less guilty?" Andres asked, noting that Manafort didn't choose a "Boy Scout" to aid a criminal scheme.

He also scoffed at the defense's characterization of Gates' embezzlement as having had his "hand in the cookie jar."

"Ladies and gentlemen, this wasn't a cookie jar. It was a dumpster of hidden money in foreign bank accounts," Andres said, noting it was all Manafort's.

Referring to charts compiled by an IRS accounting specialist, Andres told jurors that Manafort declared only some of his foreign income on his federal income tax returns and repeatedly failed to disclose millions of dollars that streamed into the U.S. to pay for luxury items, services and loans. In 2012, Manafort's most successful year during his Ukrainian work, he reported $5.3 million. But he told the government nothing about another $9.2 million that went to pay for loans and other items, prosecutors said.

The prosecutor noted that Manafort should have been well aware each time he signed tax and financial documents indicating that he had no foreign accounts to declare. "Mr. Manafort was willful," Andres said.

Meanwhile, Richard Westling of the defense laid out the three pillars of the presumption of innocence, burden of proof, and reasonable doubt. He said that "Mr. Manafort is innocent and will continue to be innocent until you issue a verdict." He added that  the government has not met the burden of proof, and showed a graphic that was a chart showing the burden of proof at the top and a number of categories below that were labeled "not guilty."

Westling argued that Manafort had been an adviser to many other presidents and that "he is endeavored to serve." He said "Mr. Manafort doesn't do that alone...what he did throughout his career" was "turned to others as a team, sometimes those people are trustworthy and sometimes they're not." He said this was "not consistent" with someone wanting to commit fraud.

Attorney Kevin Downing took over the closing argument for the defense, spending much of his time attempting to discredit Rick Gates' testimony, telling the jury "he lied to you" and he "got one over on you" in reference to what Downing called a "flawless" direct examination. However, he noted, Gates "fell apart" on cross examination, revealing his true nature as untrustworthy character. 

Downing ended his argument by laying blame not only on Gates, but also the FBI itself, telling the jury the FBI did not bring charges against Manafort when they first allegedly investigated in 2014. If they had done so, Downing told the jury, "none of us would be here."

He concluded by telling the jury that the "Government has not met the burden of proof" to convict Manafort. 

On Tuesday, U.S. District Court Judge T.S. Ellis III rejected a defense motion that the case should be dismissed because the government had not met its burden of proof. Manafort's lawyers asked the judge to toss out all the charges, but they focused in particular on four bank-fraud charges.

Manafort's lawyers argued there is no way that one of the banks, Federal Savings Bank, could have been defrauded because its chairman, Stephen Calk, knew full well that Manafort's finances were in disarray but approved the loan to him anyway. Witnesses testified that Calk pushed the loans through because he wanted a post in the Trump administration.

Ellis, in making his ruling, said the defense made a "significant" argument, but that the decision was "an issue for the jury" to decide.

Prosecutors were allowed a rebuttal after the defense's closing argument Wednesday, and jurors will be instructed, before the case goes to the jury.

“He’s looking at 10 to 20 year s—now that’s sort of the maximums, and people don’t usually get the maximums, but the maximums on each count could run up into the hundreds—but logically up to 10 to 20 years,” Jackman said.

Manafort will stand trial in a separate case next month.

“This is the first of two federal cases that involves Paul Manafort. The second will begin next month in a separate jurisdiction across the Potomac River – the U.S. District Court for Washington, D.C. In that court, the prosecutors will allege that Paul Manafort illegally lobbied for pro-Russian forces in Ukraine by not registering as a foreign agent, in violation of the law, all having to do with things that took place years before Paul Manafort ever joined Donald Trump’s campaign,” Portnoy said.

(© 2018 WCBS 880. CBS News and The Associated Press contributed to this report.)