Prosecutors Expected To Rest Friday After Scrutiny Of Paul Manafort's Finances

6 hours ago
Originally published on August 10, 2018 5:30 am

Prosecutors are expected to rest their case on Friday in Paul Manafort's bank and tax fraud trial after two weeks of granular testimony from accountants, bookkeepers, luxury vendors and Manafort's former business partner.

Manafort, who served as Donald Trump's campaign chairman in 2016, made his fortune through political consulting overseas. Prosecutors say he evaded taxes on millions of dollars by hiding it in shell companies and bank accounts based mainly in Cyprus.

They also allege that after Manafort's income dried up — his most important political client in Ukraine was ousted from power — Manafort lied to banks in order to qualify for loans to sustain his luxurious lifestyle.

Prosecutors are expected to call four or five witnesses on Friday, then it will be the defense's turn to make its case. It's unclear how many witnesses Manafort's team intends to call, but the trial still seems on track to conclude next week.

Manafort has pleaded not guilty and his defense attorneys have blamed any financial wrongdoing in the case on his former partner, Rick Gates, who has pleaded guilty to related charges as part of an agreement with the Justice Department.

Prosecutors present a paper trail

Gates may have been the prosecution's most exciting witness — acknowledging embezzlement and at least one extramarital affair — but he was only one of many who have appeared in the trial.

Gates testified early in the week for parts of three days, but the rest of the trial has been consumed by accountants and bankers who worked on Manafort's taxes and processed his bank loan applications, as well as vendors who sold him numerous high-priced items like luxury cars and custom suits.

Throughout the trial, prosecutors also have relied on emails sent to and from Manafort about his properties, as well as the accountants who worked with his finances.

That may have been a countermeasure against one of the defense's arguments, which was that Manafort was not intimately enough involved in his own finances to have deliberately committed financial crimes.

Prosecutors must prove to jurors that if Manafort did evade taxes or misguide banks, he did so intentionally and not by mistake.

Bankers' evidence

To that end, prosecutors on Thursday questioned Melinda James, a loan assistant at Citizens Bank, and Peggy Miceli, a vice president at Citzens Bank.

Manafort received a $3.4 million refinancing loan from Citizens Bank in 2016 on a property he owned in New York. Prosecutors allege that in applying for that loan, Manafort lied by classifying it as his second home instead of an investment or rental property. Actually, they said, he was renting it out.

Miceli testified that Manafort would not have been eligible for a loan that large against the property had the bank known it was being rented. Earlier in the day, a representative from Airbnb testified that the property had been listed as available for rent for much of 2015 and 2016.

During James' testimony, prosecutors showed the jury an email from Manafort to his son-in-law notifying him that the bank was sending an appraiser to assess the property.

"Remember, he believes that you and Jessica are living there," Manafort wrote. Prosecutors said that showed Manafort knew he was misrepresenting how the home was being used.

The judge ... apologizes?

Judge T.S. Ellis has had a massive effect on the quick pace of Manafort's trial, but he's had an even larger impact on the tone of the courtroom.

He has admonished prosecutors almost daily. Last week, he took them to task because he said they were sowing resentment in the jury for Manafort's wealth. The judge growled at them this week to "get to the heart of the matter."

On Thursday, however, Ellis offered something different: an apology — or close to it.

Ellis upbraided the government's lawyers on Wednesday for allowing an IRS expert witness into the courtroom to watch trial proceedings before he testified. But as prosecutors noted in a motion filed after court on Wednesday night, the judge had previously said the IRS witness could stay in the courtroom.

Prosecutors argued in the motion that Ellis' criticism on Wednesday could imply that the government was trying to skirt rules in its trial tactics and gain an unfair advantage, when in fact Ellis had explicitly given prosecutors permission for the expert witness to stay in the room.

"This prejudice should be cured," prosecutors wrote.

Ellis opened court on Thursday by admitting he "may have been wrong" and that he sometimes makes mistakes "like any human — and this robe doesn't make me any more than a human."

"Any criticism of counsel should be put aside," the judge said. "It doesn't have anything to do with this case."

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