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Home / World

Manafort on trial: Prosecution rests as court hears $24m loans written off as a loss

Washington Post
14 Aug, 2018 12:50 AM5 mins to read

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Paul Manafort. Photo / The Washington Post

Paul Manafort. Photo / The Washington Post

Prosecutors rested their case today against former Trump campaign chairman Paul Manafort after two weeks of testimony detailing the million-dollar lies they say he told to the IRS and banks that loaned him money.

The six-man, six-woman jury in Alexandria, Virginia, is expected to hear closing arguments later this week, and today's session ended without defence lawyers signalling how many witnesses - if any - they intend to call to rebut the government's case.

The judge is expected to decide tomorrow whether to grant a defence motion to dismiss the case before the case goes to the jury - a frequent defence request that is rarely granted.

Manafort, 69, faces the prospect of spending the rest of his life in prison if he is convicted on many of the 18 charges of lying on tax forms and loan applications in the case brought by Special Counsel Robert Mueller, who is investigating Russian interference in the 2016 election and related matters.

Prosecutors say Manafort lied to the IRS to hide millions of dollars in foreign bank accounts and then, when that money ran out, lied to bank executives to get loans to maintain his seven-figure lifestyle of expensive suits and luxury homes.

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In the course of testimony from more than two dozen prosecution witnesses, the biggest arguments were not between prosecutors and defence lawyers, but between prosecutors and Judge T.S. Ellis.

The judge has repeatedly expressed scepticism over points raised by the government, to the frustration of prosecutors, who have urged him not to misstate facts or law in the jury's presence. Twice, the prosecution team filed formal requests that the judge tell the jury to ignore a prior statement of his; he did so once.

The prosecution had planned to rest its case last week, but an unknown issue that the judge decided to keep under seal delayed the start of proceedings for several hours that day. Today, defence lawyers filed a sealed motion, and prosecutors filed a response also under seal. Neither side gave any indication what the issue was, but the judge indicated that it would be revealed after the trial was over.

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"What we do will not be permanently sealed," he told reporters and onlookers in the courtroom, as he prepared to have another sealed discussion.

I took a train down to Alexandria last week to watch a couple days of the Manafort trial. Yahoo News asked me to write about it. And I did. Then they asked me to publish it under my real name. And I agreed to. https://t.co/3uzEXEE4fo

— southpaw (@nycsouthpaw) August 13, 2018

Prosecutors also called an executive from Federal Savings Bank to testify about loans Manafort received in 2016 and 2017.

By that time, according to investigators, the millions of dollars Manafort had been making every year as a political consultant in Ukraine had dried up. His main client, former Ukrainian President Viktor Yanukovych, had fled the country in 2014, and Manafort had not found new clients, according to witnesses.

As his business hemorrhaged money, Manafort decided to take out loans on various properties he owned, but prosecutors say he lied about his debts and income to get those loans approved.

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James Brennan, a vice-president at Federal Savings Bank, which issued two loans worth a total of US$16 million ($24m), testified that Manafort didn't declare on his applications that he had mortgages on two properties in New York - information that would have made it harder for him to secure a loan.

Other bank officials saw "red flags" in Manafort's loan application and wanted to reject it, he said. On the forms, Manafort claimed more than US$4 million income for his business in 2015, but other documents showed he made less than US$400,000, Brennan testified.

Steve Calk, the bank chairman who pushed for $16M in shady loans to Manafort, also sent him a list of Trump Admin jobs he wanted "in rank order." pic.twitter.com/EChzpTsg3I

— Andrew Prokop (@awprokop) August 14, 2018

Those concerns were overruled by the bank's chief executive, Steve Calk, according to Brennan and another witness. Calk had hoped to land a Cabinet-level position in the new Trump Administration, a former bank executive testified last week.

When Manafort changed the terms of a proposed loan, the bank's president wanted to reject it but was overruled by Calk, Brennan testified.

"It closed because Mr Calk wanted it to close," Brennan said.

One of the loans received a rating of four - the lowest possible grade an application could get and still be approved, Brennan said, adding that he would not have approved the loan. The only reason the rating was even that high was because Calk pushed for it, Brennan said.

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The US$16 million represented the largest loans the bank had ever issued up to that point in time, Brennan testified.

Brennan testified that the loans have not yet been repaid, and the bank has written them off as a loss.

Manafort faces a second trial next month on charges of failing to register as a lobbyist for a foreign government and conspiring to tamper with witnesses.

BREAKING: Prosecution rests in Manafort trial. #MTPDaily@KenDilanianNBC: “Tomorrow morning we’re going to find out if the defense has any witness at all. And if so, how many. And whether Paul Manafort will testify” pic.twitter.com/pWdUTHVlCA

— Meet the Press (@MeetThePress) August 13, 2018
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