ALEXANDRIA, Va. — U.S. Attorney Greg Andres offered the first real hint Thursday at how his team plans to attack former Trump campaign chairman Paul Manafort and prove he directed a vast tax evasion and bank fraud scheme.
The high-powered political consultant is on trial for 18 counts of tax evasion and bank fraud and faces a maximum 305-year prison sentence if the Northern Virginia jury finds him guilty.
The hint Thursday came in the form of a March 16, 2016 email exchange between Manafort’s longtime deputy, Rick Gates, and his bookkeeper, Heather Washkuhn, who faced over two hours of questioning from the prosecution Thursday.
In 2015 and 2016, Manafort applied for a handful of bank loans when his DMP political consulting group’s revenue stream dried up at the end of 2014.
In order to secure those loans, he needed to show that he had a substantial enough income to eventually repay them.
In the March 2016 exchange, Gates asks for a copy of an editable Word document of the previous year’s revenue and expenses sheet, which shows DMP’s net income from 2015.
When Washkuhn says her machinery can only spit out a hard copy of the financial statements — and she can either scan him a copy or send him one in the mail — Gates grumbles.
“It sounds like old technology,” he replies.
Then Gates asks Washkuhn to alter DMP’s reported income, per a request from someone else.
Gates emails that “he wants” — that is, someone Gates has been consulted with on the matter wants — Washkuhn to reclassify $2.6 million in “accrued revenue” as “income” on their statement sheets.
“He” refers to Manafort, Washkuhn said under oath.
The email exchange was the first piece of evidence that appears to demonstrate Manafort directed, or was at least consulted on, his finances.
But the prosecution will need to provide more documentary evidence — emails, text messages, substantially corroborated conversations — that Manafort was complicit in setting up dozens of foreign bank accounts to conceal more than $30 million from the IRS and lying about his income to potential lenders when those foreign accounts depleted.
Is the email exchange revealed Thursday likely to come up again in later testimony, including that of Gates?
“Absolutely,” one former U.S. attorney with experience prosecuting similar cases told Roll Call. “Prosecution knew what her answer was going to be to that question. And they know what Gates’ answer is to that question. It’s going to be consistent with what she said.”
The March 2016 email exchange won’t earn Manafort a guilty verdict on its own. Prosecutors still have hundreds of pages of evidence and possibly 20 more witnesses to call to the stand.
It’s only Day Three of a trial that they originally said would take roughly three weeks, although they could potentially rest their case next week, they said Wednesday.
“I’m sure they have more than that,” the former U.S. prosecutor said of the email exchange.
The level of detail Gates delivers on his interactions with Manafort when he answers prosecutors’ questions in the coming days will have a substantial impact on Manafort’s fate.
“When you have very detailed testimony from a witness, it gives you more credibility with a jury,” the former prosecutor said.
Three witnesses testified Thursday morning about the services they rendered Manafort from 2011 to 2015, including landscaping at Manafort’s house in the Hamptons, installing a karaoke machine for Manafort, and setting up the wiring and home electronics systems in many of his properties.
In the first two days of the trial, prosecutors tried to paint a picture for the jury of Manafort as a man consumed by money, who would willingly and knowingly lie on IRS documents to circumvent taxes and keep more of that money.
“I think they’re trying to paint him as a desperate person. He’s spent so much money, he doesn’t have it to support his lavish lifestyle anymore, and he’s going to start cheating,” the former prosecutor said.
“That’s what tax crimes essentially comes down to — cheating.”
Morgan Phillips contributed to this story.