Day Eight of the Paul Manafort trial brought special counsel Robert S. Mueller III’s prosecution team closer to the finish line of its case against the former Trump campaign chairman.
Prosecutors zeroed in on the loan fraud charges against Manafort, who faces 18 total counts of tax evasion and bank fraud and a maximum 305-year prison sentence if the Eastern Virginia jury finds him guilty.
Citizens Bank mortgage loan assistant Melinda James testified about her communications with Manafort and Rick Gates, the political consulting titan’s longtime deputy, regarding a loan application that contained falsified information to increase Manafort’s chances of getting the request approved.
Two other bank employees testified about bank fraud charges against Manafort.
Prosecutors also called an Airbnb employee to testify about a property in Manhattan that Manafort rented out through the website but that he listed as a primary residence on his Citizens Bank loan application.
Manafort is the first subject of the Mueller investigation to stand trial.
ICYMI: What I Learned From 4 Days Covering the Manafort Trial
Here are the three biggest takeaways from Day Eight.
1. Someone lied on the Citizens Bank loan application. Now the jury must decide whether it was Manafort, Gates or both
Manafort’s lawyers did not dispute Thursday that a Citizens Bank loan application he signed in March 2016 contained at least one piece of false information: that Manafort had no mortgage on a property in Brooklyn.
They did, however, contest prosecutors’ assertion that a Manhattan loft he listed as a primary residence on the loan application was actually a rental property. Prosecutors have pointed out that Manafort listed the Manhattan loft as a rental on his tax returns in previous years.
Before lunch, defense lawyer Jay Nanavati read a stipulation — an agreement on facts between the prosecution and the defense — to the jury that Manafort took out a $5.3 million mortgage on a property in Brooklyn on Feb. 9, 2016.
Less than a month later, on March 4, 2016, Manafort signed his name on the loan application saying he did not have a mortgage on the property in Brooklyn and that the Manhattan loft was a primary residence, not a rental.
He was approved for a $3.4 million loan.
Manafort was copied on multiple emails between Gates, who testified against his former boss this week as part of a plea agreement with Mueller’s team, and James, the Citizens Bank loan assistant, as they hashed out the details of the loan application.
Manafort had plenty of opportunities to correct the errors at any step along the way, prosecutors argued. On one email on which Manafort was copied, the subject line explicitly stated, falsely, that there was no mortgage on the Brooklyn property.
“What’s the purpose of having people sign the documents at closing,” U.S. Attorney Uzo Asonye asked James.
“To confirm the information is correct,” James said.
For most of the trial, Manafort’s lawyers have ceded that many of the financial documents he submitted to the IRS, banks, and his accountants contained falsified information.
But his involvement in creating those documents and executing those transactions, they have said, did not extend beyond inking his signature at the bottom.
Gates, who embezzled hundreds of thousands — possibly millions — of dollars from his boss over a decade, went behind his back to cook numbers and conceal his income for him, they have argued.
This much is clear: Someone lied on the Citizens Bank loan application discussed in court Thursday (one of two loans for which Manafort is facing charges for fraud).
When the jury is dismissed to deliberate, they will decide whether it was Manafort, Gates or both.
2. Afternoon witnesses describe a pattern of false, misleading, and omitted information on other Manafort loan applications
Prosecutors tried to highlight for the jury Thursday that Manafort’s alleged bank fraud was not a one-off — or even two-off — instance, but rather part of a larger pattern of financial deceit.
Employees of the two banks from which Manafort secured loans in 2016, Citizens Bank and Banc of California, outlined how Manafort fudged numbers on his financial statements and left out crucial information about his debts in order to secure loans.
Within two months of securing the aforementioned $3.4 million loan from Citizens Bank in March 2016, Manafort applied for another loan — for $5.5 million — for his Brooklyn property, Citizens Bank loan officer assistant Taryn Rodriguez testified Thursday afternoon.
Rodriguez looked through Manafort’s tax and financial records and noticed that he did not disclose on his application a $1 million loan he had previously received on the same property.
Citizens Bank rejected the application.
On another loan application at the Banc of California around the same time, Manafort indicated that he did not have any outstanding loans on his balance sheet — even though he had just secured the $3.4 million loan from Citizens Bank weeks earlier.
Banc of California executive Gary Seferian said they ultimately issued Manafort a $1 million loan based on the reported income for his political consulting firm, DMP International, that the prosecution has shown Manafort and Gates inflated from roughly $400,000 to $4.4 million.
If they had known DMP International had brought in $400,000 instead of the reported $4.4 million would Manafort have gotten any loan at all?
“I don’t think so,” Seferian said.
3. Ellis issues a rare mea culpa
T.S. Ellis III, the presiding judge over the Eastern Virginia District trial, has become a lightning rod for outside criticism over his rough treatment of Mueller’s prosecution team.
The Reagan appointee has grumbled incessantly about prosecutors’ pace in presenting evidence and questioning its witnesses — even though Mueller’s team expects to rest its case roughly a week and a half ahead of schedule.
But on Thursday morning, Ellis issued an unexpected statement to the jury about an outburst yesterday directed at Asonye. The message from Ellis was, essentially, “My bad.”
Ellis barked at prosecutors Wednesday when he learned that the expert witness they called to the stand, IRS agent Michael Welch, had sat in on trial proceedings before his testimony.
Ellis does not allow witnesses — even expert witnesses — to watch the proceedings before they testify, he told Asonye.
“Don’t do that again,” he said. “When I exclude witnesses, I mean everybody.”
But, as Asonye told the judge, a court transcript shows that Ellis explicitly allowed Welch to sit in on the trial.
Prosecutors filed a motion Thursday morning asking the judge to set the record straight for the jurors on Wednesday’s argument over Welch.
“The exchange could very well lead the jury to reach two erroneous inferences,” prosecutors wrote in the motion: one, “that Mr. Welch’s testimony is not credible because he was improperly privy to the testimony of other witnesses,” and two, “that the government sought to secure an unfair advantage by secreting its expert in the courtroom without permission.”
“This prejudice should be cured,” they wrote.
Ellis told the jury Thursday that he was “probably wrong” in his belief Wednesday that he had told prosecutors none of their witnesses would be allowed to observe the trial.
“You may put that aside,” Ellis said. “I may well have been wrong.”