Prosecutors Conclude Arguments Against Paul Manafort In Bank And Tax Fraud Trial

Aug 13, 2018
Originally published on August 14, 2018 8:46 am

Prosecutors rested their case on Monday in the federal tax and bank fraud trial of Donald Trump's former campaign chairman Paul Manafort.

Over the past three weeks, through 10 days of testimony and more than two dozen witnesses, the government's lawyers told a story about how they said Manafort evaded taxes on millions of dollars that poured in from his political consulting work in Ukraine.

After that income dried up, prosecutors say, Manafort lied to banks to get loans to continue the lifestyle to which they say he had become accustomed.

Manafort has pleaded not guilty; his attorneys say he didn't pay close enough attention to his finances to have deliberately committed the crimes of which he has been accused.

The bankers

Much of the recent testimony focused on the alleged bank fraud.

A witness on Friday detailed the level of involvement by Stephen Calk, the CEO of Federal Savings Bank, in helping Manafort get loans for which he might normally have been rejected.

Former Federal Savings Bank Vice President Dennis Raico testified that Calk pushed through Manafort's loans over the concerns of other members of the bank's leadership.

Raico said that Calk wanted a job in the Trump administration and made that known to Manafort.

Federal Savings Bank Vice President Jim Brennan testified under immunity from prosecution on Monday that there were inconsistencies, specifically involving income reporting, in Manafort's loan paperwork.

Brennan was then asked by prosecutors why such inconsistencies would matter when a bank is deciding on whether to offer someone a line of credit.

"It would go to the character of the borrower," Brennan said, "which should mean that we would raise a red flag."

Brennan said the $16 million that Manafort received was among the largest loans the bank had ever made. Despite the doubts about Manafort's ability to repay them, the loans "closed because Mr. Calk wanted them to close," Brennan said.

Jurors heard earlier in the trial that Manafort reached out to the Trump transition team to discuss the prospect of Calk becoming secretary of the Army.

The bank did not make money on the loans, Brennan said. It wrote them off as losses by the end of 2017.

What's next

Court is due to resume on Tuesday morning. Judge T.S. Ellis III is expected first to rule on a motion by Manafort's lawyers asking him to throw out the charges, a standard defense maneuver.

After that, if the judge allows the trial to move forward, Manafort's defense attorneys will get the chance to make their own case. They will have the opportunity to call witnesses, although it's unclear whether they might.

Manafort is not expected to be called to testify on his own behalf.

Up to this point, the defense strategy has been to pin any financial crimes on Manafort's former business partner Rick Gates, who is cooperating with prosecutors as part of a plea agreement.

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STEVE INSKEEP, HOST:

Today, defense lawyers get their opportunity in the trial of Paul Manafort. President Trump's former campaign chairman is on trial for bank and tax fraud, and prosecutors finished their case yesterday as NPR justice reporter Ryan Lucas looked on from the courtroom.

Hey there, Ryan.

RYAN LUCAS, BYLINE: Hello. Good morning.

INSKEEP: How'd the prosecution finish its case?

LUCAS: Well, on Monday, jurors heard from James Brennan. He's an executive at the Federal Savings Bank. And this is a bank that loaned Manafort $16 million in late 2016 and early 2017. Now, Brennan was one of the government witnesses who was testifying under an immunity agreement. He said that he had concerns about Manafort's financials. But at least one of the loans that the bank gave Manafort was pushed through, Brennan said, because the bank's chairman, Steve Calk, wanted it approved.

Now, the jury heard last week from another executive with the same bank about how Calk became chummy with Manafort in 2016 and that Calk wanted a job in the Trump administration. So, in total, the government presented 27 witnesses over 10 days. And then right around 5 o'clock yesterday afternoon, prosecutor Greg Andres stood up in the courtroom and said, the government rests its case.

INSKEEP: OK. So I'm just thinking about that transaction you just detailed. We have a suggestion that Paul Manafort used his position close to candidate and then President Trump to get a bank loan that he might not otherwise have gotten. That's one of many allegations. What does the prosecution's overall case add up to here?

LUCAS: Well, over the past two weeks, the government has worked to try to show that Manafort made millions of dollars from political consulting work in Ukraine, and then he hid a lot of that income in shell companies and bank accounts overseas, mostly in Cyprus. They say that when that income dried up after the Ukrainian leader that Manafort was working for was overthrown in a popular uprising - when that money stream ran out, the government says that Manafort started lying to U.S. banks to qualify for loans. And he did this, the government says, to maintain this high-rolling lifestyle that he was accustomed to.

Now, prosecutors called to the stand sellers of luxury menswear, owners of landscape companies, luxury car dealers to testify to what Manafort spent his money on. They brought in accountants and bookkeepers to testify about his finances and what he told them and, more importantly, perhaps, what he withheld - what information he withheld. There were representatives of the IRS and the Treasury to talk about money and tax returns. And then the last part of the case was bankers to testify about Manafort's loan applications. And throughout all of this, there was a substantial paper trail to back up the witness testimony.

INSKEEP: And, of course, we got to see photos of his wardrobe along the way. What about the defense here? What is the case that can be made for Paul Manafort?

LUCAS: Well, the defense will have its chance to call witnesses if it wants to do so. We'll hear from Manafort's lawyers on that point today. There's also the question of whether Manafort will testify. We don't expect him to, but there's that option. Overall, though, the main crux of Manafort's defense has been that, sure, he may have made mistakes, but it wasn't intentional; he wasn't intentionally breaking the law. And they say that any wrongdoing isn't his fault. Instead, they've tried to pin the blame on the government's star witness in this case. That's Manafort's former deputy, Rick Gates.

Now, Gates, you'll remember, was indicted alongside Manafort. He eventually pleaded guilty and became a cooperating witness, and he testified in this case against Manafort. Now, Gates was subjected to a very effective and I would say bruising cross-examination over the course of three days last week, and the aim was to tarnish his credibility.

INSKEEP: Which is a useful point to remember - sometimes, you find a defense team that will decide to present no case and essentially argue that the prosecution didn't make its case.

LUCAS: Right. And the defense has actually put forward motions to have the charges tossed out. This is pretty standard. Manafort's lawyers say that they want to focus in particular on some of the bank fraud charges. They say the government really hasn't proven its case there. We'll hear from the judge on those this morning. And then we still have closing arguments and jury instructions, so still a little ways to go in this.

INSKEEP: Ryan, pleasure talking with you. Thanks very much.

LUCAS: Thank you.

INSKEEP: That's NPR's Ryan Lucas. Transcript provided by NPR, Copyright NPR.