posted 08-10-2018 11:23 AM                  

Reuters, Karen Freifeld, Sarah N. Lynch, Nathan Layne
ALEXANDRIA, Va. (Reuters) -

The federal judge in the trial of U.S. President Donald Trump’s former campaign chairman Paul Manafort expressed contrition on Thursday to jurors after berating prosecutors for allowing a witness to watch the proceedings, despite having given his earlier approval.

The rare apology by U.S. District Court Judge T.S. Ellis surprised observers in his Alexandria, Virginia courtroom, who have watched the judge repeatedly criticize the government’s handling of the case while giving leeway to Manafort’s lawyers.

“It appears I may well have been wrong,” Ellis said as the trial went into its eighth day. “But like any human, and this robe doesn’t make me anything other than human, I sometimes make mistakes.”

Ellis had chastised prosecutors for allowing IRS agent Michael Welch to be in court before he testified on Wednesday, saying he did not like witnesses present before taking the stand. When prosecutor Uzo Asonye challenged Ellis, the judge barked: “Don’t do that again. When I exclude witnesses, I mean everybody.”

Prosecutors had told Ellis he had approved having Welch and other expert witnesses attend the proceedings, a point they repeated in a court filing on Thursday asking for a “curative instruction” to the jury to set the record straight.

Some lawyers watching the case also noted Ellis did not rebuke defense attorney Kevin Downing on Wednesday after he asked the government’s star witness Rick Gates whether he had told prosecutors about four extramarital affairs.

Downing had agreed in a bench conference on Tuesday not to raise the subject with Gates, a court transcript showed. Downing later argued it was fair game because Gates had volunteered that he had one affair after being asked about his “secret life.”

Ellis sustained an objection from the prosecution and Gates never answered the question about four affairs, but some observers said the damage had already been done.

“It was highly inappropriate to raise the other affairs, and the judge’s response was very generous,” said Gene Rossi, a former prosecutor who has been watching the trial. “In my experience, another judge would have cut his head off.”
Gates, who was indicted along with Manafort, pleaded guilty and is cooperating with an investigation by Special Counsel Robert Mueller.

BANK FRAUD

Manafort has pleaded not guilty to 18 felony charges of bank fraud, tax fraud and failing to disclose some 30 foreign bank accounts. He is the first person to be tried on charges brought by Mueller’s probe into Russian interference in the 2016 U.S. election.

Prosecutors said they plan to conclude their case on Friday. It is not clear whether Manafort will call any witnesses in his defense.

After wrapping up the tax portion of their case, prosecutors have moved on to bankers who were involved in extending Manafort loans during his scramble to generate cash in 2015 and 2016 after work dried up following a loss of business in Ukraine.

Melinda James, a mortgage assistant at Citizens Bank, testified Thursday that Manafort provided incorrect information in applying for a $3.4 million loan on a Manhattan condominium that was granted on March 4, 2016.
She said Manafort did not disclose that a brownstone he owned in Brooklyn had a mortgage against it and indicated the Manhattan condominium was a second residence, when it was listed for rent. Both moves improved the loan terms, James said.

Earlier this week Gates testified Manafort directed him to present banks with false documents, including an inflated profit report for Manafort’s consulting company, DMP International, LLC, to get the loans. Defense lawyers have made blaming Gates, Manafort’s right-hand man for a decade, a key plank of their defense.

Manafort lawyer Jay Nanavati appeared to make some progress toward that goal on Thursday. Under his cross-examination, James acknowledged it was Gates, using an old insurance document, who ultimately misled her about whether there was a mortgage on the brownstone days before the loan on the condominium closed.

Taryn Rodriguez, a loan officer assistant at Citizens Bank, testified about an application for a $5.5 million construction loan on the brownstone that was ultimately denied.

She said Manafort failed to disclose a multi-million dollar mortgage already taken out on the property and a $1 million business loan from the Banc of California, both of which would have affected any new loan. Rodriguez said she discovered the mortgage by researching a New York City database of property records.

Gary Seferian, a senior vice president at the Banc of California, said his bank gave Manafort the $1 million loan to rehabilitate and flip properties in the Los Angeles area, in part based on a financial statement for DMP International showing a profit of more than $4 million for 2015.

Prosecutor Uzo Asonye asked if Manafort would have qualified for the loan if he had known DMP’s profit for that year was in fact $400,000. “I don’t think so,”

http://www.reuters.com/article/us-usa-trump-cohen/r eview-of-materials-seized-from-trump-lawyer-cohen-wraps-up-idUSKBN1KU2P8

posted 08-11-2018 05:37 PM                  

The first two weeks of the trial of former Donald Trump presidential campaign chairman Paul Manafort on 18 counts of tax evasion and bank fraud charges have failed to implicate Trump or his campaign in any alleged criminal conduct.

Prosecutors working for Special Counsel Robert Mueller – who is investigating Russia’s interference in the 2016 presidential election – are expected to call their final witness Monday at Manafort’s trial in U.S. District Court in Alexandria, Virginia. If convicted on all counts, Manafort could face a maximum sentence of 305 years in prison.

So far we’ve learned that the prosecution’s star witness, former Manafort employee Rick Gates, is a liar, a serial adulterer and a thief who embezzled funds from Manafort.

And we’ve learned that Manafort is alleged to have evaded paying taxes on income that he and Gates earned through secret offshore bank accounts, shell companies and fraudulent bank loans.

But when it comes to the mandate given to Mueller on May 17, 2017, we’ve learned absolutely nothing. Mueller was charged with investigating “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump.”

But neither Gates nor any other witness at the Manafort trial has testified about the Russian election interference or any alleged collusion between the Trump campaign – or Trump himself – with the Russians.

Manafort was with the Trump presidential campaign for just under five months. That’s a tiny sliver of the long career of the 68-year-old.

All of the testimony at the Manafort trial has addressed events that occurred long before Manafort went to work for 2016 Trump campaign. The testimony has focused on Manafort’s and Gates’s activities as alleged “unregistered agents” representing the Ukrainian government starting in 2006.

It would be absurd to argue that Manafort’s other clients in the 12 years since then are somehow to blame for any criminal activity he may have engaged in – and prosecutors aren’t even trying to point the finger at President Trump for these activities.

Manafort’s lawyers claim that Gates was the actual wrongdoer, and they subjected him to a punishing cross-examination.

Under questioning, Gates was forced to admit that he lied to the investigators from the special counsel’s office; embezzled huge amounts of money from Manafort and prior employers; and used the stolen funds in part to pay for extramarital affairs and a “secret life” that included an apartment and a girlfriend in London.

Through their cross-examination, Manafort’s lawyers pushed the idea to the jury that Gates got accountants to falsify Manafort’s tax returns in order to cover up the embezzling. Gates’ fraud apparently included submitting fraudulent personal expenses to the Trump inauguration committee.

Prosecutors tried to counter this with testimony by an FBI forensic accountant, an Internal Revenue Service agent, and Manafort’s own accountant. The accountant testified under a grant of immunity that although she worked with Gates a lot, she believed Manafort “knew what was going on.”

At a prior hearing in this case, the presiding federal judge – the very colorful T.S. Ellis III – said that Mueller is prosecuting Manafort in part because he wants Manafort to “sing” – in other words, testify against President Trump on other unrelated matters.

Ellis said at the earlier hearing that Mueller set out to “turn the screws and get the information you really want” from Manafort. And that information, according to the judge, is what “Manafort can give you that would reflect on Mr. Trump and lead to his prosecution or impeachment.”

It is certainly possible that Gates has some kind of evidence relevant to the Russian collusion allegation that Mueller has not yet made public. And perhaps Manafort also has similar evidence.

But so far at least, Manafort has chosen not to cooperate with Mueller. There was a hint of this in the trial with regard to Gates after the judge issued an order on Thursday at the request of the government. The order sealed portions of a “sidebar” conference the lawyers had with the judge to avoid “revealing substantive evidence pertaining to an ongoing government investigation.”

If Gates is the one with this “secret” evidence against the Trump campaign, the government will face a severe witness-credibility problem, given his embarrassing admissions on the stand in the Manafort trial.

Moreover, Gates admitted that he was threatened with 290 years in prison by Mueller’s team –but was promised he could get off with just probation if he agreed to testify against Manafort. That certainly gives Gates an enormous incentive to allege criminal conduct by Manafort. It’s hard to believe that prosecutors would offer Gates a “get out of jail free card” if he testified that Manafort did nothing wrong.

If Manafort is found guilty of tax evasion and bank fraud, some will try to use his very brief association with the Trump campaign to tar the president. But such criticism would ignore two crucial facts.

First, presidential campaigns are not law enforcement agencies. They have neither the capacity nor the resources to do detailed background investigations on the thousands of individuals who volunteer to work with a campaign.

Second, Manafort appeared to be a successful, ethical businessman. Even the government – including the IRS, the FBI and our intelligence agencies – had no idea that he was allegedly engaging in any wrongdoing for a foreign government through an elaborate scheme of offshore bank accounts and shell companies, until Mueller’s office started investigating him.

In an odd point in the trial, Gates testified that he and Manafort actually told the FBI about their offshore bank accounts in Cypress back in 2014. At the time, the FBI was investigating the former Ukrainian president. Gates and Manafort disclosed the accounts to the agent, because that is how the Ukrainian government paid them.

Yet the FBI apparently did nothing about this and did not notify the IRS. There has been no explanation from the government as to why it took no action at that time.

And surely the Trump campaign cannot be legitimately criticized for not knowing, as the federal government did not know, what Manafort and Gates were supposedly doing vis a vis their personal finances and income tax liability.

The bottom line is this: The Manafort trial is about alleged criminal activity by Manafort and Gates. If Manafort had not spent less than five months working as a volunteer on the Trump presidential campaign he might never have even been charged with a crime.

However, Manafort’s short time in a high-visibility role with the campaign placed all his past activities – having nothing to do with Donald Trump – under the microscope.

In the unlikely event Manafort had been charged with the same crimes but had never joined the Trump campaign his trial would no doubt have attracted only a small amount of media attention. Only his association with Trump has turned his trial into a major news story.

The Manafort trial is complicated. It is receiving enormous news coverage. Most Americans don’t have the time or interest to follow every detail on a daily basis. So it’s understandable that many people assume the trial has something or other to do with President Trump and his campaign.

But that assumption is a mistake. Whether you support President Trump or oppose him, the simple and indisputable fact is that nothing in the Manafort trial so far has revealed any evidence of collusion with Russia or any other misconduct by President Trump or his campaign.

This trial is about Paul Manafort and Rick Gates – not Donald Trump.

Hans A. von Spakovsky is a Senior Legal Fellow at The Heritage Foundation.