Manafort Trial Turns to Tax Returns Mueller Says Are Phony

Paul Manafort former campaign manager for President Trump exits from federal court in Washington earlier this year.
Bloomberg  Al Drago

The most anticipated testimony is by Rick Gates, who is both a former business partner of Manafort's and also was deputy chairman for Trump's 2016 presidential campaign. Manafort was aware of the reported loan, which served to reduce his income, she said.

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"It was not appropriate", Ms. Laporta said.

Asked whether the money in the accounts was income to Manafort, Gates said, "it was". "But then they were longtime clients of the firm and I did not want to do that either".

Said Republican Senator John Thune for South Dakota: "They ought to let them conclude their work".

Washkuhn also detailed how after Manafort's political consulting money from Ukraine stopped coming in, around 2015, he and his company began piling up debt and financial woes.

Mr Manafort signed an agreement to account for that loan that was backdated, according to Ms Laporta and an exhibit shown to the jury. Washkuhn told jurors about a series of emails she sent him in 2016 warning that he was behind on his payments, including to her. Assistant U.S. Attorney Uzo Asonye asked Laporta on Friday afternoon.

As he did on Wednesday, U.S. District Judge T.S. Ellis warned prosecutors against focusing too much on Manafort's lifestyle.

"Did you have concerns about representation you received about these foreign loans?"

To this point, neither President Trump nor Russian Federation, nor any connection between the Trump administration and Russia's involvement in the election, have been mentioned.

Manafort's defense lawyer Thomas Zehnle made it clear in his opening statement that his team was going to attempt to pin the financial crimes Manafort is accused of on Gates, who is cooperating with investigators after entering a guilty plea in February.

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But Laporta's testimony raised the stakes for Manafort.

Two witnesses - an executive at an upscale clothier and a retired general contractor - testified on Wednesday that invoices purporting to be bills from their companies to a company tied to Manafort appeared to be fake. As part of this email chain, O'Brian allegedly wrote "The loan amount may need to be changed". It's the first courtroom test of Mueller's team, which is tasked with looking into Russia's efforts to interfere with the US election and whether the Trump presidential campaign colluded with Moscow to sway voters.

Federal Savings Bank ultimately loaned to DMP when its executive Stephen Calk sought a Trump campaign position. In his brief appearance late Thursday, the former accountant, Philip Ayliff, told jurors about preparing Manafort tax forms that asked whether Manafort had any financial interest in foreign accounts.

Ayliff says he sometimes communicated with Gates about Manafort's personal and business tax returns. Manafort claims that Gates embezzled millions of dollars from his political consulting business. They allege Manafort is a victim of Gates' illegal activity.

And if Manafort did indeed open those accounts, that inherently means he knew they existed - and that he failed to report them to his tax preparers.

"Rick Gates is a double-edged sword", said Mintz.

Paul Manafort (right) and his lawyer, Kevin Downing, arrive at the federal courthouse for a motion hearing./Victoria Pickering (Flickr).

"We have absolutely put him on the witness list", prosecutor Greg Andres said before the jury entered the courtroom this morning.

Washkuhn testified on Thursday that she had no idea any of those entities were owned or controlled by Manafort. Classifying the property as a personal residence would have made it easier to obtain the mortgage at a low rate. Gates is the prosecution's star witness and is expected to testify against Manafort early next week.

Prosecutors pivoted midweek from what Manafort bought and how he bought it to what they see as his efforts to avoid paying taxes when things were good and lying to banks about his income when things went south.

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