Alexandria, US: Paul Manafort, US President Donald Trump's former campaign chairman, was convicted Tuesday in his financial fraud trial, bringing a dramatic end to a politically charged case that riveted the capital.
The verdict was a victory for the special counsel, Robert Mueller, whose prosecutors introduced extensive evidence that Manafort hid millions of dollars in foreign accounts to evade taxes and lied to banks repeatedly to obtain millions of dollars in loans.
Manafort was convicted of five counts of tax fraud, two counts of bank fraud and one count of failure to disclose a foreign bank account. The jury was unable to reach a verdict on the remaining 10 counts, and the judge declared a mistrial on those charges.
Kevin Downing, a lawyer for Manafort, said that the defense was "disappointed" by the verdict and that his client was "evaluating all of his options at this point.
Peter Carr, a spokesman for Mueller's office, declined to comment
The verdict was read out in US District Court in Alexandria, Virginia, only minutes after Michael Cohen, Trump's former fixer, pleaded guilty in federal court in Manhattan to violating campaign finance law and other charges.
Cohen says Trump told him to break law
Cohen made the extraordinary admission that he paid a pornographic film actress "at the direction of the candidate," referring to Trump, to secure her silence about an affair she said she had with Trump.
Manafort's trial did not touch directly on Mueller's inquiry into Russian interference in the 2016 election or on whether Trump has sought to obstruct the investigation.
But it was the first test of the special counsel's ability to prosecute a case in a federal courtroom amid intense criticism from the president and his allies that the inquiry is a biased and unjustified witch hunt. And the outcome had substantial political implications, if only in denying Trump more ammunition for his campaign to discredit Mueller.
Before and during the trial, Trump both sought to defend Manafort as a victim of prosecutorial overreach and to distance himself from him, saying that Manafort had worked for him only relatively briefly.
After the verdict was announced, Trump said he felt "very badly" for Manafort and continued to maintain that the prosecution had been politically motivated.
"It doesn't involve me," Trump told reporters after landing in West Virginia for a rally Tuesday evening. "It had nothing to do with Russian collusion."
The trial focused on Manafort's personal finances, in particular the tens of millions of dollars he made advising a political party in Ukraine that backed pro-Russia policies.
Defense lawyers had argued that Rick Gates, Manafort's former right-hand man and the government's star witness, was the real mastermind of the frauds. Gates had been charged along with Manafort in the case but pleaded guilty and agreed to testify against Manafort in exchange for the dismissal of a host of other charges and the possibility of a more lenient sentence.
The defense lawyers also suggested that Manafort had been targeted by prosecutors to pressure him into cooperating with Mueller's inquiry into possible collusion by the Trump campaign with Russia in the 2016 election.
'Manafort lied to keep more money'
In his summation last Wednesday, Greg Andres, the lead prosecutor, told the jurors that the essence of the scheme was not complicated. "Mr. Manafort lied to keep more money when he had it, and lied to get more money when he didn't," he said.
Manafort faces a second criminal trial next month in Washington on seven other charges brought by the special counsel, including obstruction of justice, failure to register as a foreign agent and conspiracy to launder money.
The trial in Alexandria drew lines of spectators that wound around the courthouse and was punctuated by moments of high drama. It examined in some detail Manafort's sumptuous lifestyle, including his $15,000 ostrich-skin jacket and $1,500 dress shirts, and the meticulously landscaped flower bed in the shape of a giant "M" at his 10-bedroom Hamptons estate in New York.
Gates, who was on the stand far longer than any other witness, appeared confident when questioned by prosecutors. But his credibility came under assault during cross-examination by defense lawyers, who questioned him about his "secret life" with a paramour in a London flat.
Andres and Judge T.S. Ellis III, who presided over the trial, butted heads repeatedly. Andres complained that the judge interrupted every time the prosecution questioned a witness. Ellis responded that Andres was so frustrated that he appeared on the verge of tears, which Andres denied.
As the prosecution wound up its case last week, the proceedings suddenly ground to a mysterious halt, raising hopes among Manafort's allies that the judge might declare a mistrial. But after hours of secret discussions between the judge and the lawyers for both sides, the trial resumed.
Andres argued that the evidence of Manafort's guilt was contained in documents that he himself wrote or signed and sent to his accountants, to loan officers and to Gates. While Gates was "no Boy Scout," Andres said, his account was buttressed by other witnesses, including Manafort's tax accountant.
Testifying under a grant of immunity, the accountant, Cynthia Laporta, said that she forwarded documents from Manafort to bank loan officers even though she believed they were false.
The defense said that Manafort had foolishly trusted Gates to handle his personal and business finances, and had relied on a phalanx of accountants and loan officers to flag serious mistakes in his financial filings.
Only after investigators from the special counsel's office began "going through each piece of paper and finding anything that doesn't match up to add to the weight of evidence against Mr. Manafort" did the discrepancies come to light, said Richard Westling, one of Manafort's five lawyers.
Using multicolored flow charts in an attempt to simplify complex transactions, prosecutors tried to show that Manafort concealed more than $60 million in income in 31 foreign bank accounts opened in the names of shell companies.
The money came from Ukrainian oligarchs who paid Manafort to boost the political career of Viktor Yanukovych, a pro-Russian politician who, with Manafort's help, was elected president of Ukraine in 2010.
Financial analysts for the FBI and the Internal Revenue Service testified that Manafort transferred more than $15 million from those accounts to pay for landscaping, clothing, rugs, home renovations and entertainment systems. In 2012 alone, he wired enough money from the hidden accounts to purchase a loft in New York's SoHo, a brownstone in Brooklyn and a residence in Arlington, Virginia, they said. Manafort also disguised some of his income as loans to avoid taxes, witnesses testified.
Prosecutors claimed that Manafort initiated another scheme after Yanukovych was forced out of office in 2014.
Defense lawyers acknowledged that Manafort had no income by the time the Trump campaign hired him in March 2016 as a volunteer, first to manage delegates to the Republican National Convention, then as campaign chairman. Still, he bought his annual season tickets to the New York Yankees, charging $210,600 to his American Express card that went unpaid for nearly a year.
In order to persuade three banks to loan him a total of $20 million, prosecutors said, Manafort added millions of dollars in fake income to his financial statements. Defense lawyers contended that the banks were well aware of Manafort's overall financial situation, and gave him loans because he had a net worth of $21.2 million and valuable real estate as collateral.
Out of the jury's earshot, Andres complained repeatedly to Ellis that he was erecting unfair obstacles for the prosecution, interjecting when they tried to examine their witnesses on the stand. "The court interrupts every single one of the government's directs, every single one," he said.
The judge had criticized independent counsels this year, apparently conflating them with special counsels like Mueller, who operates under the supervision of the Justice Department. By the midpoint of the trial, he was markedly more polite to the prosecutors. He agreed to apologize to the jury for wrongly accusing them of making a courtroom mistake with a key witness.
Manafort's lawyers said the prosecutors were engaging in overkill. "They had already thrown the kitchen sink at him," one of them, Thomas Zehnle, told the judge at one point. "Now they are throwing the plumbing and the pipes."
Without directly accusing the prosecutors of selective prosecution, they tried throughout the trial to sow doubt about their intentions. At the government's request, Ellis instructed the jury to "ignore any argument about the Justice Department's motive or lack of motive," a last-minute warning that might only have underscored the question.
