Manafort Found Guilty of Bank, Tax Fraud in First Trial Win for Mueller
U.S. District Judge T.S. Ellis declared a mistrial on the 10 remaining counts after polling the jury.
August 21, 2018 at 04:47 PM
6 minute read
Paul Manafort, the former chairman of President Donald Trump's campaign, was found guilty Tuesday of tax and bank fraud, along with failing to disclose foreign bank accounts, a verdict that handed the special counsel a conviction in the first trial to emerge from its investigation into Russian interference in the 2016 election.
A jury of six men and six women deliberated for four days before convicting Manafort on eight of 18 criminal counts alleging he hid money in overseas bank accounts, avoided paying U.S. taxes and defrauded banks in pursuit of loans. U.S. District Judge T.S. Ellis III of the Eastern District of Virginia declared a mistrial on the 10 remaining counts after polling the jury, with each of its members indicated that further deliberations would not resolve differences among the jurors.
Manafort stood facing the jury, flanked by his defense lawyers, as the verdict was read aloud. He was found guilty on five counts of filing false tax returns, two counts of bank fraud and a single count of failing to file a so-called FBAR disclosure of a foreign bank account. The jury could not reach a consensus on any of the conspiracy charges against Manafort, a once-venerated political consultant who advised Republican luminaries, including former President Ronald Reagan.
Leaving the courthouse, Manafort's lead defense attorney, Kevin Downing thanked Ellis for granting a “fair trial,” and the jurors “for their very long and hard-fought deliberations.”
“You may have heard that the jury reached a verdict on only eight of the 18 counts. On 10 of those counts they did not reach a verdict. Mr. Manafort is disappointed of not getting acquittals all the way through or a complete hung jury on all counts,” Downing said, adding that Manafort is “evaluating all of his options at this point.”
After reading the verdict, Ellis asked jurors if they wanted their names to remain confidential. The jury replied yes, prompting the judge to say, “I will do so.” On Aug. 17, Ellis denied a request from several media outlets to release the jurors' names, citing concerns for their safety.
Once jurors left, Ellis announced to the courtroom and Manafort that he will order the preparation of a presentence report. He also asked the government to address what it “intended” to do with the 10 counts he declared a mistrial on. Prosecutors said they would notify the court within a week.
One of Manafort's defense attorneys, Richard Westling, also asked the judge if he would permit an extended period of 30 days to file any motions for acquittal or a new trial. Special counsel lead prosecutor Greg Andres said he did not see any immediate objection to that, but would file with the court if one did arise. Ellis said he would refrain from ruling on that extension, though he indicated he agreed he saw no immediate problems with it.
Preparing to leave the courtroom, lawyers exchanged handshakes with the opposing counsel they had spent weeks fighting in court. Andres and Downing both patted the other's arms.
Through a two-week trial, prosecutors painted Manafort as a liar who had cheated the U.S. government out of taxes owed on his income from political consulting in Ukraine. Once that income stream dried up, prosecutors argued, he submitted false information to banks as he pursued loans to prop up a lavish lifestyle of high-end suits, luxury cars and manicured lawns.
“Mr. Manafort lied to keep money when he had it and he lied to get more money when he didn't,” the lead prosecutor, Andres, told jurors in his closing argument Aug. 15. “This is a case about Mr. Manafort and his lies.”
Through 10 grueling days of witness testimony, prosecutors portrayed Manafort as a man who has placed himself above the law, documenting through an extensive paper trail how Manafort hid his foreign income to evade taxes. Heather Washkuhn, Manafort's bookkeeper, told jurors that she was never told of his 31 overseas bank accounts, while Manafort's tax preparer testified to turning a blind eye when Manafort disguised $1.5 million in taxable foreign income as a loan.
Prosecutors often faced pushback from Ellis, who frequently needled lawyers to speed up their case, and accused them of trying to “gild the lily” as they tried to show the jury emblems of Manafort's big spending. “Mr. Manafort is not on trial for having a lavish lifestyle,” Ellis told prosecutors as he denied one attempt to display a photograph to jurors.
All the while, defense attorneys sought to undo prosecutors' arguments by pinning the blame of mishandled money on Manafort's longtime associate, Rick Gates. Casting him as deceitful, sneaky and untrustworthy to jurors, Downing captured the courtroom when, in a cross-examination, he knocked Gates for engaging in four extramarital affairs. But in the end, the defense's efforts to undercut Gates' credibility did not sway the jury.
Manafort, the first defendant in a Robert Mueller case to go to trial, was first indicted in the Eastern District of Virginia in February.
A longtime political lobbyist and consultant who has advised four presidential runs, he briefly chaired President Donald Trump's 2016 campaign from June to August 2016.
Trump, after arriving in Charleston, West Virginia, for a rally Tuesday, called the verdict “very sad.” He added it had “nothing to do with Russian collusion.
The judge thanked jurors following the verdict and praised lawyers on both sides for their “very effective and zealous” representation in the case.
“That isn't a statement I can make as often as I'd like,” he said.
In a parting nod to the national media attention the trial attracted, including the judge's colorful and at times controversial comments, Ellis joked he would be “careful about Caesar in my own Rome in the future.”
Manafort still faces another trial next month in Washington, D.C., on charges of money laundering, conspiring to obstruct justice, and failing to disclose his past lobbying work for the Russia-backed government of Ukraine. The trial, should it go forward, will feature a rare prosecution under the Foreign Agents Registration Act, a 1938 law that was drafted to expose Nazi propaganda efforts.
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