Paul Manafort was found guilty of fraud by a federal jury in Alexandria, Virginia, on Tuesday in a bombshell verdict which puts pressure on Donald Trump, whose campaign he once ran.
The jury found Manafort guilty of eight counts of bank and tax fraud, which could send the former Trump campaign manager to prison for the rest of his life.
He had been charged with a total of 18 counts of fraud. The jury is deadlocked on the other 10
The government has recommended to the court anywhere between eight to 10 years in prison for falsifying tax returns, bank fraud conspiracy and failure to file reports of foreign bank and financial records.
The conviction is the first major court victory for Robert Mueller’s special counsel investigation into the Trump campaign and Russian election tampering, a probe that has divided Americans and come under attack from the White House.
The jury’s verdict defies Donald Trump, who last Friday called Manafort ‘a very good person’ and the trial ‘said’.
It is also a stunning fall from grace for the jet-setting political consultant, who once spent $15,000 on an ostrich jacket and millions on high-tech gear for his Hamptons home, but now faces the rest of his life in a jail cell.
He will be sentenced by Judge T.S. Ellis after background reports and argument from both prosecution and defense over what sentence is appropriate.
But he will remain behind bars regardless ahead of a second trial next month in Washington D.C. at which Manafort will try to fight charges that he failed to register as a foreign agent.
The judge in that trial had put kept in custody over allegations of witness tampering – meaning that Manafort attended the trial from custody each day.
The verdict will likely increase pressure on the White House, which has called on Mueller to shut down the investigation by September 1.
It could lead to a pardon for Manafort from Trump – but the president had also distanced himself from the lobbyist during the trial, saying he should have been told about his tax issues. It is almost certain to lead to further angry reaction from Trump to the Mueller probe.
Key case: Paul Manafort, a one-time Trump campaign chairman, was found guilty at the end of a trial presided over by U.S. District Judge T.S. Ellis III. Ellis will sentence Manafort, 69, after background reports and recommendations from both sides
Present in court: Kathleen Manafort was present to see her 69-year-old husband found guilty by the jury. She had been in court for every minute of his trial
Lavish lifestyle: The government case was that Paul Manafort lied to first the IRS and then to banks to fund spending which included a now notorious $15,000 ostrich jacket. A guilty verdict is a major victory for Robert Mueller’s special counsel probe
A CNN poll found that two-thirds of Americans would like Mueller to conclude the investigation before the midterm elections, and Trump allies such as Rudy Giuliani claim the special counsel has a legal obligation to do so.
But some legal experts have disputed this, and Mueller has shown no sign of slowing down.
In addition to Manafort’s conviction, his team has already secured five guilty pleas and issued 30 indictments. Their targets in the U.S. include former Trump campaign aides and abroad, they include alleged Russian agents.
Trump has publicly vacillated on how to deal with Manafort, tweeting in the course of the trial first that Manafort ‘worked for Ronald Reagan, Bob Dole and many other highly prominent and respected political leaders.
‘He worked for me for a very short time. Why didn’t government tell me that he was under investigation.’
But later in the same day he tweeted: ‘Looking back on history, who was treated worse, Alfonse Capone, legendary mob boss, killer and ‘Public Enemy Number One,’ or Paul Manafort, political operative & Reagan/Dole darling, now serving solitary confinement – although convicted of nothing? Where is the Russian Collusion?’
Manafort spent the run-up to the trial in prison and was brought to court every day for the hearing. His wife Kathleen was present for every minute of it but he was warned not to turn round to her from his seat beside his attorneys.
Prosecutors laid out a meticulously detailed, document-heavy case against Manafort, 69, during the two-week trial which focused on his lies over money which funded a lavish lifestyle.
‘Mr. Manafort lied to keep more money when he had it, and to get more money when he didn’t,’ prosecutor Greg Andres told the jury in his closing statement on Wednesday.
Prosecutors connected Manafort to at least 30 undisclosed offshore companies where they said he stashed $60 million in political consulting fees from his Ukrainian clients, evading taxes on $15 million.
Although Manafort failed to disclose this money to the IRS or his own tax preparers, he used it to fund his extravagant lifestyle, witnesses told the court.
Two luxury menswear retailers testified that Manafort spent over $1.5 million on custom suits and bespoke clothing between 2010 and 2014, often paying by foreign bank wire transfers
His purchases included a python jacket, a $15,000 ostrich coat, and a $21,000 on a limited edition, black titanium and crystal watch from the House of Bijan, known as the ‘most expensive men’s store in the world.’
Joel Maxwell, the owner of a Florida electronics company, told the court that Manafort paid him over $2 million over five years for electronic equipment, including internet and TV systems.
Campaign role: Paul Manafort chaired Trump’s campaign for four months – which included the Republican National Convention in Cleveland in 2016, where he appeared on stage beside Trump who was preparing to formally accept the Republican nomination
Ukraine business: Paul Manafort’s work for pro-Russian Ukrainian president Viktor Yanukovych was a ‘cash spigot’ which turned off when he was deposed in 2014. Manafort’s deputy Rick Gates was involved in the Ukraine advisory work but turned against him and became the star witness at the trial – admitting to himself pilfering from Manafort and having a long-term mistress
Flip-flop: How Manafort’s trial played out in the course of one day on Trump’s twitter feed. Manafort may now look to his old boss for a presidential pardon – which would set off a fresh firestorm. Trump called him ‘a very good person’ last Friday while the jury deliberated
That included an $18,000 karaoke machine and specialty TV screen from the New York-based luxury audio visual company Sensoryphile.
Michael Regolizio, a landscaper, testified that Manafort paid him around $460,000 from 2010 to 2014 on landscaping and lawn maintenance for his Bridgehampton home.
Regolizio said Manafort’s palatial 1.5.-acre Hamptons estate featured an enormous red-and-white flower bed in the shape of an ‘M’ for ‘Manafort.’
The property also included a tennis court with ‘hundreds of flowers planted’ around it and a pond with a massive waterfall feature, according to Regolizio.
Manafort wired the payments from accounts in Cyprus, witnesses testified.
From 2010 to 2014, millions of dollars flowed into Manafort’s bank accounts from his political consulting clients in Ukraine. But the money dried up after his main patron, former Ukrainian President Viktor Yanukovych, was ousted from power in 2014.
Manafort’s extravagant spending habits left him unable to pay even basic bills such as medical insurance, according to testimony from his personal bookkeeper Heather Washkuhn.
Washkuhn, said Manafort became delinquent on many of his bills around 2015 and didn’t have enough money in his accounts to cover them.
He was also unable to pay a $200,000 American Express bill that he racked up by purchasing season tickets to the Yankees, according to prosecutors.
Washkuhn noted that on a few occasions Manafort also failed to pay her own bookkeeping fees – which she said were about $100,000 per year.
According to prosecutors, Manafort’s desperation for money led him to file false financial information with banks, in his effort to secure $20 million in loans.
Prosecutors said Manafort spent at least $6 million of his hidden offshore money on properties in New York and Florida.
This included extensive renovations at his $1.5 million home at the BallenIsles Country Club in Palm Beach and his mansion in Bridgehampton. Manafort also purchased a $3 million Brooklyn brownstone and a $2.8 million loft in SoHo, in addition to the 5-acre horse farm and condo he owned in northern Virginia.
In one of Manafort’s loan applications, he claimed his daughter Jessica and son-in-law Jeffrey Yohai used the SoHo apartment as a second home. But prosecutors said the couple didn’t actually live there and was renting the apartment out on AirBnB.
Yohai, a real estate developer who is now divorced from Manafort’s daughter, pleaded guilty earlier this year to unrelated federal crimes.
In late 2015, Manafort’s financial situation was so dire that his personal book keeper, Heather Washkuhn, was forced to ask Yohai for money from the AirBnB rental to cover Manafort’s delinquent bills.
His tax and bank fraud schemes were aided by his deputy Rick Gates, who pleaded guilty to lying to investigators earlier this year and cooperated with prosecutors on the case.
Family affair: Paul Manafort emailed his then son-in-law Jeff Yohai – who was married to Manafort’s daughter Jessica – to ask him to tell a bank that the couple lived in the SoHo apartment as a second home when it was actually on AirBnb
Property empire used for fraud: Paul Manafort owned a loft in this SoHo, Manhattan, building (left) which he bought for $2.8 million and this $3 million Brooklyn brownstone (right) in upscale Carroll Gardens. He lied about the financial status of both as he tried to get loans when his ‘cash spigot’ was turned off
Lavish: Michael Regolizio, a landscaper, testified that Manafort paid him around $460,000 from 2010 to 2014 on landscaping and lawn maintenance for his Bridgehampton home. But the money was wired from a foreign bank account which Manafort never declared to the Treasury
Make me treasury secretary: Steve Calk (left) wanted an executive at his bank to ask Manafort for help to get a Trump cabinet position. He had posed with the then candidate before the election but sought to enlist Manafort’s aid after also pushing the executive to give the lobbyist loans. When Manafort emailed Jared Kushner about getting Calk a job, Kushner replied: ‘On it’
Gates testified against Manafort for three days, claiming Manafort directed him to hide millions of dollars in offshore accounts from U.S. tax collectors and to submit false financial information to banks in order to collect fraudulent loans.
‘At Mr. Manafort’s request at different points in the years we didn’t disclose the foreign bank accounts [to accountants],’ said Gates.
‘That was in order to reduce the taxable income on [Paul Manafort’s] tax returns,’ he said.
Gates – who also admitted to embezzling hundreds of thousands of dollars from Manafort while carrying out an extramarital affair with a woman in London – faces up to 10 years in prison for obstruction of justice, although he
Manafort’s defense team countered that Special Counsel Robert Mueller had targeted Manafort in a ‘desperate’ attempt to convict the former Trump aide.
They also claimed that Gates was actually responsible for the tax and bank fraud, but pinned the crimes on Manafort to deflect from the fact he was stealing millions from his boss.
‘The government – so desperate to make a case against Mr. Manafort – made a deal with Rick Gates,’ said Manafort’s attorney Kevin Downing. ‘Mr. Gates was orchestrating a multi-million dollar embezzlement scheme.’
New details that emerged during the trial are also likely to increase scrutiny on the Trump administration and raise questions about potential influence peddling.
Prosecutors revealed that Manafort asked Trump officials to give an administration job and other political perks to the CEO of a bank where he was trying to get a $16 million loan.
Manafort emailed Donald Trump’s son-in-law Jared Kushner to recommend that Trump appoint Stephen Calk, the head of Federal Savings Bank, as secretary of the army.
The November 30, 2016 email – which was sent shortly after Manafort received the first part of his loan from the bank – was submitted as evidence in the case.
‘Calk was an active supporter of the campaign since April. HE served on the National Economic Policy Committee for Trump campaign and has made over 40 television interviews during the course of the General Election,’ wrote Manafort. ‘His background is strong on defense issues, management and finance. His preference is Secretary of the Army.’
Kushner wrote back to Manafort: ‘On it!’
After the election, Manafort also emailed Gates – who was working on Trump’s inauguration committee at the time – to ask him to get Calk and his son an invitation to the presidential inauguration.
Gates admitted in his testimony that during this time it was ‘possible’ he also embezzled money from the Trump inauguration committee – raising additional questions about the committee’s finances.
THE ROBERT MUELLER PROBE SO FAR: FIVE OTHER GUILTY PLEAS, ONE JAILED ATTORNEY AND 25 RUSSIANS ACCUSED
GUILTY: MICHAEL FLYNN
Pleaded guilty to making false statements in December 2017. Awaiting sentence
Flynn was President Trump’s former National Security Advisor. He previously served when he was a three star general as President Obama’s director of the Defense Intelligence Agency but was fired.
He admitted to lying to special counsel investigators about his conversations with a Russian ambassador in December 2016. He has agreed to cooperate with the special counsel investigation.
GUILTY: RICK GATES
Pleaded guilty to conspiracy against the United States and making false statements in February 2018. Awaiting sentence
Gates was Manafort’s former deputy at political consulting firm DMP International. He admitted to conspiring to defraud the U.S. government on financial activity, and to lying to investigators about a meeting Manafort had with a member of congress in 2013. As a result of his guilty plea and promise of cooperation, prosecutors vacated charges against Gates on bank fraud, bank fraud conspiracy, failure to disclose foreign bank accounts, filing false tax returns, helping prepare false tax filings, and falsely amending tax returns.
GUILTY: GEORGE PAPADOPOLOUS
Pleaded guilty to making false statements in October 2017. Awaiting sentence
Papadopoulos was a member of Donald Trump’s campaign foreign policy advisory committee. He admitted to lying to special counsel investigators about his contacts with London professor Josef Mifsud and Ivan Timofeev, the director of a Russian government-funded think tank.
He has agreed to cooperate with the special counsel investigation.
GUILTY: RICHARD PINEDO
Pleaded guilty to identity fraud in February 2018. Awaiting sentence
Pinedo is a 28-year-old computer specialist from Santa Paula, California. He admitted to selling bank account numbers to Russian nationals over the internet that he had obtained using stolen identities.
He has agreed to cooperate with the special counsel investigation.
GUILTY AND JAILED: ALEX VAN DER ZWAAN
Pleaded guilty to making false statements in February 2018. He served a 30-day prison sentence earlier this year and was deported to the Netherlands upon his release.
Van der Zwaan is a Dutch attorney for Skadden Arps who worked on a Ukrainian political analysis report for Paul Manafort in 2012.
He admitted to lying to special counsel investigators about when he last spoke with Rick Gates and Konstantin Kilimnik.
CHARGED: KONSTANTIN KILIMNIK
Indicted for obstruction of justice and conspiracy to obstruct justice.
Kilimnik is a former employee of Manafort’s political consulting firm and helped him with lobbying work in Ukraine. He is accused of witness tampering, after he allegedly contacted individuals who had worked with Manafort to remind them that Manafort only performed lobbying work for them outside of the U.S.
He has been linked to Russian intelligence and is currently thought to be in Russia – effectively beyond the reach of extradition by Mueller’s team.
INDICTED: THE RUSSIANS
Twenty-five Russian nationals and three Russian entities have been indicted for conspiracy to defraud the United States.
Two of these Russian nationals were also indicted for conspiracy to commit wire fraud and 11 were indicted for conspiracy to launder money. Fifteen of them were also indicted for identity fraud.
Vladimir Putin has ridiculed the charges. Russia effectively bars extradition of its nationals. The only prospect Mueller has of bringing any in front of a U.S. jury is if Interpol has their names on an international stop list – which is not made public – and they set foot in a territory which extradites to the U.S.
POLITICS, SEX, AND LIES: THE RISE AND FALL OF PAUL MANAFORT
In the span of just two years, Paul Manafort has gone from one of Washington’s most sought-after Republican lobbyists to a political pariah – something the outcome of his trial will barely change.
It has been a long fall from grace for the 69-year-old former Trump campaign manager, the son of a small-town mayor who went on to work for four U.S. presidents and made his fortune as the Washington mouthpiece for some of the world’s most notorious dictators.
Today Manafort has few defenders in the nation’s capital, after being charged with tax fraud and failing to register as a foreign agent by special counsel Robert Mueller.
Even Manafort’s former boss, President Trump, claimed he never would have hired the former lobbyist if he had known about the allegations.
‘Paul Manafort came into the campaign very late and was with us for a short period of time (he represented Ronald Reagan, Bob Dole & many others over the years), but we should have been told that Comey and the boys were doing a number on him, and he wouldn’t have been hired!’ wrote Trump in a Twitter post in June.
The power brokers: Paul Manafort, his future business partners Roger Stone and Lee Atwater, were photographed as young Republican operatives. Stone, a Trump confidante and notorious political dirty trickster is now fighting off the Mueller probe himself; Atwater died in 1991, a former RNC chairman with a reputation for dirty campaigns. All three cashed in on their political work by lobbying those they got elected
Manafort, the grandson of an Italian immigrant, was raised in a staunch Republican home in New Britain, Connecticut.
When he was 16, his father Paul John Manafort Sr. was elected mayor of New Britain and served for three terms.
In 1981, Manafort Sr. was indicted – but later acquitted – on perjury charges in a sweeping city corruption and bribery scandal that also ensnared the police and fire chiefs.
After Catholic parochial schools and graduating from Georgetown University Law School, Manafort went on to work as an advisor for Republican Presidents Gerald Ford.
He served as an advisor to Ronald Reagan, George H.W. Bush and Bob Dole’s presidential campaign.
But he – and his business partners – worked out how to turn political advising into a gusher of cash: by lobbying the very politicians they had helped elect.
He co-founded a prominent lobbying firm with ex-Nixon aide Roger Stone, and other partners, which shopped their access to top Republicans to U.S. businesses, state and city governments, and anyone who would pay.
That came to embrace the wider world too; the Manafort lobbying roster included brutal regimes willing to pay high fees for his services – including Filipino dictator Ferdinand Marcos and Zaire military leader Mobutu Sese Seko.
Betrayed: Kathleen Manafort stood by her husband despite his family finding proof of his mistress on Instagram; she attended every minute of his trial
Manafort went on to found his own political consulting firm in 2005, bringing on his former intern Rick Gates as his trusted deputy.
He also continued to take on controversial clients. In 2010, Manafort helped elect Ukrainian President Viktor Yanukovych, head of Ukraine’s Putin-allied Party of Regions.
The victory paid off – between 2010 and 2014, federal investigators said Manafort’s firm earned ‘a cash spigot’: $60 million in fees from the Party of Regions’ political patrons.
According to prosecutors, Manafort stashed the funds away in a series of offshore bank accounts and shell companies, and failed to disclose the income in his tax returns. In total, they claim he dodged taxes on $15 million.
But after Yanukovych was voted out of power by Ukraine’s parliament in 2014, Manafort’s fortunes suddenly changed. He stopped getting payments from Yanukovych’s wealthy oligarch supporters, and started to have trouble paying his bills.
This is when prosecutors claim Manafort started applying for loans using phony financial information. In total, they said he scammed banks out of $20 million.
Manafort’s alleged crimes were uncovered during the course of a special counsel investigation led by Robert Mueller, who has been investigating potential Russian interference in the 2016 election and collusion with the Trump campaign.
In addition to the tax and bank fraud trial in Alexandria, Virginia, Manafort also faces additional counts of failing to register as a foreign agent for his Ukraine work. That trial is set to take place in Washington, D.C.
Even before the charges were filed against him, Manafort’s personal life had been unravelling, according to years of hacked text messages between his daughters Andrea, 32, and Jessica, 36, that were posted online.
According to the messages, Manafort’s family had caught him having an affair with a woman who was around the same age as his daughters, renting a pricy house for her in the Hamptons and paying her credit card bill.
They discovered the affair after seeing the woman’s posts boasting about her expensive travel and dinners on Instagram.
Manafort, who was undergoing an emotional breakdown according to the messages, committed himself to a psychiatric clinic in Arizona in 2015.
Texts: Manafort’s daughters Jessica (left, with now ex-husband Jeff Yohai) and Andrea (right with husband Christopher Shand) exchanged text messages which were hacked revealing his affairs and calling him a psychopath.
Fruits of lobbying: This is the condo overlooking the Potomac where the FBI raided Manafort on orders from Mueller. He bought it for $2.75 million, part of a property empire worth conservatively $15 million
After he was released in 2016 – claiming he had ‘new insight’ into himself – he linked up with the Trump campaign and became the candidate’s campaign manager during the crucial months surrounding the Republican National Convention.
His daughter Andrea took a different view of that.She wrote in a leaked text to a friend, who was not named in the leak: ‘Trump probably has more morals than my dad. Which is really just saying something about my dad. My dad is a psycho!!! At least trump let his wives leave him. Plus, Trump has been a good father.’
And she also texted: ‘Trump waited a little too long in my opinion, but I can attest to the fact that he has now hired one of the world’s greatest manipulators. I hope my dad pulls it off. Then I can sell my memoir with all his dirty secrets for a pretty penny.’
Despite the clearly unhappy family, Manafort’s wife Kathleen stood by him in the face of his infidelity.
She also loyally attended each day of his tax fraud trial, always sitting in the row directly behind his defense table.
Since June, Manafort has been incarcerated for alleged witness tampering related to his foreign agent case. He has been serving that time in a county jail in Alexandria which is close to the federal court where his tax and bank fraud trial was held.
In a recent mug shot, the fashion-conscious Manafort sported a jailhouse jumpsuit and shadowy stubble. His brown hair, which he previously dyed, is now tinged with grey.
The former lobbyist, who once spent $18,000 on a python skin jacket, has also been forced to attend his trial without socks – because he reportedly balked at the white ones he is required to wear as an inmate.
The charges against Manafort have even impacted the legacy of his father, a popular three-term mayor in New Britain, Connecticut, from 1965 to 1971.
This month the city changed a street named after the former mayor from ‘Paul Manafort Drive’ to ‘Paul Manafort Sr. Drive’ in order to distance it from the controversy surrounding Manafort’s trial.