Manafort's 'right-hand man' to testify in fraud trial

Susan Walsh  AP

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.

Paul Manafort, shown in June, is on trial in federal court on 18 counts of tax and bank fraud.

Gates pleaded guilty in February and agreed to cooperate with the Mueller investigation on "all matters" they deem relevant.

But, she said, "Mr. Manafort was a longtime client of the firm and I didn't want to do that".

Ayliff testified that Manafort pressed him to tell bankers considering a loan application that one of Manafort's NY properties was being used as a personal residence when in fact he was renting it out.

Laporta's testimony built on that of another of Manafort's accountants, Philip Ayliff, who told jurors that Manafort denied on multiple occasions that he controlled foreign bank accounts when asked.

Washkuhn's testimony helped to undercut a Manafort lawyer's assertion during opening statements that Gates was to blame for embezzling millions of dollars and that he was the point person on Manafort's financial affairs. It was an issue he paid close attention to since 2010 when the U.S. Treasury Department ramped up its enforcement of a law requiring U.S. disclosure by U.S. citizens of their overseas bank accounts, Ayliff said.

But he otherwise approved "every penny" of the personal bills bookkeeper Heather Washkuhn paid for him, she said.

That email exchange occurred around the time prosecutors say Manafort was using doctored documents to secure loans including some papers that a witness previously testified inflated his income by about $4 million. LaPorta is one of five people on the Mueller's witness list for whom the government requested immunity. It's unclear which loan specifically was altered.

The August 3 testimony by Cindy Laporta - on the fourth day of Manafort's criminal trial - shed further light on Manafort's complicated finances and the income he earned primarily as a political consultant for Ukrainian politicians, including former President Viktor Yanukovych.

She says she would have documented them for tax purposes if he had.

Manafort was also directly involved in discussions that gave false impressions about his finances, and the lobbyist signed tax returns that falsely claimed that he didn't have any foreign bank accounts, which were supposed to be disclosed to the government.

He said Mr. Gates and Mr. Manafort took steps to hide Mr. Manafort's alleged control of the entity.

The document had Manafort's signature. "He is fighting back", she said.

Manafort emailed Laporta in December 2015 telling her he was applying for a mortgage from Citizen Bank for a property located on Howard Street in Manhattan. Another series of emails warned him of an upcoming deadline to pay property taxes on one of his homes in NY before penalties kicked in. You might argue that Democrats are going to say just the opposite, but that isn't exactly true. In his answer, Manafort said he had "NONE". Andres asked Washkuhn if she had ever heard of 14 different shell-company bank accounts. She added that she then went along with Gates' decision to create a fraudulent letter, backdated eight months before their conversation, indicating that the loan amount had been forgiven.

Prosecutors say Manafort used the offshore bank accounts, based mainly in Cyprus, to purchase millions of dollars of goods and services directly so he could avoid paying taxes on the money he received for political consulting work he did in Ukraine. "It is part and parcel with the other 94 things the man has done that show obstruction of justice", said Mr Paul Rosenzweig, a former prosecutor who was part of a team that investigated former president Bill Clinton.

At the time, DMP International had reported losses of almost $640,000 on its profits and loss statement. Asked by Assistant U.S. Attorney Uzo Asonye if she believed it was forgiven, she said: "Uh, no".

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