Manafort’s bookkeeper ‘was unaware’ of foreign accounts

Former Trump campaign chairman on trial in US on tax and bank fraud charges

 

Paul Manafort’s lead bookkeeper testified on Thursday that she was unaware of his financial holdings outside the United States, as prosecutors pressed their case that US president Donald Trump’s former campaign chairman hid millions of dollars in income that helped bankroll a lavish lifestyle.

Mr Manafort (69), faces 18 charges, including tax fraud, bank fraud and failing to report foreign bank accounts, in the first trial stemming from special counsel Robert Mueller’s investigation of Russia’s role in the 2016 US presidential election. Mr Manafort has pleaded not guilty to all the charges.

Heather Washkuhn, the bookkeeper who oversaw Mr Manafort’s business and personal holdings, testified as a witness for the prosecution that she thought she had complete knowledge of his financial affairs but that she was unaware of his holdings outside of the United States.

Ms Washkuhn, managing director of the accounting firm Nigro Karlin Segal Feldstein & Bolno, said Mr Manafort was “very detail-oriented” and “approved every penny” the firm paid from his personal account.

After two days of laying out details of Mr Manafort’s lavish lifestyle – including millions spent on expensive clothing and landscaping – prosecutors shifted focus on Thursday to try to make the case that he conspired to hide the income, including from his bookkeepers and accountants.

The prosecution has attempted to portray Mr Manafort as a tax cheat and a liar who hid much of the $60 million he earned from political work for pro-Russian politicians in Ukraine by stashing it in undisclosed overseas accounts. The trial is in its third day in a federal court in Alexandria, Virginia, outside Washington.

Mueller investigation

Vendors who provided luxury good and services to the Manafort family testified on Wednesday and Thursday that they often received overseas wire transfer payments from a variety of companies such as Peranova Holdings Limited, Global Highway Limited and Lucicle Consultants Limited.

Ms Washkuhn testified on Thursday that she had no idea any of those entities were owned or controlled by Mr Manafort.

Mr Manafort’s trial is the first stemming from Mr Mueller’s 14-month investigation of Russia’s role in the 2016 US presidential election and potential co-ordination between the Trump campaign and Moscow, though none of the charges against Mr Manafort involve this issue.

Greg Andres, a member of Mr Mueller’s team, confirmed on Thursday that the prosecution will call Mr Manafort’s former business partner Rick Gates as a witness, a day after prosecutors suggested they might not. “We have every intention of calling him as a witness,” Mr Andres said.

Mr Gates pleaded guilty to making false statements after being indicted by Mr Mueller. Defence lawyers have painted Mr Gates as an untrustworthy business partner who embezzled funds from Mr Manafort’s consulting firm.

As part of his guilty plea, Mr Gates acknowledged routinely dealing with accountants in the preparation of Mr Manafort’s tax returns and misleading them with false information. He claimed he did so with Mr Manafort’s knowledge.

Mr Manafort routed millions of dollars to the United States by putting it in real estate, and spending it on expensive suits, cars and home renovations, according to prosecution witnesses. Prosecutors said Mr Manafort evaded taxes through this scheme. Five of the 18 counts he faces relate to filing false tax returns.

‘Forged’ invoices

On Thursday, the jury heard from Joel Maxwell of a Florida-based company that installs lighting, audio visual equipment and automation systems for homes that did work for Mr Manafort. Mr Maxwell testified that some of the Manafort invoices shown to him from prosecutors appeared to be have been forged.

Michael Regolizio, of a landscaping firm in the Hamptons on New York’s Long Island, also testified that a Manafort invoice was phony, listing an incorrect address and an altered version of his company’s name. Mr Regolizio said he was paid about $450,000 between 2010 and 2014 for work for Mr Manafort, and that the money was paid via a money transfer from Cyprus.

Two witnesses – an executive at an upscale tailor’s and a retired general contractor – testified on Wednesday that invoices purporting to be bills from their companies to a company tied to Mr Manafort appeared to be fake. It was unclear who created the invoices or how they were used.

As he did on Wednesday, District Judge TS Ellis warned prosecutors against focusing too much on Mr Manafort’s lifestyle. “It kind of engenders some resentment against rich people,” the judge said, expressing concern about displaying photographs exhibiting Mr Manafort’s wealth.

Mr Mueller has indicted or secured guilty pleas from 32 people and three companies. Mr Trump has called Mr Mueller’s investigation a witch hunt and on Tuesday called on attorney general Jeff Sessions to end it. – Reuters