Kathleen Manafort, left, walks to the Alexandria Federal Courthouse in Alexandria, Va., Thursday, Aug. 2, 2018, to attend the trial of her husband, President Donald Trump's former campaign chairman Paul Manafort's tax evasion and bank fraud trial. (AP Photo/Manuel Balce Ceneta)

Follow the money: Bookkeepers to testify in Manafort trial

August 02, 2018 - 8:47 am

ALEXANDRIA, Va. (AP) — Prosecutors are asking jurors Thursday to follow the money in the Paul Manafort trial, a trail they say shows that the former Trump campaign chairman took millions from wealthy Ukrainian clients then hid it from banks and the IRS.

The jury heard testimony from the chief operating officer of an audio and visual equipment company that did lucrative business with Manafort. And they are expected to hear later from Manafort's bookkeeper.

Also expected to testify at some point was Rick Gates, Manafort's longtime deputy.

The witness list appeared to be part of a broader strategy to directly link Manafort to the alleged financial fraud that government lawyers say enabled his extravagant lifestyle. However, the federal judge overseeing the trial has questioned the hundreds of exhibits prosecutors want to submit as evidence of Manafort's lavish spending.

U.S. District Judge T.S. Ellis III said the money is relevant, but that he doesn't see the need for prosecutors to "gild the lily," especially considering Manafort's lawyers have not disputed that their client spent his money on luxury items.

Prosecutors have already relayed evidence they said showed Manafort personally directed millions of dollars in international wire transfers to pay for high-end suits and more than $3 million in improvements at various houses.

Manafort's defense attorneys have signaled they will pin blame for any illegal conduct on Gates. He pleaded guilty earlier this year and agreed to cooperate with the investigation, making him the government's star witness.

The trial is the first to stem from the Russia probe by special counsel Robert Mueller, who was tasked last year with investigating the Kremlin's efforts to sway the U.S. presidential election and potential collusion with the Trump campaign. That investigation remains ongoing, and this week's financial fraud trial is not tied to collusion.

Still, the case has exposed the aggressive lobbying efforts by foreign officials looking to influence U.S. politics. It also has pulled back the curtain on the man who steered Trump's election efforts for a time, including descriptions of Manafort's $15,000 jacket made of ostrich leather and the more than $6 million in cash he put toward real estate. One witness, Maximillian Katzman, testified that Manafort spent more than $900,000 at his boutique retailer in New York. He said Manafort was the only business client of his who paid via international wire transfer.

Prosecutor Greg Andres argued that documenting Manafort's spending for the jury was important to the case.

"Judge, this is not an effort to prove Mr. Manafort lived lavishly," Andres said. "It's evidence of his income."

An FBI agent on Wednesday described the July 2017 raid on Manafort's Virginia condominium, saying he knocked multiple times before entering with a key and finding Manafort inside. The searches described by agent Matthew Mikuska found expensively tailored suits and documents related to other luxury items allegedly bought by Manafort, including two silk rugs that cost $160,000 paid from offshore accounts.

The proceedings have caught the attention of President Donald Trump. On Wednesday, he defended his 2016 hiring of Manafort and suggested Manafort was being treated worse than mobster Al Capone. White House press secretary Sarah Huckabee Sanders said the president indeed felt Manafort had been treated unfairly.

"Why didn't government tell me that he was under investigation," Trump tweeted Wednesday. "These old charges have nothing to do with Collusion - a Hoax!"

Manafort has a second trial scheduled for September in the District of Columbia. It would address allegations that he acted as an unregistered foreign agent for Ukrainian interests and made false statements to the U.S. government.

Prosecutors told Ellis they expect to rest their case next week, noting that they are "ahead of schedule."


AP writer Anne Flaherty contributed to this report.


Follow Chad Day at https://twitter.com/ChadSDay and Eric Tucker on Twitter at http://www.twitter.com/etuckerAP

AP Editorial Categories: