WASHINGTON — In the first trial to come out of Special Counsel Robert Mueller’s investigation, a jury in northern Virginia convicted Paul Manafort, the former chairman of President Trump’s presidential campaign, of eight counts that include bank fraud and filing false tax returns. Federal district Judge T.S. Ellis III said that he would declare a mistrial on the remaining 10 counts on which the jury was unable to reach a verdict. The charges carry a sentence of as many as 80 years in prison, but will likely be far less.
The verdict marks the first courtroom victory for the Office of the Special Counsel, but it is likely not the last time Mueller’s team and Manafort will meet. Manafort is slated to face trial again in a federal court in the District of Columbia on a separate set of charges brought by Mueller. In that case, Manafort stands accused of engaging in conspiracy against the United States, conspiracy to launder money, failing to register as an agent for a foreign principal, making false and misleading statements under the Foreign Agents Registration Act, conspiracy to obstruct justice and obstruction of justice. The second case is expected to go to trial in September.
“It doesn’t involve me, but I still feel it’s a very sad thing that happened,” Trump said of Manafort’s conviction. “This has nothing to do with Russian collusion. This is a witch hunt and it’s a disgrace.” The president continued: “It was not the original mission, believe me. It was something very much different.”
"Nothing to do with Russian collusion, continue with the witch hunt." Trump briefly talks Manafort; mum on Cohen. pic.twitter.com/8x8YswReFQ
— Josh Marshall (@joshtpm) August 21, 2018
Some 235 miles north at almost the exact same moment, Trump’s former lawyer/fixer, Michael Cohen, pleaded guilty to eight counts stemming from his involvement in hush money payment to women with whom the president allegedly had affairs.
Paul Pelletier, a former Justice Department prosecutor for 27 years who worked on tax fraud and white-collar cases, tells Rolling Stone that a partial conviction is a relatively common outcome in tax and financial fraud cases.
“The documentary evidence of tax and banking fraud crimes was overwhelming in this case,” Pelletier says. “The only real question for the jury was Manafort’s intent — a hurdle overcome by the testimony of numerous government witnesses who participated in the transactions, including witnesses who admitted to participating in a crime from which only Manafort benefited.”
He adds, “This verdict will surely be wind in the sails of the Special Counsel’s ship going forward.”
Manafort’s trial unfolded over two weeks in the phone- and internet-free confines of the Albert V. Bryan federal courthouse in Alexandria, Virginia. Each day, to an audience of hundreds that filled the gallery of Room 900 and a separate overflow room, federal prosecutors presented a case in which Manafort “lied to keep more money when he had it and lied to get more money when he didn’t,” as lead prosecutor Greg Andres put it in his closing argument. The case was presided over by Judge T.S. Ellis III, who repeatedly interrupted prosecutors and chided them to move quicker. Ellis’ frequent interjections led to several feisty exchanges with Mueller’s team.
In the prosecution’s version of the case, Manafort avoided paying taxes on $16.5 million that he stashed in overseas bank accounts in Cyprus, St. Vincent and the Grenadines and the United Kingdom. This took place, the prosecution said, at the height of Manafort’s political consulting work in Ukraine between 2011 and 2014, where he and his firm earned tens of millions of dollars for work undertaken on behalf of former Ukrainian president Viktor Yanukovych and his pro-Russia Party of Regions.
But Yanukovych’s unexpected ouster in 2014 tanked Manafort’s consulting business. His firm’s revenue were wiped out, and he suddenly had few ways to sustain his luxurious lifestyle that included fancy cars, custom clothing and multiple homes up and down the East Coast. It was then, prosecutors alleged, that Manafort committed bank fraud in an effort to obtain loans so that he could settle debts and maintain his lifestyle.
Mueller’s lawyers called two-dozen witnesses that included Manafort’s tax preparers, his firm’s bookkeeper, FBI and IRS staffers who worked on the case and employees of the luxury clothing stores where Manafort spent six-figure sums from his overseas accounts on custom suits, shirts and jackets. The revelation that Manafort had spent $15,000 on a ostrich skin jacket went viral.
But the most anticipated witness of the trial was Rick Gates, a former colleague and protégé of Manafort’s. Manafort’s lawyers previewed their defense strategy in opening arguments by saying that Gates, not Manafort, had committed the crimes in question. Under questioning by the prosecution, Gates testified that he had only done what his former boss had asked him to do when it came to the bank and tax fraud allegations. Upon cross-examination, though, Manafort’s lawyers sought to attack Gates’ credibility by revealing that he had embezzled hundreds of thousands of dollars from Manafort and suggesting that he had engaged in multiple extramarital affairs.
Lead prosecutor Greg Andres downplayed Gates’ testimony in his closing argument, insisting that the evidence introduced by the government confirmed what Gates had said. Indeed, the strength of the government’s case lay with the documents. “Ladies and gentlemen,” Andres said in his closing argument, “the star witness in this case is the documents.”
But proving tax and bank fraud and conspiracy beyond a reasonable doubt was always a tall order, and Manafort’s lawyers used their closing arguments to poke enough holes in the government’s case so as to sow doubt in the minds of the jurors. Richard Westling, one of Manafort’s attorneys, went further, using his final words to the jury to question whether Special Counsel Mueller overstepped his bounds in bringing the case in the first place. “Nobody came forward to say, ‘We’re concerned about what we’re seeing here,’ not until the special counsel showed up and started asking questions,” Westling said.
But on eight of the 18 counts, the evidence marshaled by Mueller’s team made all the difference.
This is a breaking news story and has been updated.