ALEXANDRIA, VIRGINIA — The dollar figures and luxurious trappings of Paul Manafort’s life had become a blur by the end of Day 2 of his trial for alleged bank fraud and tax evasion. In just one year, Manafort spent $444,160 at high-end men’s store Alan Couture on, among other items, a $7,500 pure silk suit and a $15,000 ostrich jacket. In another year, he dropped $113,450 at the House of Bijan in Beverly Hills, dubbed the most expensive men’s store in the world. Between 2010 and 2014, Manafort paid more than $3 million for construction work on his family’s residences in the Hamptons, Manhattan, Brooklyn and northern Virginia.
Federal prosecutor Greg Andres asked a witness who had worked at one of Manafort’s favored boutiques, “Do the payments on these documents come from a particular country?”
“Yes,” the witness said. “Cyprus.”
Prosecutors spent most of the day showing how Manafort funded his lifestyle with money that flowed through various banks in Cyprus, the island nation in the Mediterranean that has faced accusations of being a money-laundering conduit for wealthy Russians and international criminal organizations. One witness, Maximillian Katzman, the aptly named and impeccably dressed 29-year-old manager of Alan Couture, said his store had 40 regular customers and Manafort was the only one who paid by international wire transfer. In addition, Manafort bought his wife a Mercedes and his daughter a $1.9 million house in Arlington, Virginia, with wire transfers through Cyprus.
The DOJ’s lawyers put eight witnesses on the stand, and all of them attested to Manafort’s habit of paying his bills through shell companies and Cypriot banks. It became a parlor game of sorts to see which witnesses could correctly pronounce Nicosia, the capital and finance hub of Cyprus.
Manafort’s defense lawyers have said they plan to blame Manafort’s former business partner, Rick Gates, for any alleged crimes. In response, prosecutors supplied evidence showing that it was Manafort’s name and signature — not Gates’ — on the paperwork documenting that lavish spending. They pressed each witness on who had paid the bills and called the shots: Manafort or Gates?
The day’s first witness was an advertising consultant named Daniel Rabin who worked with Manafort in Ukraine. Rabin testified that he had sent his invoices and flight itineraries to Gates. If he needed to get urgent information to Manafort, he went through Gates: “Rick was a gatekeeper.” But the remaining witnesses said they knew little or nothing about Gates, and Manafort’s lawyers offered little by way of cross-examination for the bulk of Tuesday’s witnesses.
This approach seemed to have two aims: First, the government wanted to illustrate for the jurors just how luxurious a life Manafort, his wife and his daughters lived. (Manafort spent nearly as much on clothes in a single day in April 2013 as the median household in northern Virginia earns in a year.) But Judge T.S. Ellis III didn’t much care for this game plan, reminding prosecutors on several occasions that Manafort was “not on trial for having a lavish lifestyle.”
The second part of that strategy? Follow the money. Day 2 of the trial felt like a seminar for certified public accountants. The jury was shown a stream of invoices and bank statements tracing the flow of funds from one of Manafort’s companies through Cyprus and into various coffers. Before prosecutors try to prove beyond a reasonable doubt that Manafort hid money from the government, they want to show how that money moved and how much of it existed.
The challenge for Mueller’s lawyers boils down to this: Can they connect the dots? Judge Ellis, in his disarmingly cranky way, was quick to remind prosecutors Tuesday that Manafort was indicted for filing false individual income tax returns, failure to file reports of foreign bank and financial accounts, bank fraud conspiracy and bank fraud (yes, there is a slight but important difference). They have to prove beyond a reasonable doubt that Manafort, as the indictment claims, hid more than $30 million in income from the federal government to pay for all of those suits and cars and homes and renovations — not just that his money moved in mysterious ways.
Mueller’s lawyers sound confident they can do it. They said they planned to summon Manafort’s bookkeepers and accountants on Day 3 of the trial. At one point, Uzo Asonye, one of the federal prosecutors, seemed to suggest that the government might not even call Gates, Manafort’s former colleague and presumably the prosecution’s star witness, to testify. That comment set off a stampede of journalists fleeing the courtroom — “like rats scurrying out of here from a sinking ship,” Judge Ellis remarked — to breathlessly tell their editors. With half the gallery empty, Asonye tried to walk back his comment, clarifying that he’d only meant the prosecution wasn’t confirming or denying the appearance of any specific witness.
Asonye went on to say that the government was on track to rest its case as early as next week, well ahead of schedule. (The trial was originally expected to last three weeks.) Judge Ellis has never missed an opportunity to hurry along the DOJ’s lawyers or remind the courtroom that it’s his job to finish this trial done as fast as possible. For him, Asonye’s comment was probably the best news he’d heard all day. “I think you’re on track to do better than anybody expected,” Ellis said. Then he added a word of caution. “There’s plenty of slips between the cup and the lip.”