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Manafort trial Day 10: Prosecution rests, Manafort defense starts Tuesday

Paul Manafort’s defense team, including Kevin Downing, center, Thomas Zehnle, right, and Richard Westling walk to federal court. Prosecutors in Manafort’s tax- and bank-fraud trial rested their case Monday afternoon. | Evan Vucci/AP Photo

Special counsel Robert Mueller’s prosecutors rested their case against Paul Manafort on Monday afternoon after calling more than two dozen witnesses in their tax- and bank-fraud case against the former Trump campaign chairman.

The final round of testimony from Treasury Department senior special agent Paula Liss lasted only five questions. It essentially boiled down to Liss stating that she had not found any evidence that Manafort’s international political consulting firms had filed reports with the U.S. government acknowledging they had foreign bank accounts.

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Failing to file those bank account reports are one prong of Mueller’s case against Manafort, which is set to shift to the defense on Tuesday morning when the trial resumes in federal court in Alexandria, Virginia.

Mueller’s team brought the charges against Manafort as part of its wideranging investigation into Russian interference in the 2016 election.

U.S. District Court Judge T.S. Ellis III also ejected the public from the courtroom late Monday after Mueller’s team signaled they were finished and convened a closed-door hearing on an undisclosed, sealed motion by Manafort’s lawyers. Ellis, who has quarreled with the defense throughout the proceedings, said the substance of the request would become public once the trial is over.

Liss, a certified fraud examiner and money laundering specialist with the Financial Crimes Enforcement Network, had actually testified during the trial’s first week that neither Manafort nor his wife, Kathleen, had filed the foreign bank accounts.

Bringing Liss back for more testimony didn’t happen without some dispute.

Prosecutors wanted to recall Liss to have her answer a short set of questions about what she found when researching the foreign bank account filings from Manafort’s two latest consulting firms: Davis Manafort Partners and Davis Manafort International LLC.

They argued the questions had relevance because they would help show Manafort had knowledge of his requirements to file the reports and willfully ignored it.

“The jury should know the corporations didn’t file,” argued Mueller prosecutor Uzo Asonye.

Defense attorneys countered that Manafort himself never had more than 50 percent ownership in the firms at the time of the alleged crimes and so the burden didn’t fall on him to notify the government. They also said they had no plans to raise the topic as they presented their defense.

Ellis ultimately allowed Liss’ testimony, but he first instructed the jury to keep in mind that only Manafort personally was charged for not filing the foreign bank account report and that they could not convict him for crimes that were not in the government’s indictment.

Trump-aligned bank CEO intervened for Manafort, witness said

A Chicago bank CEO who was seeking a top job in the Trump administration overrode the objections of the bank’s president in order to green light a $ 9.5 million loan for Paul Manafort in the midst of the 2016 presidential campaign, a bank executive testified Monday.

The testimony came shortly before prosecutors rested their case Monday afternoon against Manafort after nearly two weeks of witnesses, often presented at a breakneck speed that Ellis encouraged.

Manafort trial

The CEO of the Chicago-based Federal Savings Bank, Stephen Calk, interceded after the president of the bank, Javier Ubarri, decided it was too risky to allow Manafort to draw the $ 9.5 million in funds out of equity in his Bridgehampton, N.Y. home, bank vice president James Brennan said.

Prosecutor Greg Andres asked Brennan why the bank went through with the loan if its president was opposed to its issuance.

“It closed because Mr. Calk wanted it to close,” said Brennan, who testified pursuant to a grant of immunity from prosecution over his involvement.

Jurors heard from another bank employee last week that as Manafort was applying for the loan, Calk considered himself to be in the running for a Cabinet post, like secretary of Treasury or of housing and urban development.

However, Brennan said underwriters at the bank had concerns about Manafort’s lack of income stream and his debts, including other outstanding loans and an overdue bill for $ 210,000 in Yankees season tickets.

“Mr. Manafort had no revenue [and] just $ 638,000 in expenses” in 2016 before he applied for the $ 9.5 million loan, the bank executive said.

Manafort claimed he had $ 2.4 million in income due in from a client, but the bank couldn’t verify that.

“We were not in possession of any back-up,” said Brennan, who also called Manafort’s failure to disclose loans from other banks a “definite red flag.”

The courthouse where Paul Manafort is being tried is pictured. | AP Photo

Brennan testified that he graded Manafort’s loan application as just high enough to merit consideration, even though he personally recommended the loan not be approved.

Asked why he graded the loan at a higher level than he believed to be accurate, he pointed to Calk’s wishes and said, “Because the loan was going through.”

Brennan described the two loans Manafort sought — one for $ 9.5 million and one for $ 6.5 million — as the two largest the bank had made at the time.

Asked by Andres whether the bank made money on the loans, Brennan said the bank had actually lost nearly $ 12 million.

Manafort’s attorney asked if the bank had attempted to recoup some losses by seizing collateral from Manafort, suggesting that the longtime lobbyist’s indictment in late 2017 May may have “constrained” the bank’s ability to access his assets. Brennan said he was unaware whether such efforts had been made.

Calk, the CEO, hasn’t testified in the case. Andres said at a sidebar bench conference last week that the government considers him a co-conspirator in Manafort’s alleged fraud, even though Calk owns about two-thirds of the privately-held bank.

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