UPDATE 2: Here's a link to today's exhibits, courtesy of the special counsel's office.
UPDATE: We're still most impressed with The Washington Post's live updates, but CNN also has good running coverage.
From the Post:
Manafort's bookkeeper returned to the stand after lunch.
The documents show that in 2015, the finances for the firm Davis Manafort Partners went off a cliff.
Having taken in millions for years — in 2012 Manafort reported paying himself a nearly $2 million salary — the firm reported only $400,744 in income in 2015 and a $1.2 million loss in 2016.
As Manafort was running Donald Trump’s campaign without pay, according to the records, his firm was losing hundreds of thousands of dollars a month. That testimony is important because prosecutors have said that after Manafort’s work in Ukraine ended, he grew desperate to for money to support his lavish lifestyle, and that is what drove him to commit bank fraud.
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Bookkeeper Heather Washkuhn continued her testimony by detailing how Davis Manafort Partners’ financial meltdown began to take a toll on Paul Manafort personally.
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Washkuhn testified she was sending a series of desperate e-mails to Manafort, seeking payment for a laundry list of Manafort’s personal bills. A tally from early 2016 showed Manafort owed more than $1.1 million to pay off credit cards and other expenses from lavish spending.
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Davis Manafort Partners was also struggling to pay its bills. In an email to Rick Gates in April 2016, Washkuhn wrote the firm’s medical insurance was going to be canceled because the bill hadn’t been paid. She said to send money “ASAP.”
Just before 3:30pm, the government starting sharing details of its bank fraud allegations, and the defense tried, unsuccessfully, to pin responsibility for doctoring bank statements on Rick Gates.
Prosecutors have now gotten to the meat of the bank fraud charges against Paul Manafort. They showed Rick Gates sent financial documents to two banks indicating Davis Manafort Partners made $4.5 million in 2015.
Bookkeeper Heather Washkuhn testified that was “four million more than what was reported on the documents that we created.” Her firm recorded the company making about $400,000 that year.
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In response to questioning, Washkuhn said Manafort was largely the one who made final decisions on the finances for the firm and himself.
“He approved every expenditure on the personal and business side,” Washkuhn said.
Manafort accountant Philip Ayliff appears as the prosecution's 13th witness overall, and he is not a good one for Manafort.
[Ayliff] testified late Thursday that Manafort was essentially on the hook for any problems with his taxes.
Philip Ayliff read from engagement letters sent to Manafort every year, which covered Davis Manafort Partners and several other entities Manafort controlled. The letters warned Manafort that the firm “will not audit or verify the data you submit,” and that “our engagement … does not include any procedures designed to detect material errors, irregularities or illegal acts.”
Manafort signed those letters every year from 2012 to 2016.
Manafort also signed off on tax returns from 2011 to 2014 in which he claimed to have no foreign bank accounts ...
“We … ask clients about foreign accounts every year,” [Ayliff] said. “We wanted to make sure clients were adhering to this rule, because the penalties are very severe.”
Testimony begins again 9:30am ET Friday.
The Manafort trial: Testimony continues on Day 3 (CNN)
Day Three of the Paul Manafort trial began earlier than expected as prosecutors filed an early morning motion asking Judge Ellis to allow the government to show evidence of Manafort's expensive tastes and lavish spending.
The special counsel’s office argued in the Thursday morning court filing that type of evidence was “directly relevant” to the crimes of which Manafort is accused, because it shows that Manafort acted “willfully,” and the money used to pay for the items “came directly from the unreported foreign bank accounts where Manafort deposited his foreign consulting income.”
Prosecutors also argued that the luxurious nature of the purchases was important because it helped inform their narrative of the case. That Manafort “had an expensive lifestyle that required lots of money to maintain is important proof as to why he would commit the bank frauds,” prosecutors wrote. They wrote that they intend to show Manafort “had grown accustomed to his material wealth,” and when his income declined in 2014, “he resorted to bank fraud as a means to maintain his lifestyle.”
The Special Counsel also made public evidence showing Manafort's communication about his financial struggles.
[T]hey released memos on his finances, including one to Ukrainian President Victor Yanukovych’s chief of staff, Serhiy Lyovochkin, in April 2013 that prosecutors were repeatedly blocked from showing in court. Manafort was asking the chief of staff for $4.4 million.
“My exposure is considerably more than the amount due now. It is over $5,000,000. I am really hurting. I cannot carry this big of a load. It is hurting me and my family,” Manafort wrote ...
Just before 10am, Judge Ellis tells prosecutors what Manafort spent his money on is not as important as the fact that Manafort did not pay taxes on that money.
And putting to rest any question whether or not Rick Gates will testify, prosecutors say they have every intention of calling him.
The first witness of the day is a man who set up TV and Internet connections in several Manafort residences, Joel Maxwell. Maxwell is the COO of Florida-based Big Picture Solutions.
Like witnesses who testified Wednesday, Maxwell said Manafort paid him through international wire transfers. He said he had two or three other clients who did the same.
Maxwell also said he sometimes dealt with Richard Gates, Manafort’s deputy, on billing issues for Manafort, but that he had never met Gates. Manafort, he said, was always the client. That is a blow to defense attorneys assertion that Gates, rather than Manafort, is to blame for the fraud, as it shows Manafort was spending his own money.
After Maxwell, the prosecution called Michael Regolizio, another vendor.
Regolizio, the owner of New Leaf Landscaping in the Hamptons, testified that he performed hundreds of thousands of dollars worth of work on one of Manafort’s homes in Bridgehampton, N.Y., over seven years.
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Regolizio told the jury most of his customers paid by credit card, but Manafort paid with wire transfers. He said only one other of his clients paid with wire transfers and those transfers were from within the United States. Manafort spent a total of about $450,000 on the landscaping and the money originated from accounts in Cyprus.
Regolizio also testified about what he agreed was a “fake invoice” from his company.
The document did not have the full name, logo and address and the seal was faint, he testified. Prosecutors have asked several witnesses to testify about apparently fake invoices, though the significance is not yet clear.
Heather Washkuhn, Manafort’s bookkeeper, next took the stand to testify about her boss' finances.
Washkuhn described Manafort as an engaged client in the seven years she worked with him, from 2011 to 2018.
“He was very knowledgeable,” Washkuhn told the jury. “He was very detail oriented. He approved every penny of everything we paid.”
The testimony is important because Manafort’s defense team hopes to rebut allegations of Manafort’s financial wrongdoing by portraying him as the victim of his partner in his political consulting firm.
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Critically, Washkuhn also testified she was unaware of and did not have any records of foreign holdings or accounts controlled by Manafort. That’s important because prosecutors allege Manafort hid income in accounts offshore in places such as Cyprus and used them to make loans to himself and pay vendors as a tax avoidance scheme.
Washkuhn's testimony will continue after lunch.
Ongoing live updates here.
Paul Manafort trial Day 3: Prosecution has ‘every intention’ of calling Richard Gates as witness (WaPo)
GOVERNMENT’S TRIAL BRIEF REGARDING EVIDENCE OF ITEMS AND SERVICES PURCHASED BY THE DEFENDANT (pdf)