Manafort Trial: Day Nine

News  |  Aug 10, 2018

UPDATE 2: Day Nine exhibits entered into evidence are here.


UPDATE: Trial resumes after an almost five-hour delay with no explanation.

Live updates from The Washington Post

After a lengthy delay, Paul Manafort’s trial resumed Friday afternoon at around 2:25 p.m. with the testimony of Dennis Raico, an employee of Federal Savings Bank and one of the immunized witnesses.

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Before court resumed, one of Manafort’s attorneys was seen leaving judge’s chambers. The lawyers and Judge T.S. Ellis III entered the courtroom at about 2:18 p.m., when the judge said, “Let me have one of you please from each side.” Prosecutor Greg Andres and Manafort attorney Kevin Downing spoke with the judge at the front of the courtroom before they returned to their tables.

3:18 p.m.: Manafort quickly got $16 million in loans from bank whose CEO wanted job in Trump administration

At the start of his testimony, former Federal Savings Bank Senior Vice President Dennis Raico described how Paul Manafort won quick approval for loans as part of a process that featured unusual involvement from the bank’s chief exectuive and chairman, Steve Calk. Calk was seeking a role in the Trump administration and seemed to make that known to Manafort, Raico testified.

Manafort ultimately received two loans from the bank totaling $16 million. One of them, a $9.5 million cash-out refinance on a property in Southampton, N.Y., closed on Nov. 16, 2016, shortly after the presidential election. The other, a $6.5 million construction takeout loan, closed on Jan. 4, 2017, Raico testified.

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On Nov. 11, 2016, for example, Raico said Calk called him to say he would “possibly be up for some role in the Trump administration,” and asked Raico if he could inquire about that. The possible roles, Raico said, were Treasury secretary or Housing and Urban Development secretary. Emails show that a few months earlier, Manafort had asked for Calk’s resumé after Calk apparently asked if he could serve in the administration.

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3:37 p.m.: Manafort, seeking loans, told bank Gates had bought more than $200,000 in New York Yankees tickets

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“A plus B didn’t equal C all the time,” Raico testified to the financial information the bank would get from Manafort.

Manafort also told Raico’s assistant that more than $200,000 in charges on his American Express was because he lent his “friend” the card.

Raico testified that he understood the friend described to be Manafort’s business partner Rick Gates, who purchased New York Yankees season tickets.

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The large charge to the credit card is important because the outstanding debt would have impacted Manafort’s ability to secure a loan with the bank, Raico testified.

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4:01 p.m.: ‘Take a deep breath’: Banker says Manafort took unusual path to $9.5 million loan

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First, Dennis Raico said, as they were close to closing, Manafort emailed and said that he actually owed $3.5 million on his Bridgehampton home when he said it was $2.5 million ...

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Then about a week later, on Oct. 14, Raico said he got a call informing him that from the closing table, Manafort had decided he wanted to renegotiate the terms of the loan. Instead of a construction loan for a project in California using the Bridgehampton home as collateral, he wanted a cash-out refinance loan on the Hamptons house.

A few days later, Manafort sent Raico a sheet titled “Terms of Loan,” outlining the $9.5 million line of credit.

Raico said he had “never it seen it done before” that a potential client would set terms that way. He forwarded the terms to Federal Savings Bank Vice President James Brennan, with the message, “Take a deep breath.”

“I hadn’t seen a loan restructured at the closing table before, and I hadn’t seen Steve Calk approve restructuring of a loan,” Raico testified.

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The process moved forward, and Raico testified Manafort sent him a statement showing his profit for 2016 so far was over $3 million. (That statement is false, Manafort’s former business partner Rick Gates has testified.)

Even with the revised income, bank president Javier Ubarri told Raico and Brennan they should not pursue the loan agreement.

He told Raico to tell Manafort the bank values his relationship with Calk “immensely”  but that the loan forced the bank to assume too much risk and had taken up too much of the bank’s time already.

But Raico testified he soon got a call from Calk, saying they were moving forward with the loan, which ultimately went through on Manafort’s terms on Nov. 16, 2016.

4:26 p.m.: Manafort’s lawyers note he had collateral for $16 million in loans

In his cross-examination of Dennis Raico, defense attorney Richard Westling sought to highlight how Paul Manafort put up adequate collateral for the loans he received from Federal Savings Bank, and how early trouble that he encountered in getting financing was largely attributable to his son-in-law.

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5:39 p.m.: Manafort, a Yankees season ticket holder, told bank that Gates bought the tickets in 2016

Irfan Kirimca, senior director of the New York Yankees ... testified that Manafort had been a Yankees season ticket holder between 2010 to 2017. Manafort also exchanged emails with Yankees employees directing them to mail his 2016 season tickets to one of his New York addresses and confirmed that he and his wife would be at Opening Day.

Kirimca’s testimony is important because it links to the $16 million in loans Manafort received from Federal Savings Bank. During the loan processes, bank officials flagged the hundreds of thousands of dollars in debt on Manafort’s American Express credit card. The outstanding debt would make it more unlikely that the bank would offer a loan, and prosecutors have accused Manafort of falsifying his financial information –including information about the American Express charges– to secure the cash.

After Federal Savings Bank employees emailed Manafort to inquire about the American Express debt, Manafort told them that he loaned the card Rick Gates who purchased Yankees season tickets.

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Prosecutor Brandon Van Grack introduced an email between Manafort a Yankees employee confirming renewal of his season tickets — $700 per seat at a total of $226,800. Manafort said he wanted to renew and informed the Yankees they would receive a wire transfer of $226,800 from Global Highway Limited.

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5:50 p.m.: Manafort prosecutors say they will rest case Monday, defense gives no hints of its case

The prosecution’s final witness of the week was Andrew Chojnowski, chief operating officer for home lending at Federal Savings Bank.

Chojnowski testified briefly that when getting loans from the bank that added up to $16 million, Manafort signed documents saying he had disclosed all outstanding debts and that he understood it was illegal to make false statements during the application process.

Judge Ellis dismissed the jury with a warning not to research or discuss the case over the weekend. Court will reconvene at 1pm ET Monday. 

The special counsel’s office said their final witness will be Jim Brennan, another Federal Savings Bank employee who has been compelled to testify under immunity from prosecution. But prosecutors may recall Paula Liss, a special agent with the Financial Crimes Enforcement Network of the Treasury Department, depending on whether Ellis rules that they can ask her further questions about the filing of foreign bank records.

Manafort's defense team has not indicated what its plans are once the prosecution rests its case. 

Paul Manafort trial Day 9: Manafort got $16 million in loans from bank whose CEO wanted Trump administration post (WaPo)


Friday started off with an unexplained extended recess, something experts say is unusual. 

CNN

When the trial was supposed to begin at 9:30 a.m. ET, the judge huddled twice with lawyers for both sides, while the conversation was obscured from the public with white noise.

The court then recessed for nearly an hour, before the lawyers and judge returned to the courtroom. 

Ellis brought the 16 jurors in, stressed to them the importance of not discussing the case and told them to "keep an open mind." He also said the court plans to "continue with evidence" presentations in the afternoon and that he would "expect to make progress."

Washington Post

... before he left court, [Ellis] issued a strange warning to those gathered, “You cannot look and see what’s on counsels’ tables, without their permission of course.” He left to the side of the courtroom where the jurors usually gather, which is different from where he usually exits.

The judge said the break would take about 15 minutes, though it was substantially longer. At about 10:35 a.m., one of the judge’s staff members emerged to gather the board used during jury selection.

At 11:07 a.m., Ellis came back and seemed to call the case as usual. “All right, bring the jury in, please,” he said.

All 16 jurors came in.

“A belated good morning to you,” Ellis said. He told the panel he planned to call the roll as normal, but then have an early lunch break so he could consider other matters.

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Ellis offered no explanation to the public for what had happened. The trial is expected to resume at 1:45 p.m.

Before the breaks, the government requested Judge Ellis issue a second correction and ask the jury to ignore his remarks about the relevance of a witness' testimony. 

CNN

In a filing Friday morning, they asked Ellis to tell the jury to disregard a comment Thursday during a witness' testimony about alleged bank fraud conspiracy that the attorneys "might want to spend time on a loan that was granted."

The judge's comment "misrepresents the law regarding bank fraud conspiracy, improperly conveys the court's opinion of the facts, and is likely to confuse and mislead the jury," prosecutors wrote. 

The prosecutors want Ellis to explain that "that the jury is not to consider the court's comment and that loans that Manafort fraudulently applied for but did not receive are relevant to the charges in the indictment."

Ellis made the comment near the end of the day Thursday, as witness Taryn Rodriguez of Citizens Bank testified about a $5.5 million loan Manafort applied for using false statements to the bank but did not receive.

Manafort trial delayed as lawyers huddle with judge (CNN)

Paul Manafort trial Day 9: Prosecutors again ask Judge Ellis to correct one of his quips before jury (WaPo)