Verdict bolsters credibility of Mueller's investigation

Former Trump aide Manafort found guilty on 8 charges

Ex-Trump campaign head committed bank fraud, tax evasion; mistrial declared on 10 other counts after jury fails to come to agreement

Paul Manafort arrives for a hearing at US District Court in Washington, DC, on June 15, 2018. (AFP Photo/Brendan Smialowski)
Paul Manafort arrives for a hearing at US District Court in Washington, DC, on June 15, 2018. (AFP Photo/Brendan Smialowski)

ALEXANDRIA, Virginia — Paul Manafort, the longtime political operative who for months led Donald Trump’s winning presidential campaign, was found guilty of eight financial crimes Tuesday in the first trial victory of the special counsel investigation into the president’s associates. A judge declared a mistrial on 10 other counts the jury could not agree on.

The verdict was part a stunning one-two punch of bad news for the White House, coming as the president’s former lawyer, Michael Cohen, was pleading guilty in New York as part of a separate deal with prosecutors.

The jury returned the decision after deliberating four days on tax and bank fraud charges against Manafort, who led Trump’s election effort during a crucial stretch of 2016, including as he clinched the Republican nomination and during the party’s convention.

Manafort, who appeared jovial earlier in the day amid signs the jury was struggling in its deliberations, focused intently on the jury as the clerk read off the charges. He stared down blankly at the defense table, then looked up, expressionless, as the judge finished thanking the jury.

“Mr. Manafort is disappointed of not getting acquittals all the way through or a complete hung jury on all counts,” said defense lawyer Kevin Downing. He said Manafort was evaluating all his options.

The jury returned the decision after deliberating four days on the charges of tax evasion and bank fraud against the former Trump campaign chairman.

The jury found Manafort guilty of five counts of filing false tax returns on tens of millions of dollars in Ukrainian political consulting income. He was also convicted of failing to report foreign bank accounts in 2012 and of two bank fraud charges that accused him of lying to obtain millions of dollars in loans after his consulting income dried up.

The jury couldn’t reach a verdict on three other foreign bank account charges, and the remaining bank fraud and conspiracy counts.

The outcome almost certainly guarantees years of prison for Manafort and established the ability of special counsel Robert Mueller’s team to persuade a jury of average citizens despite months of partisan attacks — including from Trump — on the investigation’s integrity.

The verdict raised immediate questions of whether the president would seek to pardon Manafort, the lone American charged by Mueller to opt for trial instead of cooperate. The president has not revealed his thinking but spoke sympathetically throughout the trial of his onetime aide, at one point suggesting he had been treated worse than gangster Al Capone.

In this file photo taken on June 15, 2018, former Trump campaign manager Paul Manafort arrives at the E. Barrett Prettyman US Courthouse for a hearing in Washington, DC. (AFP PHOTO / GETTY IMAGES NORTH AMERICA / MARK WILSON)

The president Tuesday called the outcome a “disgrace” and said the case “has nothing to do with Russia collusion.”

The more-than-two-week trial, presided over by the colorful and impatient US District Judge T.S. Ellis III, has captured Trump’s attention as he works to undermine Mueller’s investigation through a constant Twitter barrage and increasingly antagonistic statements from his lawyer-spokesman, Rudy Giuliani.

But Trump and his campaign were only a small part of Manafort’s trial, as jurors instead heard days of testimony about Manafort’s finances and what prosecutors say was a years-long tax-evasion and fraud scheme.

Manafort decided not to put on any witnesses or testify himself in the trial. His attorneys said he made the decision because he didn’t believe the government had met its burden of proof.

Manafort’s defense team has attempted to make the case about the credibility of longtime Manafort protege, Rick Gates, who served as the government’s star witness. They have attacked him as a liar, embezzler and instigator of many crimes as they tried to persuade jurors that Manafort didn’t willfully violate the law.

For the prosecution, Gates was the star witness, spending three days before the jury, telling them how he committed crimes alongside Manafort for years. Gates admitted to doctoring documents, falsifying information and creating fake loans to lower his former boss’s tax bill. He also admitted to stealing hundreds of thousands of dollars without Manafort’s knowledge by filing fake expense reports.

But the government’s case wasn’t all about Gates. Prosecutors spent two weeks presenting a meticulous, document-based case before the jury as they sought to prove Manafort used offshore bank accounts to conceal millions of dollars in proceeds from his Ukrainian political consulting from the IRS and later turned to defrauding banks.

Kathleen Manafort (R), wife of former Trump campaign chairman Paul Manafort, leaves the Albert V. Bryan United States Courthouse August 21, 2018 after the jury in the case reached a verdict in Alexandria, Virginia. (Win McNamee/Getty Images/AFP)

Overall, prosecutors say Manafort avoided paying more than $16 million in taxes over several years.

They called carpenters, landscapers and clothiers to attest to how Manafort paid for his lavish lifestyle of expensive suits and elaborate properties through offshore wire transfers from shell companies in Cyprus and elsewhere. They also brought in bankers and accountants to tell jurors how when Manafort’s foreign consulting income dropped off, he turned to obtaining millions of dollars more in bank loans under false pretenses.

And perhaps most importantly, the government read from Manafort’s own emails as they laid out their case, including messages where he personally directed withdrawals from the offshore accounts he never reported on his tax returns.

Some of other emails admitted into evidence in the case revealed Manafort’s lobbying of Trump son-in-law Jared Kushner on behalf of Stephen Calk, the chairman of Federal Savings Bank. Prosecutors say Calk approved $16 million in loans for Manafort — despite several red flags — because Calk wanted a job in the Trump administration.

The emails showed that in the weeks after the 2016 election, Manafort urged Kushner to consider Calk for Secretary of the Army, a position Calk had put at the top of his list in an earlier email to Manafort. Calk also listed seven other senior domestic appointments and 18 ambassadorships — ranked in order of preference — that he would accept.

Then-Republican presidential candidate Donald Trump and his daughter Ivanka Trump, right, working with former campaign manager Paul Manafort, center at the Republican National Convention in Cleveland, Ohio, on July 20, 2016.(Chip Somodevilla/AFP Photo)

Kushner respond to Manafort’s email by saying, “On it!” But Calk ultimately did not get an administration post.

The trial in Alexandria, Virginia, is the first of two for Manafort. He faces a trial later this year in the District of Columbia on charges of conspiracy against the United States, conspiracy to launder money, making false statements and acting as an unregistered foreign agent for Ukrainian interests. He is also accused of witness tampering in that case.

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