Dennis Raico testifies to Manafort loan applications

Dennis Raico was Day 9's first witness, the government's 24th overall. Raico is one of the government’s five witnesses who had been granted immunity for his testimony.

Raico is a senior vice president at Federal Savings Bank. He worked on two loans Manafort received from the bank totaling $16 million. The first loan was for $9.5 million and closed on November 16, 2016 and the second was for $6.5 million, closing January 4, 2017.

The first loan initially began as a construction loan for Manafort and then-son-in-law Jeff Yohai for properties in California and Manafort’s Bridgehampton home. In an unconventional move, Manafort asked the terms be changed at the closing table, dropping the California homes and requesting a cash out refinance loan on the Bridgehampton property using his Virginia home as cross-collateral.

The second loan was a consolidated takeout loan on Manafort’s property at 377 Union Street in Brooklyn.

Raico described Manafort and Yohai to be “a bit disorganized, unstructured, scattered.”

As underwriters were looking at Manafort’s financials in August 2016, Raico said there were some “discrepancies” in his income. “A plus B didn’t equal C all the time,” Raico testified. 

In October of 2016, Manafort emailed Calk citing a “major issue.” He said he’d told Calk he had a $2.5 million payoff for his Bridgehampton home when it was in fact a $3.5 million payoff. “I look to your cleverness on how to manage the underwriting,” Manafort wrote.

On October 19, during the closing of this first loan, Raico got a call that Manafort no longer wanted to include his California properties. He said Manafort rewrote the terms of his own loan, something that was “not bank policy,” but when asked by Ellis if it was wrong to do so, answered “no.” He said he’d never seen a loan get restructured at the lending table.

Raico also said he has never seen CEO Calk get involved in approving a loan. Raico described Calk as “very involved.”

With the new structure of the loan, Raico said income was a determining factor on whether or not it would go through. In this scenario, tax returns and P&Ls were required.

On October 20. 2016, bank president Javier Ubarri wrote Raico saying the bank would not proceed with the loan. However, Calk had called earlier approving the loan.

On October 28, 2016, Manafort signed the loan application with the boilerplate stipulation that providing false information was a federal crime. The loan closed on November 16, 2016, with Calk’s approval.

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Question: Is one required to file an FBAR if they own less than 50% of the company and no signatory authority?

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ELLIS: A person is an owner of record (Owner of FBAR) if a person is acting on behalf of a US person with access and control of the account, OR if a US person who owned more than 50% of company.

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Q: Can you redefine reasonable doubt?

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Q: Can the exhibit list be amended to include the indictment?

A: No.