Judge Ellis continues to pressure prosecution to hurry up

Before the jury was brought in the courtroom ahead of FBI forensic accountant Morgan Magionos' testimony, Judge T.S. Ellis heard arguments from defense counsel.

Defense attorney Richard Westling objected to some of the FBI compilation charts and tables that showed how much money Manafort spent on vendors, saying that the court had already heard testimony about them. Prosecutor Greg Andres said that they were referenced during vendor testimony, but that Ellis had told the vendors not to testify to these charts, since it was the FBI that made them.

Ellis overruled the objection, but said that defense could exercise it when prosecution moved to enter these charts. He implored the prosecution to "sharply focus" their testimony.

"Judges should be patient," Ellis said. "They made a mistake when they confirmed me because I'm not very patient."

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Defense rests after calling no witnesses, closing arguments to begin Wednesday

The defense rested its case earlier Tuesday without calling any witnesses. Why?

"This is the United States of America. You're presumed innocent until proven guilty. We believe the government cannot meet that burden," Manafort defense attorney Kevin Downing told members of the media after leaving court. 

Later in the afternoon, Judge T.S. Ellis adjourned court for the day after the charging conference, or a meeting between a judge and the lawyers from the defense and prosecution. 

Both sides submitted proposed changes to the draft jury instructions. The draft included 87 instructions to the jury but the final instructions were reduced to 83. All changes were agreed upon with the exception of one concerning comments that Judge Ellis has made during witness testimony.

Prosecutor Greg Andres, in particular, took issue with a comment that Ellis made during Rick Gates' testimony. Gates testified that Paul Manafort watched his finances very closely, "down to the penny". At the time, Ellis spoke up and said that Manafort must not have watched his finances that closely if Gates was able to embezzle from him.

After Andres gave this example, Judge Ellis joked, "That really hurt the government, didn't it?"

In the end, Ellis rewrote the instructions. The new instruction was not read aloud in court.

Court will reconvene for closing arguments at 9:30 a.m. Wednesday.

Read the email from Manafort to Trump adviser Jared Kushner submitted into evidence

This email was submitted into evidence in the Manafort trial yesterday.

Paul Manafort emailed Trump adviser and son-in-law Jared Kushner on November 30, 2016 recommending Stephen Calk for the Secretary of the Army. At the same time, Manafort had received the first part of what would be $16 million in loans from Calk's bank, the Federal Savings Bank.

Read it here

Good morning, and welcome to Day 11

The judge did not require the defense to identify any witnesses it might call — and it could turn out this morning that Manafort's team doesn't plan to call anyone. 

Judge Ellis just announced to the court that a sealed proceeding in the Manafort case is scheduled to begin shortly.

It is unclear if it is a continuation of yesterday's sealed motion. Open court will begin when the sealed hearing is over.

Government rests its case against Paul Manafort

Prosecutors rested their case against Manafort around 5 p.m. Monday, and the jury is dismissed for the day.

Judge T.S. Ellis will talk to the defense about their potential witnesses, with the jury due back at 9:30 a.m. Tuesday.

Manafort's defense attorney previews closing argument

Judge T.S. Ellis heard arguments from both sides to consider allowing a witness to testify about Paul Manafort's foreign bank account reporting responsibilities.

Prosecutor Uzo Asonye said that the jury needs to see these filings because it shows that Manafort knew what the law was and violated it anyway. He said the defense is planning on arguing that Manafort didn't own more that 50 percent of DMP International, LLC and thus was not personally responsible for filing an FBAR for the company.

For his part, defense attorney Thomas Zehnle said that there has been no evidence that shows that Manafort had to file an FBAR on behalf of DMP. "They've already thrown the kitchen sink at him," Zehnle said. "Now they're throwing the plumbing and pipes."

Ellis asked Zehnle if his team is planning on arguing that during closing. After initially saying they wouldn't, defense attorney Richard Westling asked for a moment to consult with Zehnle.

Zehnle then said that the government had a chance to indict DMP but chose not to, instead indicting Manafort alone. Manafort's personal reporting responsibilities goes to intent, he said and that they plan to argue that Manafort was not responsible for filing DMP's foreign bank records.

Ellis called a 15-minute recess to consider the matter but warned that "neither side is going to be happy" with whatever he decides.

After the recess, Ellis heard more argument.

Asonye said that after consulting with the defense counsel, he understands that they intend to argue that the Cypriot accounts that Manafort controlled were in fact DMP International's accounts. If that's the case, he said that the government needs to further address Manafort's willfulness by calling Paula Liss back to testify as to his reporting requirements.

Ellis called another recess to consider the matter but said if he grants the request, he'll instruct the jury to consider Liss' testimony only in regards to willfulness.

Testimony: Federal Savings Bank took a hit for Manafort's loans

When Richard Westling resumed his cross examination, he asked Brennan about the process of approving the loan for 377 Union Street in Brooklyn.

The defense showed the credit memorandum Brennan wrote for the loan, which he would do at the last stage for all loans. He provided a risk rating of 4 — which is considered “average.” Over a 4 rating, a risk is considered troubled and is not approved.

Brennan said later in Greg Andres' redirect that he didn’t think the loan should be rated a 4, but that the loan should not be made. However, since the loan was already  approved, he had to provide at least a 4 rating as higher ratings are not approved.

Brennan said he had collected information on Manafort as part of the process and identified two key credit risk issues  his past work for foreign governments provided an unknown risk to the bank, and his New York properties potentially losing value if the housing market crashed.

Throughout his cross, and re-cross, Westling sought to sow doubt in the bank’s proficiency and blame them for the errors on Manafort’s applications. He asked Brennan about an issue with the Bridgehampton loan that incorrectly computed Manafort’s income, an error that made it look larger. Westling also pointed out that some at the bank were aware that Manafort’s initial Union Street loan was in default.

Westling also asked Brennan about the information inputted on the 1003 form, or the loan application, implying someone other than Manafort might have provided the incorrect information, rather than Manafort himself.

He also asked if P&L sheets can be provided by others, including accountants, bookkeepers or business associates. Brennan said they could be.

After, Andres asked Brennan if Federal Savings Bank made money off the Manafort loans. Brennan answered that the bank took a hit and wrote off the loans. He said the bank is still owed $11.8 million, but he didn’t specify how to account for the discrepancy from $16 million.

Banker: 'Red flags' on Manafort's loan application overruled by CEO reportedly interested in Trump administration job

James Brennan, a vice president at the Federal Savings Bank, testified that there were issues with a loan that Paul Manafort applied for, but CEO Stephen Calk approved it anyway.

Prosecutor Greg Andres walked Brennan and jury through a series of loans that Manafort applied for. Brennan testified that there were discrepancies on the applications about Manafort's income, his assets and his liabilities.

Brennan testified that Manafort didn't disclose outstanding loans he had on other properties and that Manafort was delinquent on his American Express card. The bank also learned that Manafort's company had no income as of August 2016.

Andres asked Brennan if these factors were important in deciding whether or not to approve Manafort's loan. "It goes to the issue of character," Brennan said. Andres showed the jury an internal bank email saying the president of Federal Savings Bank, Javier Ubarri, had turned down the loan because of these problems. Ubarri's decision, however, was overturned.

"The loan closed because Mr. Calk wanted it to close," Brennan said.

Brennan is the third witness to testify under immunity and could be the government's final witness of the trial. 

Manafort attorney Richard Westling asked Brennan several questions about the collateral Manafort put up for the loans from Federal Savings Bank. For the loan on his Bridgehampton home, Manafort put up that house, which the bank valued at $12 million, his $2.7 million condo in Alexandria, and $615,000 in cash. Brennan said this amount was “pretty standard” for a loan of that size.

Westling also asked Brennan about Manafort’s Amex credit card debt, which he said Manafort paid off in October 2016, helping Manafort’s credit. Brennan said Manafort had “acceptable credit.”

Pete Williams

Good afternoon. Here's what prosecutors filed ahead of court convening today.

Robert Mueller's prosecutors say Paul Manafort's false statements to officials of The Federal Savings Bank are legally relevant, even if the bank had its own motives for wanting to approve his loan applications.

That's true, the prosecutors say, even though bank executive Stephen Calk pushed for approval because he hoped to get positions in the Trump campaign or the administration.

"Contrary to the suggestion advanced during a sidebar conference on August 10, 2018, however, even if Calk intended to approve Manafort’s loans for reasons relating to his personal interests, that would have no bearing on the materiality of Manafort’s false and fraudulent representations to the bank," they said in a brief filed Monday a few hours before court was to convene at 1 p.m.

Manafort's former partner, Rick Gates, has testified that Manafort directed him to alter the firm's profit-and-loss statement for 2015 and allowed Manafort to change the 2016 statement, as well. Bank officials say the loans were approved because Calk overruled the loan officers and personally approved them.

Judge T.S. Ellis, in a sidebar conference that the jury could not hear, expressed some concern with the notion that the bank could be defrauded, given that Calk approved the loan for personal reasons. That doesn't matter, the prosecutors say. What's important is that Manafort intended to defraud the bank by making false statements in his loan applications.

Court adjourns. What's ahead for Monday?

Just before court adjourned for the day, Judge Ellis talked to counsel for both sides about logistics for next week.

Court will begin at 1 p.m. on Monday, and the prosecution will rest its case that day, Andres said. Both sides said they want two hours each for closing arguments.

It's no accident that TV programs are half an hour, Judge Ellis said, and if you think that you can hold a jurors' attention for two hours, you're living on a different planet. Nevertheless, he granted the request.

See you next week.

What do the Yankees have to do with this?

As the afternoon waned, the government agreed to call two quick witnesses after Raico, rather than the longer witness they originally planned to call.

Irfan Kirimca is the senior director of ticket operations for the New York Yankees. He said he oversees all aspects of ticket operations for the organization.

Government counsel Brandon Van Grack pulled up the financial records for Manafort’s ticket account. The chart showed Manafort’s season ticket account holdings from 2010 to 2017, though Kirimca said Manafort was a ticket holder prior to 2010 as well. The account was in Manafort’s name, and paid for by Manafort, Kirimca testified. 

Manafort had four seats to all 81 home games of the season.

During Raico’s earlier testimony, the government published Manafort’s Amex statement showing the 2016 Yankees season ticket purchase with regard to his outstanding debts while applying for loans. Rick Gates had testified that Manafort asked him to say he used the card to purchase the tickets for himself.

The government showed an email exchange between Yankees employees and Manafort, where Manafort asked that his tickets to be shipped to his Fifth Avenue address. The employee goes on to ask Manafort, “Will you and Kathy be attending Opening Day?” Manafort answered that they would be in attendance.

 Finally, Van Grack asked Kirimca about Gates. Kirimca testified he’d interacted with Gates over email, but testified that Gates never said he’d be paying, and never asked the tickets to be shipped to him. He said he searched the organization’s records for Gates and found there were no records and no ticket accounts.

“Was Rick Gates a season ticket holder?” Van Grack asked. “No,” Kirimca said.

In Manafort attorney Richard Westling’s cross, he asked Kirimca if it was unusual for people to buy tickets to use for business entertainment, to which he said no.