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Testimony: Manafort omitted information from mortgage refinance application

When court resumed this morning, the government called Melinda James, a mortgage loan assistant at Citizens Bank, to the stand.

James was the mortgage loan assistant to Paul Manafort when he applied for a cash-out refinance loan — a loan that allows the owner to take the equity out as cash — on his property at 29 Howard Street in New York City, gathering all the requisite initial documentation.

Throughout the loan application, Manafort listed 29 Howard Street as a "second residence," rather than an investment property. He cited $0 net rental income.

As part of the application, Manafort was required to list his monthly debts. When he listed his other properties, he said that he owned the home at 377 Union Street in Brooklyn “free and clear.” This, the government said, turned out not to be the case.

In advance of the appraisal of the Howard Street property, James went onto the site StreetEasy.com, and found that the Howard property was listed for rent. She said she relayed that information to her supervisor, David Fallarino, but did not know what he did after that.

Additionally, when she was collecting insurance information on Manafort’s properties from Donna Duggan at Moody Insurance, she found a mortgage from Genesis Capital on file for the 377 Union Street home. She called this “inconsistent” with what Manafort had told her. She reached out to Manafort via email, who told her, “Union Street just had a mortgage approved this month.”

This was in February 2016. After this conversation, James received an email from Rick Gates stating they’d decided not to move forward with the mortgage on 377 Union. James said she did not realize at the time that her earlier insurance documents showing the mortgage were indeed accurate.

James testified that it would matter to the bank if Manafort had an additional mortgage on a property, as monthly debts are factored into the bank’s consideration.

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Manafort was convicted on five counts of tax fraud, one count of failing to file reports of foreign bank and financial accounts and two counts of bank fraud. A mistrial was declared in three counts of failing to file reports of foreign bank and financial accounts, and seven counts of bank fraud and bank fraud conspiracy.

The trial was the first public test of special counsel Robert Mueller's investigation, and while the special counsel was vindicated, the victory wasn't total.

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Judge Ellis implored them to come to consensus, and if they then could not,he would consider the necessity of a hung jury.

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Jury submits question to judge on Day 4 of deliberations

The jury began Day 4 of deliberations in the Manafort fraud trial at 9:37 a.m., and just before 11 a.m., the jury delivered a note to the judge, prompting a flurry of activity.

It was a question, not a verdict: What if we can't come to a consensus on one count? 

Jury begins day 3 of deliberations

Judge Ellis brought the jury into the courtroom promptly at 9:30 a.m. Monday morning and called roll. Jurors were asked if they were able to stay away from news reports and other influences over the weekend, and they all answered that they had.

Deliberations resumed at 9:34 a.m.

Jury dismissed for weekend with no verdict yet reached

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Jurors were dismissed at 4:55 p.m.

Jury note: We want to go home at 5 p.m.

The jury gave Judge Ellis a note to let him know that they'll finish deliberations for the day at 5 p.m, because one of the members of the jury has an event they'd like to attend tonight.

Court will reconvene at 4:50 p.m. After that, the jury will be asked what time they wish to report on Monday.

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The jury resumed deliberations at 9:37 a.m. on Friday after being empaneled by Judge T.S. Ellis.

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He reiterated that all sealings in the case will be unsealed after the trial is over. It would be disruptive to unseal certain documents during the trial, he said. Nevertheless, he will consider the request.

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Jury asks 4 questions, including query about reasonable doubt

The note, delivered to Judge Ellis minutes ago, contains four questions from the jury. The judge heard argument from both sides as to the answers. 

Court is now dismissed for the day, and the jury will resume deliberations at 9:30 a.m. Friday.

Here are the questions from the jury, and the answers the judge gave. 

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

Answer: After suggestion from the prosecution, Judge Ellis reread Jury Instruction #53, which defined FBARs, and the details surrounding FBARS.

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.

Q: Define "shelf company"?

A: Rely on collective recollection.

Q: Can you redefine reasonable doubt?

A: The government is not required to prove beyond "all possible doubt," just doubt that can be reasoned.

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

A: No.