RICHMOND, Virginia — Former Trump campaign chairman Paul Manafort is on trial on charges of tax evasion and money laundering. The trial is the first to arise from special counsel Robert Mueller's investigation into election interference.
Rick Gates, the prosecution's star witness, testified at length about the criminal activity he said he was involved in with and at the behest of Manafort, his former business partner. Gates' own behavior — an extramarital affair, embezzling from Manafort — came under scrutiny during a brutal cross-examination from Manafort's attorneys. And the numbers that prosecutors have alleged finally came together: All told, Manafort hid more than $16 million from the IRS and spent it on luxury items, government witnesses said.
Defense rested on Tuesday without calling any witnesses. In closing arguments, prosecutors said the evidence against Manafort was "overwhelming," while the defense said the government failed to meet its burden of proof and attacked Gates as the real criminal. The jury began deliberating the case Thursday morning.
All the top moments and analysis below.
Judge Ellis dismissed the jury for the weekend and told them to reconvene at 9:30 a.m. Monday.
Jurors were dismissed at 4:55 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.
District Court Judge T.S. Ellis, who is overseeing the bank and tax fraud trial of former Trump campaign chairman Paul Manafort, said Friday that he has received threats that necessitate U.S. marshal protection to and from the courthouse.
"I had no idea that this case would excite these emotions, I will tell you that frankly," Ellis told the court as the jury deliberated for a second day. The case is being tried in Alexandria, Virginia.
Ellis's admission came during an afternoon hearing brought by a coalition of media outlets, including NBC News, to unseal juror names and bench conference transcripts of conversations the judge had with the defense and the prosecution.
The jury resumed deliberations at 9:37 a.m. on Friday after being empaneled by Judge T.S. Ellis.
Judge Ellis also responded to a request from media organizations to unseal certain documents. Ellis granted the request to intervene and will schedule a hearing to hear arguments "sometime after 2 p.m."
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.
"I'm no stranger to criticism," Ellis said. "This case has brought it to a new level."
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?
The jury of six men and six women will soon begin to decide the fate of Paul Manafort. Judge T.S. Ellis brought in the jury to call roll and laid out the ground rules for deliberation.
"You may deliberate as little or as much as you like," Judge Ellis said.
The jury requested to deliberate in their break room because the actual jury room is too small. Ellis talked about how he was involved in the layout of the courthouse when it was being built. "I didn't pay attention to the size of the jury rooms," Ellis said. "I certainly paid attention to the size of my quarters."
Ellis granted the request.
Ellis called for a five minute recess after dismissing the jury to deliberate. Ellis said that he has other matters during the day and asked if those parties were in the courtroom.
"Mr. Trump, are you here?" he asked the courtroom. The response in the crowd was a mix of laughter and shock. Manafort himself turned around to look at the crowd with a smile.
Jim Trump, an local attorney, stood up and said that his case was next on the docket.
Judge Ellis spent about almost two hours instructing the jurors on the ins and outs of the case. In particular, he reminded them that the defendant is not obligated to prove anything.
Judge Ellis told the jury to acquit Manafort "if the evidence leaves you with a reasonable doubt". He also instructed the jury to ignore any impression they might have inferred about the Department of Justice's motives or lack of motives. Jurors are not allowed to use electronic devices, Ellis said. Ellis declined to read aloud the whole list of banned devices. "Good heavens, this list is outdated. No Blackberrys," Ellis joked.
Ellis also encouraged the jurors not to talk to the media after the trial is over. "I might suggest that you have a duty of confidentiality," Ellis said, though he stressed that it is not an enforceable order. "I hope you take it seriously."
Four juror alternates were also dismissed.
Twelve main jurors will return to court at 9:30 a.m. tomorrow to start deliberations.
Manafort attorney Kevin Downing wasted no time trashing Rick Gates, laying responsibility for FBAR filings, false information provided to accountants, and Manafort's foreign accounts at his feet.
“He is the one who had the signing authority,” he said. Downing said Manafort trusted Gates so much that he gave him the keys to his financials. “What a mistake that was.”
Downing told the jury the Rick Gates they saw was the one the government wanted them to see: a “clean shaven, decent person.”
But he “fell apart,” Downing said, and “showed himself to be the liar that he is,” and pointed to Gates’s hesitance to use the word “embezzle” during cross examination.
Closing out his argument, Downing said, “The government hasn’t met its burden beyond a reasonable doubt that Paul Manafort knowingly and wittingly” committed these offenses.
He thanked the jury for their consideration, and asked “that Mr. Manafort be found not guilty of all charges.”
Manafort attorney Richard Westling has kicked off his closing argument, which he will split with Kevin Downing.
Westling start by re-introducing himself to the jury, saying he and his team “are proud and honored to be able to represent Paul Manafort throughout this trial.”
He thanked the jury for their time, attention and service.
He emphasized that Manafort has the presumption of innocence, while the government maintains the burden of proof to prove beyond a reasonable doubt he is guilty. He added that the defense has non burden of proof, and they made the decision not to put up any evidence. “Your job is to ensure the burden is met,” he said.
“Mr. Manafort is innocent,” and will be until the jury rules otherwise, Westling said.
Westling also displayed a chart showing the scale from proven not guilty up through guilty beyond a reasonable doubt.”
“It is not enough to think someone is probably guilty or likely guilty,” he said. He asked the jury to keep this rating scale in mind, and to “hold the government to its burden, ladies and gentlemen.”
Westling then moved on to Manafort’s reputation as a talented political consultant who “endeavored to serve,” working for the campaigns of Gerald Ford, Ronald Reagan, George HW Bush, Bob Dole and Donald Trump.
He spoke of setting up successful consultancies, adding “he turned to other people to work as a team.” And he said Manafort’s involving bookkeepers, accountants and Gates into his finances was “not consistent with someone attempting to commit a fraud.”
Hinting at Gates, Westling said Manafort relied on people in his consultancies — “Sometimes they are trustworthy, sometimes they are not.”
Paul Manafort lied to hide the full extent of his wealth from U.S. tax authorities and lied some more to obtain loans that would continue to fund his luxurious lifestyle, prosecutors said Wednesday during the closing arguments of the federal fraud trial of President Donald Trump's former campaign chairman.
"Mr. Manafort lied when he had money and lied to get more money when he didn't," prosecutor Greg Andres told the jury at the start of his two-hour closing argument. "This is a case about lies."
Good morning. We'll hear closing arguments when court resumes today, beginning with the prosecution. In the meantime, here's a recap of the trial by the numbers, compiled by NBC News from official court transcripts.
27 witnesses on behalf of the government
0 witnesses on behalf of the defense
367 exhibits admitted on behalf of the government
12 exhibits admitted on behalf of the defense
Current as of Aug. 14, 2018 at 3 p.m.
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.
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
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.
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.
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.
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.
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.”
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.
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.