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Manafort convicted on 8 counts; mistrial declared on 10 other charges

The trial was the first public test of special counsel Robert Mueller's investigation into possible Russian meddling and obstruction of justice by Trump.
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By Ken Dilanian

ALEXANDRIA, Va. — A federal jury in Virginia convicted Paul Manafort, President Donald Trump's former campaign chairman, on eight felony counts on Tuesday, but the judge declared a mistrial on the 10 other charges he faced.

Manafort, a fixture in Republican politics for decades, was convicted of five counts of tax fraud, one count of failure to file a report 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.

Prosecutors built a case that Manafort for years hid millions from U.S. tax authorities in overseas accounts, spending the money to maintain a lavish lifestyle and lying to banks to generate more cash.

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.

While the jury was in the court room and the verdict was being read, Manafort showed no reaction and stared straight ahead, not looking at the jury. Members of his defense team often turned their heads to look at the jury.

Manafort was asked to step to the lectern after the jury left the room. Judge T.S. Ellis told Manafort that he has been found guilty on a variety of counts, and that Manafort would have a role to play in the pre-sentence investigation report that the judge relies on to help determined sentencing.

As Manafort was led out of the room, he whispered into defense attorney Thomas Zehnle's ear and nodded at his wife, Kathleen Manafort, sitting in the front row of the courtroom.

His lead attorney, Kevin Downing, said Manafort is now "evaluating all of his options."

"Mr. Manafort is disappointed of not getting acquittals all the way through or a complete hung jury on all counts," Downing told reporters outside the courthouse. "However, he would like to thank Judge Ellis for granting him a fair trial, thank the jury for their very long and hard-fought deliberations. He is evaluating all of his options at this point."

Manafort faces an estimated seven to nine years in prison.

Prosecutors have until Aug. 29 to decide what they will do about the 10 mistrial charges.

The jury deliberated for four days after hearing 12 days of arguments, evidence and witnesses.

Mueller's team buried the defendant in an avalanche of emails, tax returns, bank documents and the damning testimony of bankers, accountants and Manafort's onetime protégé, Rick Gates. The defense sought to raise doubts about Gates' credibility and about other aspects of the evidence, and was partially successful.

Manafort, 69, also faces another trial on related charges next month in Washington.

He came to the Trump campaign with deep ties to Russian figures, and was the only non-Trump-family member from the campaign team to participate in the June 2016 Trump Tower meeting with a Russian lawyer, which was set up on the promise of obtaining incriminating information about Hillary Clinton.

Manafort also played a role in an effort to soften a plank in the Republican Party platform calling for lethal aid to Ukrainians fighting the Russian invasion of their country.

The charges at issue in the trial, which began July 31, weren't directly related to Russian interference in the 2016 election, the key aim of Mueller's investigation which includes probing possible collusion between the Trump campaign and Moscow.

Trump, after arriving in West Virginia for a rally Tuesday, called the outcome a "sad thing that happened" and said the verdict had nothing to do with him and "nothing to do with Russian collusion."

Trump added of Mueller's investigation, "It's a witch hunt and a disgrace."

Democratic lawmakers pounced on Manafort's convictions and the near-simultaneous news that Michael Cohen, the president's former personal attorney, had pleaded guilty in federal court to eight counts of tax evasion, bank fraud and campaign finance violations and said he paid hush money to women at Trump's direction.

Senate Minority Leader Chuck Schumer, D-N.Y., told reporters on Capitol Hill that Trump "better not talk about pardons for Cohen or Paul Manafort tonight or in the future."

The highest-ranking Democrats on the House and Senate intelligence committees, meanwhile, said that the guilty verdict proves that Mueller's probe is legitimate.

"Manafort's conviction shows that Mueller's investigation is far from a witch hunt, as Trump falsely repeats as a mantra," Rep. Adam Schiff, D-Calif., tweeted. "It also shows his campaign and Administration were rife with people with a history of unscrupulous business dealings and concerning ties to overseas interests."

Sen. Mark Warner, D-Va., also raised the specter of Trump possibly pardoning his former campaign chairman.

"This verdict makes it absolutely clear that the Mueller probe is not a ‘witch hunt’ — it is a serious investigation that is rooting out corruption and Russian influence on our political system at the highest levels," Warner said. "The President’s campaign manager was just convicted of serious federal crimes by a jury of his peers, despite the President’s continued attempts to undermine the investigation which has brought Mr. Manafort to justice."

He added, “Any attempt by the President to pardon Mr. Manafort or interfere in the investigation into his campaign would be a gross abuse of power and require immediate action by Congress.”

Republicans noted that the verdict was not related to one of Mueller's core mandates, which is to investigate Russian collusion during the 2016 U.S. election and any links or coordination with Trump’s campaign.

“I haven't been able to look at all the details, but I would note that none of this has anything to do with the Russian collusion or meddling in the election, which seems to be the main focus and certainly has been the subject of the investigation by the Senate Intelligence Committee that I sit on,” Sen. John Cornyn, R-Texas, said on Tuesday.

Sen. Lindsey Graham, R-S.C., said that Manafort may be more likely to cooperate with Mueller’s team going forward and that he does not deserve a pardon.

“What does it mean? It means he's more likely to talk and if there was any collusion between the Trump campaign and Russians and he knows anything about it he's more likely to say something now that he's facing criminal long term incarceration. But I've yet to see any evidence of collusion,” Graham said.

He added that he does not believe the president would pardon Manafort because “I can't think of what Mr. Manafort has done to deserve a pardon.”

"The pardon is about rewarding a person for doing something right after being convicted, it's not about helping you as a politician," he said.

By the time Manafort went to work for the Trump campaign for free in the summer of 2016, Manafort had no income and was in a precarious financial position, prosecutors showed. He was so desperate for cash that he felt compelled to defraud banks, lying about his income and debts, prosecutors said, offering pages of documents and a parade of witnesses who testified to inconsistencies with his loan paperwork.

"Mr. Manafort lied when he had money and lied to get more money when he didn't," prosecutor Greg Andres told the jury in his closing argument. "This is a case about lies."

For Manafort, a graduate of Georgetown Law School and an adviser to five Republican presidential campaigns, it's been a stunning collapse — first financial, and now, a life-altering criminal conviction.

He was paid some $60 million over 10 years by a Russian-backed political party in Ukraine, the prosecution showed, and evaded taxes on about half that income by parking it in overseas accounts and disguising it as loans.

But after his Ukrainian client, former president Viktor Yanukovych, fled to exile in Russia in 2014, the spigot of cash turned off, and Manafort began defrauding banks to raise cash to pay for his lavish lifestyle.

Somehow, much of the cash was gone — spent on bespoke suits, homes all over the world and the upkeep that such a lifestyle demands.

His defense team said in closing arguments that the government failed to meet its burden of proof that Manafort was guilty beyond a reasonable doubt, one of the reasons it called no witnesses to testify.

Downing also argued that Gates was the real criminal, responsible for filing foreign bank account forms and for the false information provided to accountants.

"He is the one who had the signing authority," Downing said, adding that Manafort trusted Gates so much that he gave him the keys to his financials. "What a mistake that was."

But for the jury, the evidence was sufficient to convict Manafort of at least some financial felonies.

Gary Grumbach , Marianna Sotomayor, Frank Thorp V and Dartunorro Clark contributed.
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