Manafort pleads not guilty to state mortgage fraud charges

The longtime GOP operative known for his dapper suits shuffled into the courtroom in downtown Manhattan dressed in a navy blue prison jumpsuit.
Image: Paul Manafort arrives to his arraignment in Manhattan Supreme Court on June 27, 2019.
Paul Manafort arrives to his arraignment in Manhattan Supreme Court on June 27, 2019.Yana Paskova / Getty Images

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By Adam Reiss and Rich Schapiro

President Donald Trump's former campaign chairman Paul Manafort pleaded not guilty Thursday to state charges of carrying out a multimillion-dollar mortgage fraud scheme in New York.

A gray-haired Manafort, who is serving a 7 1/2-year prison sentence on federal charges brought by former special counsel Robert Mueller, barely uttered a word during the proceeding at Manhattan Supreme Court.

The longtime GOP operative known for his dapper suits shuffled into the courtroom in downtown Manhattan dressed in a navy blue prison jumpsuit with white sneakers. Following the hearing, he limped out into the hallway, breaking into a smile on his way out.

The appearance marked the first time Manafort, 70, faced a New York judge after being hit with a 16-count indictment in March on fraud charges brought by the office of Manhattan District Attorney Cyrus Vance Jr.

Trump has the power to pardon Manafort on federal charges, but the president would have no authority to intervene in the event of a conviction on state charges.

New York prosecutors say Manafort falsified business records to obtain millions of dollars in residential mortgage loans in a scam that began in December 2015 and continued until three days before Trump's 2017 inauguration. He faces up to 25 years in prison if convicted on the top count of residential mortgage fraud, a senior law enforcement official has told NBC News.

Some of the alleged offenses outlined in the indictment mirror those charged by Mueller. Outside court, Manafort's lawyer Todd Blanche said he would move to dismiss the indictment based upon New York's double jeopardy laws, which prevent a defendant from being tried a second time on the same charges.

"In our view, the laws of New York do not allow the people to do what they did in this case," Blanche said.

Manafort is being held at a federal detention center in downtown Manhattan. He arrived in New York about 10 days ago after a transfer from a federal penitentiary in Pennsylvania.

Prior to Manafort's transfer to New York, his lawyer requested that he be allowed to remain in federal custody in Pennsylvania to avoid having to deal with the conditions at Rikers Island or another state facility.

The Justice Department intervened, resulting in his placement at the Metropolitan Correctional Center.