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Prosecutors' bottom line: Manafort hid $16 million from IRS for luxuries

On Wednesday, the government connected the dots on the tax evasion charges Manafort faces.
by Pete Williams /
Image: Paul Manafort arrives for a court hearing
Paul Manafort arrives for a hearing at federal court on June 15 in Washington.Mandel Ngan / AFP - Getty Images file

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WASHINGTON — Judge T.S. Ellis instructed the jury on Thursday to "put aside" his criticism of Robert Mueller's prosecutors, after the government asked the judge to correct what they said was a mistaken tongue-lashing he gave them Wednesday.

The judge had been angry that an IRS witness had been in court during previous days of the trial. Ellis said he does not allow that, with an exception for expert witnesses.

In a written motion submitted before court convened Thursday, Mueller's prosecutors reminded the judge that on the first day of the trial, the government asked to exclude witnesses from sitting in the courtroom to watch others testify, "with the exception of our expert and our case agent," Michael Welch of the IRS. Defense lawyers had no objection, and the judge granted the motion.

"The court's reprimand of government counsel suggested to the jury — incorrectly — that the government had acted improperly and in contravention of Court rules. This prejudice should be cured," the prosecutors said in the motion, filed with the trial transcript attached.

In response, Ellis admitted that he "may have well been wrong" and that he hadn't read the transcript.

As the government moved into the final stages of presenting its case against Paul Manafort, the numbers that prosecutors have alleged in his financial fraud trial were finally made clear for the jury Wednesday, the seventh day in court.

Manafort is charged with tax evasion and bank fraud, accused of failing to report millions of dollars that he was paid for political consulting work in Ukraine, before he briefly served as President Donald Trump's campaign chairman in 2016.

In previous days, the jury saw individual pieces of the puzzle, but not until Wednesday did special counsel Robert Mueller's team begin putting them together on the tax evasion charges.

Government witnesses said that from 2010 through 2014, Manafort earned $30,303,344 in personal income but reported less than half of that, $13,832,298, on his tax returns. Prosecutors said he failed to tell the IRS about the money he spent buying clothes, houses, antiques, and home improvements — a total of $16,471,046.

The government said Manafort's consulting firm was paid a total of nearly $66 million during that period, with the money deposited in bank accounts set up in Cyprus. An FBI accountant testified that the funds were transferred to accounts Manafort opened there. Prosecution witnesses said he wired millions of dollars from those accounts directly to businesses in the United States, failing to report the sums as income.

Manafort's personal income was less than the total deposited in the foreign accounts, because the firm's expenses were high, the government's figured showed.

He is also accused of failing to abide by federal laws that required him to disclose the existence of the accounts.

Prosecutors said they hoped to finish presenting their case Friday. Manafort's lawyers will then begin presenting their defense.

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