Special counsel Robert Mueller’s office last week issued a new set of federal charges – including tax fraud and bank fraud counts – against ex-Trump campaign manager Paul Manafort and business associate Rick Gates.
The 32-count federal indictment issued by a Virginia federal grand jury has 25 new federal charges against Manafort and Gates, who also was a top Trump campaign officer. Seven of the new federal charges in the indictment replicate federal counts that were pending before in another indictment from October 2017.
The federal charges are related to alleged conduct that does not relate to any work that was done for the Trump campaign. Rather, the alleged crimes in part relate to work they did while working for the president and after.
According to a spokesperson, Manafort is innocent of the federal charges. He noted that the new charges against Manafort have nothing to do with Russia and anything regarding collusion in the 2016 election. Manafort remains confident that he will eventually be acquitted and any violations of his rights under the Constitution will be addressed.
Manafort stands accused of $30 million in money laundering via offshore accounts, which is up from the $18 million that was originally alleged. Gates is accused of laundering the same amount as before: $3 million.
Mueller’s office stated in the court filing that they obtained the indictment in VA because several of the charges could not have been filed in DC without the approval of the defendants. Charges filed last week include:
- 16 counts of filing false tax returns
- Seven counts of failure to file reports of bank accounts with foreign banks
- Five counts of bank fraud conspiracy
- Four counts of bank fraud
As in the last indictment, the new charges are related to consulting and lobbying work that Gates and Manafort did for Ukraine and its president at the time, Viktor Yanukovych. As part of the current indictment, federal prosecutors claim that after Manafort and Gates saw their income fall from 2015 to 2017 due to losing Yanukovych as a client, they got money from real estate owned by Manafort by using the property to get loans from several banks.
Manafort and Gates allegedly secured $20 million in loans fraudulently inflating the income of Manafort and his firm’s income by not disclosing debt to qualify for loans.
Gates admitted in a guilty plea last week that he and Manafort had sent several letters to the DOJ in 2016 and 2017 that improperly asserted they had not lobbied for Ukraine in the US. The federal investigation into their lobbying started in September 2016, about one month after Manafort left the 2016 Trump campaign.
The new federal indictment also removes Gates from the federal charges, and it removes numerous counts from the October indictment. In total, Manafort now has five federal criminal charges against him in Washington.
According to Patrick Cotter, an ex-federal prosecutor in private practice, what Manafort and Gates did is ‘pretty raw criminality.’ The indictment states these two men were on a ‘two year tear’ of lying to many banks about their income. To federal prosecutors, this is crude, extensive and bold criminal behavior but not very sophisticated. Cotter noted there is one hero in all of this: a bookkeeper who turned down a request by Gates to increase a revenue claim.
Cotter said the federal indictment suggests a lot of risk for the defendants at trial, given their ages and how many millions in fraud has been alleged. He believes they could be facing life in prison.
The indictment states that an employee of one bank conspired with Manafort in the bank fraud attempted. In 2016, that co-conspirator wrote that a document they were using looked doctored and asked that they do a clean Excel document and send that.
When Manafort started to work for the Trump campaign, he did so without a salary. He pitched his ability to work at no cost as an appeal for Trump. He is known to be stingy and also values people who at least appear to be wealthy.
However, federal prosecutors say Manafort was taking out millions of dollars of loans in those months. One of those included a $5.5 million loan that he tried to obtain the same month he joined the campaign.
Another detail in the federal indictment states that Manafort had financial pressures even as he was at the top of the Trump campaign. A bank lender issued questions about a delinquency of $300,000 on an American Express card, which was 90 days overdue. The issue was affecting Manafort’s credit score.
In response, Manafort had Gates write a letter that made the false claim that Gates and not Manafort had used the card and made the purchases.
The new federal charges also allege the men continued with the conspiracy even when FBI agents and federal prosecutors were investigating them.
Manafort and Gates were first hit with a 12 count federal indictment in October 2017. These were the first criminal charges in the Mueller probe of possible Russian interference in the last election. That indictment was focused mostly on financial transactions that involved the work Gates and Manafort did for Ukraine, as well as failure to tell the federal government they were lobbyists for a foreign government.
Last week’s filing comes at a time of uncertainty about when a trial could happen in the first case. It also is unclear who the defense attorneys will be. Last week, a US district judge criticized both sides because of the delays of the case. There still is no trial date.
Also unclear is what Gate’s legal strategy will be. Three of his attorneys requested to leave the case, and this request was granted last week. The details of the problems with attorneys are unclear. But after the indictment last Thursday, a new attorney filed a notice with the court that he would represent Gates.
Last week, a Gates associate did plead guilty to lying to FBI agents during the investigation.