Delays In Paul Manafort Trial Mean Prosecutors Might Not Rest Friday After All

15 hours ago
Originally published on August 10, 2018 3:18 pm

Updated at 12:45 p.m. ET

The ninth day of Paul Manafort's trial for bank and tax fraud began slowly on Friday, raising questions about whether prosecutors would be able to rest their case before the weekend as expected.

Judge T.S. Ellis III broke early for lunch before any witnesses were called to the stand. It was not clear why.

Most of the morning was spent in bench conferences among prosecutors, the defense and the judge. White noise is played in the courtroom during such conferences so journalists and the public can't hear what is being said.

Ellis eventually called the jury into the courtroom. He reminded the jurors not to discuss the case with anyone and said that a defendant is presumed innocent and the burden of proof is on the prosecution.

"Let me underscore for a minute that it's very important that you not discuss this case with anyone," Ellis said. "It's also important to keep an open mind."

Ellis then told the jury and public that witnesses would take the stand again in the afternoon, and he announced a break for an early lunch.

Speed bump

As recently as Thursday, prosecutors had said they expected to rest their case on Friday after two weeks of detailed testimony from accountants, bookkeepers, luxury vendors and Manafort's former business partner.

But they also said they wanted to call four or five more witnesses to testify. The conferences on Friday morning might mean there isn't enough time for them on Friday. Court has adjourned around 5:30 every day.

Manafort, who served as Donald Trump's campaign chairman during the summer of 2016, is on trial facing charges relating to the fortune he made via political consulting overseas. Prosecutors say he evaded taxes on millions of dollars by hiding the money in shell companies and bank accounts based mainly in Cyprus.

They also allege that after Manafort's income dried up — after his most important political client in Ukraine was ousted from power — Manafort lied to banks to qualify for loans to sustain his luxurious lifestyle.

Once prosecutors rest their case, the defense will have an opportunity to call witnesses to the stand. It's unclear whether Manafort's team will have any witnesses testify, but the trial still seems on track to conclude next week.

Manafort has pleaded not guilty and his defense attorneys have blamed any financial wrongdoing in the case on his former partner Rick Gates, who has pleaded guilty to related charges as part of an agreement with the Justice Department.

Prosecutors present a paper trail

Gates may have been the prosecution's most exciting witness — as well as the centerpiece of Manafort's defense — but he was only one of many who have appeared in the trial.

Gates testified early in the week for parts of three days, but the rest of the trial has been consumed by accountants and bankers who worked on Manafort's taxes and processed his bank loan applications, as well as vendors who sold him numerous high-priced items like luxury cars and custom suits.

Throughout the trial, prosecutors also have relied on emails sent to and from Manafort about his properties, as well as the accountants who worked with his finances.

That may have been a countermeasure against one of the defense's arguments, which was that Manafort was not intimately enough involved in his own finances to have deliberately committed financial crimes.

Prosecutors must prove to jurors that if Manafort did evade taxes or misguide banks, he did so intentionally and not by mistake.

Bankers' evidence

To that end, prosecutors on Thursday questioned Melinda James, a loan assistant at Citizens Bank, and Peggy Miceli, a vice president at Citzens Bank.

Manafort received a $3.4 million refinancing loan from Citizens Bank in 2016 on a property he owned in New York. Prosecutors allege that in applying for that loan, Manafort lied by classifying it as his second home instead of an investment or rental property. Actually, they said, he was renting it out.

Miceli testified that Manafort would not have been eligible for a loan that large against the property had the bank known it was being rented. Earlier in the day, a representative from Airbnb testified that the property had been listed as available for rent for much of 2015 and 2016.

During James' testimony, prosecutors showed the jury an email from Manafort to his son-in-law notifying him that the bank was sending an appraiser to assess the property.

"Remember, he believes that you and Jessica are living there," Manafort wrote. Prosecutors said that showed Manafort knew he was misrepresenting how the home was being used.

The judge ... apologizes?

Ellis has had a massive effect on the quick pace of Manafort's trial, but he has had an even larger impact on the tone of the courtroom.

He has admonished prosecutors almost daily. Last week, he took them to task because he said they were sowing resentment in the jury for Manafort's wealth. The judge growled at them this week to "get to the heart of the matter."

On Thursday, however, Ellis offered something different: an apology — or close to it. And on Friday, prosecutors requested another one.

Ellis upbraided the government's lawyers on Wednesday for allowing an IRS expert witness into the courtroom to watch trial proceedings before he testified. But as prosecutors noted in a motion filed after court on Wednesday night, the judge had previously said the IRS witness could stay in the courtroom.

Prosecutors argued in the motion that Ellis' criticism on Wednesday could imply that the government was trying to skirt rules in its trial tactics and gain an unfair advantage, when in fact Ellis had explicitly given prosecutors permission for the expert witness to stay in the room.

"This prejudice should be cured," prosecutors wrote.

Ellis opened court on Thursday by admitting he "may have been wrong" and that he sometimes makes mistakes "like any human — and this robe doesn't make me any more than a human."

"Any criticism of counsel should be put aside," the judge said. "It doesn't have anything to do with this case."

He made statements during witness testimony Thursday related to bank fraud that prosecutors have taken issue with again. While prosecutors were questioning a banking witness about a $5.5 million loan that Manafort applied for but didn't get, the judge said, "You might want to spend time on a loan that was granted."

Prosecutors filed a motion Friday arguing the judge's comment "misrepresents the law regarding bank fraud conspiracy, improperly conveys the Court's opinion of the facts, and is likely to confuse and mislead the jury."

Prosecutors asked the judge to provide a clarifying statement, but as of the lunch break Friday, Ellis had not spoken yet to the issue in open court.

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