November 22, 2017

Five things to know about the Manafort indictment

President Trump’s former campaign chairman Paul Manafort surrendered to the FBI on Monday morning.

Manafort and his business associate Rick Gates are accused of money laundering and tax evasion on tens of millions of dollars they made while secretly lobbying for a political party in Ukraine.

Although the sprawling 31-page indictment is a major milestone in special counsel Robert Mueller’s investigation, it doesn’t actually mention President Trump.Here are five things to know about the indictment:

Manafort was secretly lobbying for a pro-Russia political party in Ukraine.

Manafort and Gates are alleged to have conducted a multimillion-dollar lobbying campaign on behalf of a pro-Russia political party in Ukraine and its now-exiled leader, Viktor Yanukovych.

Manafort and Gates never registered with the Justice Department as foreign lobbyists, as is required by law. The indictment details the extensive foreign lobbying work they conducted over the course of a decade, as well as the lengths they went to keep their work shielded from public scrutiny.

The indictment says that Manafort’s foreign lobbying work continued through 2016, although the indictment does not mention the six months he spent running Trump’s campaign.

In 2005, Manafort launched a political consulting group called Davis Manafort Partners with staff in the U.S., Ukraine and Russia. The group lobbied members of Congress and their staffs on Ukrainian sanctions and elections and briefed them on allegations against Yanukovych and his Party of Regions.

Yanukovych was elected president of Ukraine in 2010.

In 2012, a group called the European Centre for a Modern Ukraine materialized in Belgium. The indictment describes the group as a “mouthpiece” for Yanukovych and his government, and claims that Manafort and Gates used it as a go-between for Yanukovych’s government and U.S. entities with interests in Ukraine.

Yanukovych fled Ukraine in exile in 2014 amid protests and allegations of widespread corruption.

All told, the Justice Department indictment claims that Manafort and Gates acted as unregistered foreign agents on behalf of Yanukovych and his Party of Regions — renamed the Opposition Bloc in 2014 — from 2006 to 2016. They allegedly used more than 30 entities in the U.S. and Cypress to hide their activities.

When confronted with the allegations of unregistered foreign lobbying, the Justice Department says Manafort and Gates lied or provided misleading statements about their activities.

Manafort allegedly used offshore accounts to launder money from his foreign lobbying.

Manafort and Gates made tens of millions of dollars lobbying on behalf of Yanukovych and his allies.

The indictment alleges that they funneled those gains — more than $75 million — through foreign bank accounts opened by themselves and their “accomplices” in Cyprus, Saint Vincent and the Grenadines, and Seychelles.

Manafort and Gates are alleged to have hidden the income from the IRS, reporting on their taxes that they did not hold foreign bank accounts.

The Justice Department lays out scores of specific transactions originating abroad that the government says Manafort used stateside to fund his lavish lifestyle.

He is also accused of using the offshore accounts to defraud banks by taking out mortgages that made him appear to have more liquid assets than he actually had, enabling him to obtain better interest rates on loans.

‘Conspiracy against the U.S.’ is among the 12 charges Manafort faces.

Manafort and Gates are both accused of committing “conspiracy” against the United States between 2006 and 2017 — a revelation that threatened to set off immediate alarm bells in Washington.

But the charge, as with the others laid out in the indictment, is related to their financial dealings, particularly the work that Manafort and Gates did overseas on behalf of a pro-Russian political party in Ukraine and their effort to launder money and evade taxes.

The charge does not constitute an accusation of “collusion” with a foreign power and is not related to work either party did for the Trump campaign.

According to the indictment, Manafort and Gates “together with others, knowingly and intentionally conspired to defraud the United States by impeding, impairing, obstructing, and defeating the lawful governmental functions of a government agency, namely the Department of Justice and the Department of the Treasury” — standard language used in federal tax crimes.

In addition to conspiracy and money laundering charges, the two also face charges of acting as unregistered agents of a foreign principal, making false and misleading statements about their overseas work, and failing to file the correct paperwork in connection with their foreign bank and financial accounts.

Manafort lived a lavish lifestyle.

The indictment explains how Manafort used his overseas income to support a “lavish lifestyle” in the United States that included multimillion-dollar real estate purchases, shopping sprees at luxury clothing stores, and high-end car purchases at Range Rover and Mercedes Benz.

In sum, Manafort is accused of laundering $18 million.

“Manafort, without reporting the income to his tax preparer or the United States, spent millions of dollars on luxury goods and services for himself and his extended family through payments wired from offshore nominee accounts to United States vendors,” the indictment states.

For instance, Manafort secretly wired more than $5 million to a company in the Hamptons for home improvement work between 2008 and 2014. He spent nearly $1 million on antique rugs at a store in Alexandria, Va.; more than $1.3 million at clothing stores in New York and Beverly Hills; and more than $800,000 on landscaping.

According to the indictment, Manafort used his overseas funds to purchase three properties in 2012, including a condo in New York, a brownstone in New York, and a house in Arlington, Va., just outside Washington. These real estate purchases totaled $6.4 million.

The indictment says Manafort borrowed millions of dollars from lenders using his properties as “collateral,” thereby allowing him to get cash in the U.S. without reporting his income or paying taxes on it.

“In order to increase the amount of money he could access in the United States, Manafort defrauded the institutions that loaned money on these properties so that they would lend him more money at more favorable rates than he would otherwise be able to obtain,” the indictment states

There is no mention of the Trump campaign in the indictment.

Mueller is ostensibly investigating whether President Trump’s campaign officials colluded with Russians during the 2016 presidential race, but Trump and his campaign are not mentioned once in the indictment.

Trump has already seized on the indictment as proof there was no collusion between his campaign and Moscow, pointing to the fact that it deals with Manafort’s work prior to the campaign.

“Sorry, but this is years ago, before Paul Manafort was part of the Trump campaign,” Trump tweeted Monday morning. “Also, there is NO COLLUSION!”

Still, Manafort led Trump’s campaign in some capacity from March through August 2016 and the allegations in the indictment indicate that Manafort is accused of illegal foreign lobbying on behalf of a pro-Russia political party from 2005 through 2016.

That has sparked speculation that Mueller is seeking to first build an air-tight case surrounding the financial crimes of Trump’s associates with the hope of later squeezing them to dish about alleged collusion as part of a deal.

Mueller was given broad authority by the Justice Department to investigate not only potential links between the Trump campaign and Moscow but also any matters that arose as a result of the probe.

As a high-level campaign associate, Manafort theoretically could provide valuable information to prosecutors as they seek to find evidence of collusion between the campaign and the Russian government.

Source: The Hill

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