ALEXANDRIA, Virginia – A former accountant testified how she helped falsify income and tax statements for Paul Manafort, U.S. President Donald Trump’s ex-campaign chairman, as prosecutors further buttressed their tax and bank fraud case against him.
The August 3 testimony by Cindy Laporta -- on the fourth day of Manafort’s criminal trial -- shed further light on Manafort’s complicated finances and the income he earned primarily as a political consultant for Ukrainian politicians, including former President Viktor Yanukovych.
Laporta was the latest in a string of accountants that prosecutors have put on the stand, to build their argument that Manafort had lied on tax returns, loan applications, a federal bank declaration, and other records.
Manafort’s trial, being held in U.S. federal court in Alexandria, Virginia, is the first arising out of Special Counsel Robert Mueller’s investigation into the interactions between Trump associates and Russian officials.
The 18 charges against Manafort predate his time managing Trump’s U.S. presidential election campaign in 2016. Though the charges concern the work he did in Ukraine for Yanukovych, they don’t directly deal with Russia, nor with questions of Trump officials’ dealings with Russian officials.
In previous days, prosecutors had called on home renovators, audiovisual technicians, landscape designers, and a high-end tailor to show how Manafort had an extravagant lifestyle that he sought to maintain, even after his Ukraine work dried up following Yanukovych’s ouster as president in 2014.
Assistant U.S. Attorney Uzo Asonye walked Laporta through e-mails and balance sheets from ledgers and tax filings, showing how Manafort, allegedly with the help of his deputy Rick Gates, tried to inflate and deflate income by declaring, then writing off, loans made to his consulting business from foreign entities, many based in Cyprus.
The foreign entities, prosecutors have suggested, were all shell, or pass-through, companies, set up by Manafort to handle the income he was earning from his Ukraine work.
Numerous Properties
Manafort owned homes and properties in Alexandria and Arlington, Virginia, as well as in a tony Long Island community, and townhouses in Brooklyn and Manhattan, New York.
Prosecutors charged that Manafort lied on applications for bank and mortgage loans by back-dating loans issued by one of his foreign entities to his consulting company. He also allegedly failed to declare he had stashed some of his income in foreign bank accounts; failing to declare those foreign accounts to U.S. authorities is a crime.
Laporta, who filed Manafort’s tax returns beginning in 2013, had been granted immunity to testify -- a move that suggested she may have been complicit in some of the alleged financial crimes Manafort has been charged with.
At one point, Asonye asked Laporta why she didn’t object when in 2015 she was presented with documents including a back-dated loan that was forgiven.
“I had a couple choices. One, I could have refused to file the tax returns, which could have exposed our firm to potential legal liability,” she told the court. “Or two, I could have called [Manafort and Gates] liars. But then they were longtime clients of the firm and I did not want to do that either."
“Do you regret what you did?” asked Asonye.
“I very much regret it,” Laporta responded.
“Do you take responsibility for your actions?” Asonye asked.
“I do,” she said.
As he has every day since the trial began, Manafort sat quietly throughout the proceedings, dressed in a suit and tie, flanked by his defense lawyers.
Much of the documentation concerning back-dated bank loans and other accounting issues involved Gates, who was also charged with various financial crimes. Earlier this year, he pleaded guilty to financial charges and lying to federal investigators, and agreed to cooperate with Mueller’s investigators.
On August 2, prosecutors said they had planned to call Gates to testify, but that did not happen, and they gave no indication in court when that might occur.
Other Cases
Prosecutors have said they intend to complete their arguments as early as next week. Once that happens, Manafort’s defense team will present its case to try and persuade the jury of his innocence.
If the trial continues quickly, it could wrap up before a second, more consequential, trial against Manafort begins. It is scheduled to start in September.
That trial, in U.S. federal court in Washington, D.C., focuses on allegations that Manafort failed to register as a foreign agent when he was working for Yanukovych and his Ukrainian political party.
While Manafort's is the first case that Mueller has brought to trial, he has charged 31 other people with dozens of charges including conspiracy, failure to register as foreign agents, and lying to federal law enforcement.
One of Mueller's leading cases involves 12 Russian military intelligence officers who were accused of hacking and leaking Democratic party documents in an effort to sway the 2016 presidential election.
Others who have pleaded guilty to Mueller’s charges include Trump’s first national security adviser, Michael Flynn.
Trump has repeatedly attacked Mueller’s investigation, denying any effort by him or his associates to collude with Russian officials to sway the election.