Paul Manafort trial: Scramble for cash led to false loan applications, prosecutors say
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The star witness at former Trump campaign chairman Paul Manafort’s fraud trial says he stole from his former boss because of personal struggles. AP’s Eric Tucker was in the court room and says it was “by far the most dramatic day of testimony.” (Aug. 7)
AP
ALEXANDRIA, Va. – As Paul Manafort scrambled for cash in 2016 to make up for declining consulting income abroad, the former Trump campaign chairman submitted loan applications allegedly littered with false statements and misrepresentations in pursuit of more than $8 million from banks in California and New York.
In one case, while seeking a $5 million loan from the Banc of California, federal prosecutors in Manafort’s tax and bank fraud trial Thursday presented documents that allegedly showed $4 million in inflated business income, a failure to disclose a $3.4 million loan secured just days before his March 2016 application and sole ownership in a $25 million property that actually belonged to his wife.
Gary Seferian, a senior vice president at the California bank, told a federal court jury here that bank officials later discovered the ownership discrepancy on the $25 million property and approved a lesser $1 million loan amount. Manafort sought the money, the bank officials said, to finance a plan to renovate and re-sell houses in Los Angeles.
Had the bank learned that income had been overstated or that existing loans had not been disclosed, Seferian said he would have “stopped the application and spoken to our legal department.”
In a separate Manafort transaction in New York, prosecutors offered documents that had been submitted to Citizens Bank in January 2016 that falsely listed a rental property as a second home, failed to disclose an existing mortgage on a separate property and inflated his income by $1.5 million.
Even as Manafort offered up the $3.4 million refinance loan application on the New York City loft property listed as a second home, Melinda James, a Citizens Band mortgage loan assistant, testified Thursday that she found the same property listed for rent during an online search. Manafort stood to obtain a better loan rate by classifying the property as a second home.
Later, an Airbnb executive testified that the home listed for refinance and designated as a “second home†by Manafort had actually been listed for rent on the leasing agent’s website.
The property was briefly removed from the site while the loan was being processed, but was re-listed for rent after the loan was approved.
James alerted her superiors to the discrepancy along with concerns about the existence of an undisclosed mortgage on a second property that Manafort claimed to have owned outright.
James told a federal court jury that Manafort ultimately received the $3.4 million loan in March 2016, though she did not know how her concerns had been resolved. Four days later, according to bank records offered Thursday, Manafort applied for the California loan.
Earlier this week, Manafort’s business partner, Rick Gates, testified that he addressed the Citizens Bank questions by submitting phony documents, at his boss’ direction.
Manafort’s attorneys challenged the government’s interpretation of the loan documents, in part suggesting that the income Manafort claimed was money that had been earned but not yet received. They also disputed the government’s claim that Manafort did not disclose all existing mortgages. Â
In all, prosecutors have alleged that Manafort fraudulently secured more than $20 million in bank loans.
The testimony related to the bank fraud comes as prosecutors are expected to wrap up their case against Manafort by Friday.
The case against Manafort – 18 criminal counts of tax evasion, bank fraud and conspiracy – is the first to be tried by special counsel Robert Mueller and focuses on Manafort’s business dealings. It doesn’t directly have to do with Manafort’s work for President Donald Trump.Â
More: Paul Manafort trial: Judge T.S. Ellis III known as taskmaster, unafraid to speak his mind
More: Paul Manafort trial: Rick Gates admits padding expenses to pay for mistress, may have bilked inaugural committee
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