Testimony from Cindy LaPorta, an immunized witness in Paul Manafort’s trial who worked as his tax accountant, suggested that Manafort and Rick Gates requested inappropriate changes to tax documents and doctored letters in order to inflate income on loan applications.
Mueller alleges that Manafort and his deputy, Gates, began doctoring financial documents in order to obtain loans or to get better rates on loans. Emails submitted by the prosecution on Friday, along with testimony from LaPorta, started to fill in the details of those allegations.
Prosecutors first brought up discussion of a loan application Manafort submitted related to a New York City property in Soho, a property that both Gates and Manafort said in 2015 was a rental property. However, according to a January 2016 email from Manafort submitted on Friday, Manafort told an official at Citizen’s Bank that the property is a second residence, and CCed LaPorta on the email, explaining that LaPorta would back him up on that. LaPorta testified that she told Citizen’s Bank that the home was a second residence, even though she admitted in trial that it was actually used as a rental. LaPorta testified that Manafort would get a better rate if he applied for a loan using a residence, rather than a rental property.
In another 2016 discussion of a loan application at Citizen’s Bank, Manafort and Gates told LaPorta that they don’t qualify for a loan because of a 2012 $1.5 loan from Peranova Holdings. LaPorta testified that she then told Citizen’s Bank that the loan was forgiven in 2015. She said that either Manafort or Gates told her to relay that to the bank and that she relied on “their word.” Asked if she believed the loan had been forgiven, LaPorta said she did not believe that at the time. LaPorta also testified that she had seen documents that showed that there had been no payments on the loan between 2012 and 2014.
Emails submitted by the prosecution showed that Gates told LaPorta he would provide a letter on the loan forgiveness and then “chase down signatures.” LaPorta testified it was “highly unlikely” that documents had been signed yet because Gates’ email suggested that he was backdating a letter. A letter sent by Gates on Peranova letterhead declaring the loan forgiven was dated June 23, 2015, eight months before the mention of needing signatures in the 2016 email to LaPorta. LaPorta testified that it was a “false” document that she didn’t edit. Yet she passed it on to Citizen’s Bank, according to the emails and her testimony.
“I honestly believed that the bank would have to vet the document themselves,” LaPorta said when asked why she sent the document she knew was “false,” adding that she felt she was protected since she did not create the letter.
However, for yet another loan application Cindy LaPorta declined to pass along a letter to Citizen’s Bank about Manafort’s flow of income in 2014 and 2015 that was requested by Gates.
“I dismissed this letter,” she said. “I couldn’t agree to any of that.” Instead, she wrote a letter including “what I knew had happened,” she testified.
Finally, prosecutors raised August 2016 discussions of a loan application to Federal Savings Bank, which is run by Trump supported Steve Calk. In August 2016, Manafort asked LaPorta to create a profit and loss statement for his consulting firm showing that he would receive $2.4 million in November 2016 for consulting work in Ukraine. He wanted to send it to Federal Savings Bank, LaPorta said.
The statement would record Manafort’s income on an accrual basis (records income when earned), not a cash basis (records income when paid). LaPorta said that typically Manafort’s bookkeeping service prepared his profit and loss statements but that they kept the ledger on a cash basis, which would mean this request would violate that policy.
LaPorta testified that she initially agreed to prepare the profit and loss statement but declined to do so when she never received documents supporting Manafort’s claim that he would be paid in November 2016.
Manafort is on trial in Virginia for tax fraud and bank fraud charges. He has pleaded not guilty to all charges.