IRS And FBI Officials Walk Through Manafort’s Foreign Money Flow

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ALEXANDRIA, VA — Paul Manafort’s businesses between 2010 and 2014 collected more than $16 million in income that it failed to report to the IRS, according to the testimony of an IRS official Wednesday at Maanfort’s trial in Virginia for tax fraud and bank fraud.

Michael Welch, a revenue agent for the IRS, said that he came to that estimation by using Manafort’s own approach of only reporting income once it hit the U.S. He offered other versions of the analysis that estimated Manafort’s unreported income on the basis of when it landed in foreign entities prosecutors have linked to the former Trump campaign chairman. The estimates yielded by that approach were also “conservative,” Welch said, because he considered certain wires from foreign accounts — including those for a Florida dentist, a New Jersey horseback riding account and “International Yacht Collection” — to be business expenses that can be deducted from Manafort’s income.

He was following the testimony of Morgan Magionos, an FBI forensic accountant for who explained a chart she created showing that more than $15 million was wired from Manafort-controlled foreign accounts to pay for goods, services and real estate that Manafort and his family purchased between 2010 and 2014.

Their emotionless testimony was an atmospheric comedown to the day and half Manafort’s former co-defendant and longtime business deputy Rick Gates spent on the stand. His explosive testimony, which started Monday afternoon and stretched through Wednesday morning, included damning revelations about Manafort’s involvement in the alleged crimes as well as to his admissions to other crimes and embarrassing conduct not related to the current charges.

Manafort is accused of tax and bank fraud, much of it related to his work as a political operative in Ukraine before joining the Trump campaign. Prosecutors allege that the money was income that Manafort hid from his accountants and bookkeepers by wiring it directly to vendors, many of whom testified for the government earlier in the ongoing Virginia trial. He has pleaded not guilty to all charges.

Magianos walked prosecutors on Wednesday afternoon through how she created the charts tracking the flow of money from Manafort’s foreign accounts to his real-estate purchases and to vendors who sold him goods and services.

Among the evidence prosecutors presented during Magionos’ testimony were documents used to open the foreign bank accounts, which included Manafort’s name and even copies of the front page of his passport. Magionos testified that emails from Manafort instructed a Cypriot law firm to complete certain wire transfers that aligned with invoices from the vendors. In the emails, which prosecutors displayed for the court, Manafort described the foreign accounts as “my” accounts.

Magionos also explained a chart she created showing the money that flowed into the foreign accounts that prosecutors have linked to Manafort. She said that much of the money flowed in from entities linked to Ukrainians who were funding Manafort’s political work.

In his cross-examination Manafort attorney Richard Westling asked Magionos about the signatures on some of the bank records that were referenced in her charts. Westling asked her about the differences between different signatures, suggesting that not all of the documents with Manafort’s signature were actually signed by Manafort.

Magionos conceded that there were differences but also pointed out that funds from the bank account in question largely benefitted Manafort.

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