Witness: Manafort Wouldn’t Have Got $1M Loan Without Doctored Document

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August 9, 2018 11:27 a.m.

ALEXANDRIA, VA — Paul Manafort would have not received $1 million commercial loan for he and his then son-in-law if the bank knew that he had exaggerated his business income by 11-fold, a witness at his ongoing trial testified Thursday.

Gary Seferian — an employee at the bank that approved the loan in May 2016, while Manafort was leading the Trump campaign — was questioned about a financial statement prosecutors had previously shown was doctored to show his consulting firm’s income to have been about $4.5 million. The “actual” statement, in the prosecutors’ words, that Manafort’s bookkeeper previously testified to be legitimate showed the firm’s income for that year to be $400,000.

Seferian said Manafort “would not have qualified” for the $1 million commercial loan, which Manafort and his daughter’s then-husband Jeffrey Yohai  had claimed they were going to use to flip homes in Los Angeles.

Seferian was one of a number of bank employees who testified Thursday about loan applications filed by Manfort filed in late December through early March,  just before he joined Donald Trump’s presidential campaign.

One loan discussed Thursday was a $3.4 million mortgage on a Manafort condo in Monday that he closed on March 4, where prosecutors suggested his loan application included falsities; another allegedly fraudulent application  that witnesses testified about Thursday was eventually turned down.

Manafort is facing charges of bank fraud and tax fraud, mostly stemming from consulting work he did in Ukraine predating the 2016 American presidential election. He has pleaded not guilty.

His attorneys sought to poke holes in the prosecutors’ narrative about the loans. His lawyer Jay Nanavatti defended the doctored document in questioning that suggested it was simply using a different method of accounting to show what Manafort’s firm earned in 2015.

As for the $3.4 million loan Manafort, asked questions that cast doubt over whether Manafort was to blame for the appearance of the false information on the final loan application

The government called bank employees, as well as an Airbnb company official, to suggest that Manafort misled the bank in the process of applying for the loan on the condo, dubbed the “Howard Street” property.

With the morning testimony of Melinda James, a mortgage loan assistant at Citizen’s Bank, prosecutors pointed to the failure of Manafort, at the time of closing on the Howard Street condo, to disclose a separate loan he had obtained on another property of his in New York. They also asked James about his allegedly false claim in the loan docs that the Manhattan property was a second residence, rather than a rental.

James said that both details would have affected the terms of his loan, a claim that was backed up by another bank employee in charge of analyzing loan applications, who testified later in the afternoon.

Citizens Bank underwriter Peggy Miceli said that, without going through a special exceptions process, the maximum loan Manafort could receive by taking it out on a rental property was $1 million, and that rental properties were not even eligible for the specific kind of loan Manafort successfully sought.

Prosecutors also brought to the stand Darin Evenson, an Airbnb employee who testified on the rental company’s business records associated with Manafot’s Manhattan condo. The records showed that the Airbnb listing for the two-bedroom condo — advertised as “Amazing Full Floor Loft in SoHo” — was pulled from the website on February 26, 2016 and re-listed on March 27, three weeks after Manafort closed on the loan.

James, the bank employee, read emails and documents that claimed Manafort was using the Howard Street property as a second home. At one point, prosecutors displayed an email from Manafort to Jeff Yohai — his then son-in-law who was listed on the condo’s Airbnb account — telling him to “Remember” that an appraiser hired by the bank to inspect the property “believes that you and Jessica are living there.”

In his cross-examination of the Airbnb employee, Manafort attorney Jay Nanevatti’s questions hinted at the possibility that Manafort’s daughter and then-husband were in fact living at the Manhattan condo many days of the year, and Evenson confirmed that some three-quarters of Airbnb hosts list their primary residences for rental on the website.

Nanevatti also pointed Evenson to the “house rules” listed for the condo on its listing, according to Airbnb records: “As you expect me to behave in your home.”

Nanevatti, in his questioning of the Citizens Bank employees, focused on muddying the waters around what Manafort told the bank when about separate loan on the other New York property. That $5.3 million loan was taken on Manafort’s Brooklyn townhouse on February 9, and Miceli had testified for prosecutors that if the bank had known about that loan, it would have affected the loan’s value and rate.

Nanevatti emphasized that at the beginning of the loan application process, documents show that Manafort had not yet closed on the loan on his Union Street property. He zeroed in on emails sent by Manafort on February 24 to the bank saying that he had been approved of a loan on the Brooklyn property, as well as insurance documents sent to the bank the day before showing that loan.

James, however, also said that Manafort’s use of the word “approve” didn’t lead her to believe that it had been finalized; it’s common for borrowers to shop around to multiple banks during the process. She also testified that Rick Gates told her over the phone, after Manafort’s February 24 email, that they weren’t moving forward with the loan, and that night Gates sent her an email with insurances docs showing no loan on the property. She said she didn’t realize that those docs, dated for 2015, were actually older than the more recent documents Manafort had previously sent the bank.

To fill in some of the holes Manafort’s attorneys had poked in government’s case, prosecutor Uzo Asonye highlighted that Manafort was copied on emails Gates sent with the outdated outdated insurance documents.

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