Manafort Tax Preparer Testifies On Denials About Foreign Bank Accounts

August 3, 2018 11:39 am

A tax preparer returned to the stand Friday morning in the trial of former Trump campaign chairman Paul Manafort where he testified on multiple interactions he had with Manafort and his then-business partner Rick Gates in which they denied that they controlled or owned foreign bank accounts.

Prosecutor Uzo Asonye walked tax preparer Philip Ayliff through Manafort’s individual tax returns from 2010-2014, signed by Manafort, where the box reporting foreign bank accounts was checked no.

Manafort faces numerous charges of bank and tax fraud. He has pleaded not guilty. Gates, his former protege, has pleaded guilty, is cooperating with prosecutors, and is expected to testify against Manafort later in the trial.

Ayliff also testified on information his firm provided Gates to explain what sort of foreign accounts needed to be reported to the government.

Ayliff was also questioned about email exchanges he and other employees at his firm had with Gates, including inquiring about the source of money used to purchase Manafort’s town house in Brooklyn.

Gates said in an email that the house was purchased using funds from a savings account belonging to Manafort’s wife Kathleen. Gates said that information came from “PJM,” whom Ayliff said he understood to be Paul Manafort. According to special counsel Robert Mueller’s indictment, the Brooklyn home was paid for by funds from a Manafort-controlled account in Cyprus.

Later in Ayliff’s testimony, he read emails submitted by the prosecution in which Manafort asked Ayliff to tell financial institution UBS that a New York City property is a personal residence. Ayliff testified that he refused to do so because his understanding was that it was a rental property.

Prosecutors repeatedly asked Ayliff about Gates’ involvement in communications about the tax returns for Manafort and his consulting firm, presumably to head off any argument by the defense that Gates was behind the alleged schemes. Ayliff testified that Manafort asked for the rental property to be classified as a personal residence and that Gates was not involved in that request.

Lawyers for special counsel Robert Mueller also returned to the 2012 $1.5 million Peranova loan referenced in the bookkeeper’s testimony on Wednesday. Ayliff testified that there were no payments on the loan in 2013 and 2014, even though Washkuhn testified on Thursday that Gates asked her to reclassify the $1.5 million loan as income in 2015, explaining that it would be forgiven. In the indictment against Manafort, Mueller alleged that Manafort reclassified a loan as income in order to inflate his income on a loan application.


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