That Paul Manafort allegedly spent millions on luxury goods and services using foreign wire transfers of income he failed to report on federal tax forms is an accusation that special counsel Robert Mueller has made since he first brought charges against the former Trump campaign chairman last October.
But at Manafort’s ongoing trial in Virginia this week, prosecutors have hinted that there was something even fishier in his financial relationship with a number of high-end vendors, many of whom were called to the stand to testify Wednesday and Thursday.
A number of them were asked about seemingly faked invoices that appeared to have come from their companies, but were just a little off. Maybe the name of the company was misspelled, or the zip code was off by a digit. In one case, the executive at a home entertainment installation company in Florida explained that the invoice billed for general goods and services, whereas his company went into great detail in its invoices about what its clients were being charged for.
These mystery invoices bear the stamp of a “Loyal Bank” in St. Vincent and the Grenadines. A bank by that name was indicted for money laundering earlier this year by a federal grand jury in the Eastern District of New York.
The vendors testified that they never saw the faked invoices before federal investigators approach them with the documents. They didn’t issue the invoices, they said, nor did they receive the payments listed on them.
The company often being billed on the invoices, revealed in testimony, was Global Endeavor, which was among the foreign financial entities Manafort allegedly controlled, according to Mueller’s indictments in D.C. and Virginia. The indictments say the entity was incorporated in the Grenadines, and that it was a source of some, but not all, of the foreign wire transfers Manafort allegedly used on goods, services and real estate. The Global Endeavor wire transfers cited in the Virginia indictment begin in 2013.
Prosecutors haven’t explained their theory of the apparently fake invoices, nor have their questions to witnesses suggested any particular explanation. So where are they going with this line of questioning?
A hint about what could be going on with the invoices is in their timing. The apparently fake invoice for a New York landscaper, whose company’s full name and address were missing from the invoice in question, was dated 2014.
The prosecutors have alleged that 2014 was when Manafort’s income began to dry up due to the ouster of Ukrainian president Viktor Yanukovych, his client. The prosecution alleges that after years of hiding his income, Manafort then sought to inflate it for the purpose of seeking bank loans, which helped him maintain his lavish lifestyle.
Could the falsified invoices be offered to show tactics Manafort used to create “cash out of thin air,” as prosecutor Uzo Asonye said in his opening statement?
In the D.C. case, Manafort has also been charged with a conspiracy to launder money, but that is not a charge being tried in Virginia. Manafort has pleaded not guilty to all charges.
However, there also signs that the defense may seek to tie the fake invoices to Rick Gates, Manafort’s longtime business deputy who made a plea deal with Mueller and is now the government’s star witness in the case.
Manafort previewed in his opening statement a defense that would seek to blame Gates for Manafort’s financial misdeeds. Manafort attorney Thomas Zehnle even accused Gates of embezzling money.
Manafort’s attorneys, when questioning the vendors about the apparently fake invoices, stressed that the vendors aren’t aware of who was the signatory on the St. Vincent bank.
If Gates was involved with the fake invoices, prosecutors could be laying the groundwork to ask him about them directly, in the hopes of taking some air out of the balloon before Manafort’s lawyers confront him with them on cross examination.
It may take the testimony of Gates to clear up this mystery.
Correction: Due to an editing error, this story misstated Manafort’s plea of not guilty. It has been corrected to reflect that Manafort has pleaded not guilty to all charges.
Read More →