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Tierney Sneed

Tierney Sneed is a reporter for Talking Points Memo. She previously worked for U.S. News and World Report. She grew up in Florida and attended Georgetown University.

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ALEXANDRIA, VA — Prosecutors on Monday, for the first time since Paul Manafort’s trial began last week, brought up $10 million that Manafort received from Russian Oleg Deripaska.

Deripaska is a Russian oligarch, ally of Russian president Vladimir Putin, and former business associate of Manafort’s who backed some of his work in Ukraine. Deripaska claims Manafort owes him millions of dollars following his investment in one of Manafort’s projects, a Ukrainian telecom company called Black Sea Cable.

During the 2016 campaign, Manafort reportedly discussed with his Ukrainian fixer, Konstantin Kilimnik, the possibility of giving Deripaska private briefings, suggesting that such briefings could be a way “to get whole.” 

The $10 million payment from Deripaska to Manafort was previously referenced as a loan to Manafort in a 2017 search warrant that was unsealed earlier this year. The document said that Manafort and his wife claimed on a 2010 tax form that they owed $10 million to Deripaska.

Prosecutor Uzo Asonye did not go into much more detail about the $10 million, which he brought up while questioning Manafort tax preparer Cindy Laporta. Asonye was asking Laporta about a summary she prepared for Manafort of wire transfers his businesses received between 2005-2015, where the $10 million from Deripaska was listed as a loan. Laporta said she was told nothing about the loan.

Asonye also asked her if the loan was ever reclassified as income in the financial summaries she put together for Manafort, based on his tax returns through 2015. She said no.

The inquiries came in a line of question where Asonye seemed to be suggesting that Manafort was reporting as loans money that was actually income. Prosecutors have accused Manafort of using these “sham” loans as a way to reduce his taxable income and, thus, lower his taxes.

Manafort has pleaded not guilty to charges of bank fraud and tax fraud, which were brought as part of special counsel Robert Mueller’s investigation.

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In a major victory for voting rights, the Michigan state Supreme Court, where a majority of the justices are Republican, will let voters this fall approve or reject a ballot initiative to reform the state’s redistricting process into a 13-person independent commission. The conservative activists who were challenging the ballot measure said that they are accepting the court’s decision and will not continue the legal fight.

Thousands of pages of internal documents and emails related to President Trump’s now-defunct voter fraud commission became public on Friday, after a Democratic commissioner brought a lawsuit alleging a lack of transparency. The docs show internal discussions about drafting a letter to state election officials seeking voter roll data — a letter that, when sent last year, prompted backlash among Democratic and Republican election officials alike. The Democratic commissioner, Maine Secretary of State Matt Dunlap, said in a letter with the release of the documents that the internal materials lack any “evidence of widespread voter fraud.”

“That the commission predicted it would find widespread evidence of fraud actually reveals a troubling bias,” Dunlap said.

Another batch of internal documents related to the Trump administration’s move to add a citizenship question to the Census dropped over the weekend, as part of litigation over the issue. The documents offer more evidence that the Commerce Department, led by Secretary Wilbur Ross, was working on adding the question well before the Justice Department formally requested that it do so, ostensibly to help with Voting Rights Act enforcement. Nonetheless, the DOJ request was the administration’s initial justification for adding the question.

The New York Times on Thursday had a must-read report on a county in North Carolina that is particularly harsh on people who break election laws by voting while on probation or parole, often arresting or jailing them. Alamance County’s felon disenfranchisement law is currently the subject of a lawsuit brought by a civil rights group, which contends that it is racist. Voters who were prosecuted under the law told the Times that no one told them, during their sentencing hearings, that they were not allowed to vote while on probation or parole.

A North Carolina Supreme Court candidate is suing over a recently passed GOP law removing his party ID from his name on November’s ballot. Any candidate who changed party affiliations within 90 days of filing will not have that party label next to his or her name, under the new law, which appears to be an effort by Republican legislators to boost the GOP incumbent in the state Supreme Court race. They had previously canceled a primary election for the seat in order to help the incumbent, but that plan backfired when another candidate, Chris Anglin, jumped into the race as a Republican. Anglin, who switched parties three weeks before filing, is now suing over the new law blocking his party ID from appearing on the ballot.

On Monday’s 53rd anniversary of the Voting Rights Act, former First Lady Michelle Obama announced that she would leading a week of action in September to encourage voter registration.

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NEW YORK, NEW YORK – OCTOBER 17: Former Donald Trump presidential campaign manager Paul Manafort looks on during Game Four of the American League Championship Series at Yankee Stadium on October 17, 2017 in the Bronx borough of New York City. (Photo by Elsa/Getty Images)

The exhibit and witness lists special counsel Robert Mueller released before the ongoing Paul Manafort trial in Virginia gave us a hint that there would be some accusation having to do with season tickets for the New York Yankees. U.S. District Judge T.S. Ellis even mentioned the reference to the Yankees at pretrial, seeming to think he was confusing Manafort’s trial with another case. The prosecutors confirmed for him that there was indeed a Yankees tie to Manafort.

We already knew, via a search warrant for Manafort’s home that was unsealed earlier this summer, that investigators indicated that Manafort had allegedly claimed, while applying for a loan, that a $300,000 delinquency on his credit card was a loan to a friend for Yankees tickets that the friend paid back.

On Friday, as prosecutors questioned Manafort’s tax preparers, the Yankees tickets came up in a different context, without mention of the credit card debt. There were, however, suggestions that it was connected. As Uzo Asonye questioned Cindy LaPorta, a KWC accountant granted immunity, he went over an email Rick Gates sent her and another accountant in 2016 responding to their questions about Manafort’s consulting firm’s taxes.

Gates’ responses, which were displayed for the courtroom, indicated that the firm, Davis Manafort International, was reporting 4 seats at Yankees games, as well as tickets for other sports teams. LaPorta, asked during trial about the query about the sports team, explained that “80/20” referred to the practice of deducting 80 percent of the firm money spent on the ticket as a business expense and considering the other 20 percent a personal expense. She was asked what it would mean if someone else, other than the firm, had paid for the tickets. She said that if Davis Manafort International didn’t pay for them, then they’re not deductible.

The prosecutor didn’t go any farther than that, but I would guess we will be hearing about these tickets again as we delve deeper into Manafort and Gates’ conduct when Manafort was applying for the allegedly fraudulent loans.

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Cindy LaPorta, a tax preparer and one of the witnesses granted immunity by the judge in Paul Manafort’s Virginia trial, testified Friday that she had concerns about representations made to her about details filed on a tax return for Manfort’s business.

She said she did not believe that a transaction classified as a loan was actually a loan as was represented to her but she filed the tax return reporting it as such anyway.

“I very much regret it,” she testified.

Manafort is facing charges of tax fraud and bank fraud. He has pleaded not guilty.

The government alleges that among his tactics was the use of “sham” loans that decreased his taxable income.

LaPorta, an accountant for Manafort’s tax preparation firm KWC, was questioned by prosecutor Uzo Asonye. He entered into the evidence the grant of the immunity from the judge, and she testified that had she not had immunity she might be prosecuted.

She went on to testify about discussions that she, another KWC employee Conor O’Brien, and Manafort’s longtime business deputy Rick Gates had about a tax return they were filing for Manafort’s international consulting business in 2015. Gates hashed a plea deal with special counsel Robert Mueller earlier this year, and will be called to testify later in the ongoing Manafort trial, the prosecutors have said.

On a conference call the KWC accountants had with Gates about preparing the 2014 return, they provided him with an estimate of the taxes that would be due for the business.

“Rick said it was too high, he didn’t have the money,” LaPorta said, going on to clarify that the “he” Gates was referring to was Manafort.

Asonye questioned LaPorta about a ledger, assembled by Manafort’s bookkeeper for his business, showing that his business had earned $5 million from an entity called Telmar. LaPorta testified that she believed Telmar to be a client of Manafort’s consulting business.

LaPorta said that on the conference call the KWC accountants and Gates discussed a proposal to change the amount of a loan reported from Telmar. Reporting more of the income as a loan would reduce Manafort’s taxable income, she testified, and therefore reduce the taxes he owed.

They ultimately changed the amount of the loan to $900,000 which LaPorta said resulted in an amount of taxes due that could be paid by Manafort. LaPorta testified that by shrinking Manafort’s income, the taxes due were reduced by $400,000 or $500,000. Asonye also entered into evidence emails between Gates and O’Conor discussing changing the loan agreement connected to the loan.

LaPorta said that the conduct was not “appropriate” because “we can’t pick and choose what is a loan and what is income.” She said she thought it was wrong and could have made her firm vulnerable to litigation.

The following year an additional $1 million in income from Telmar was represented on the 2015 general ledger as a loan. Gates confirmed in an email exhibited during her testimony that the $1 million should be classified as a loan and not as income.

Gates, in another email displayed by prosecutors, promised her underlying docs related to the $1.9 million in loans — which he said were three separate loans — but LaPorta testified that she never saw them.

Prosecutors also exhibited emails showing Manafort had been forward emails between Gates and the accountants discussing the Telmar loan.

 

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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.

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If there was anything prosecutors at Paul Manafort’s trial were trying to impress on the jury Wednesday, it’s that he liked to spend money wired from his foreign bank accounts on fancy things — items that could not conceivably be considered business expenses and thus tax deductible.

Things like a $21,000 Limited Edition black titanium Royal Way watch with crystal, a Mercedes Benz for his wife, and a $15,000 jacket made of ostrich. Judge T.S. Ellis was not a fan of the prosecution’s focus on Manafort’s lavish lifestyle, and would often cut off questioning if it delved too into the details of the luxury items Manafort was purchasing, allegedly with income he failed to disclose on federal tax forms and money he wired from foreign bank counts that he didn’t report to the U.S. government.

Manafort has pleaded not guilty to the charges.

Luckily, photos of Manafort’s high-end apparel, taken during a FBI raid of his home last summer, were made public by Special Counsel Robert Mueller Wednesday. Here are a few highlights.

At House of Bijan — pronounced “BEE-shyan,” not “bi-JAWN” — Manafort spent some $334,000 between 2010 and 2012. Some of those suits and jackets are seen below:

House of Bijan only sells House of Bijan clothing, and House of Bijan clothing can only be bought at House of Bijan, its one-time CFO Ronald Wall, who currently still manages its finances, testified Wednesday. The label is sown into all of its suits.

Manafort was billed $8,000 for one “grey tweed fine sport jacket,” 12,000 for a pinstripe suit and $14,00 for a “navy blue 3/4 quilted silk jacket,” according to an invoice offered into evidence.

 

From the New York atelier Alan Couture, where Manafort spent more than $900,000 through the years 2010 through 2014:

 

An Alan Couture suit can go for about $5,000, according to invoices offered as evidence by Mueller, while the a cashmere and silk jacket cost Manafort $5,000.

To testify that the labels seen on the suit were the logo the clothing store, the prosecutors called to the stand Maximillian Katzman, son of the eponymous Alan.

This trove includes what appears to be the $15,000 jacket made of ostrich that was referenced by the prosecution in opening statements Tuesday.

See all of the Alan Couture and House of Bijan photos, as well as the rest of the exhibits posted by the special counsel on Wednesday, here.

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“What is a backsplash?”

“What is a pergola?”

Any fan of “Fixer Upper,” “House Hunters,” or “Love It Or List It” knows the answers to these questions. But in case the jurors at Paul Manafort’s ongoing trial weren’t avid consumers of HGTV, or contractors themselves, the prosecutors asked witnesses these and other queries about the intricacies of Manafort-funded home improvement projects, which special counsel Robert Mueller alleges was paid for by foreign wire transfers of income Manafort earned in Ukraine but failed to report on his taxes.

Manafort has pleaded not guilty to the charges, and to the additional counts concerning bank fraud.

Day 2 of the government’s case against Manafort focused on his vendors. My colleague Caitlin told you all about the luxury items discussed in testimony. But into the afternoon we moved into the topics of real estate, landscaping and house renovations.

U.S. District Judge T.S. Ellis was repeatedly annoyed with the amount of detail prosecutors were asking the witnesses to go into about their Manafort-hired projects. The prosecutors contended that they needed to establish that this was personal spending and not business expenditures that could have been deducted from Manafort’s taxes.

First up was Wayne Holland, a realtor who lived in Manafort’s neighbohood, and who had helped Manafort purchase for his daughter Andrea a $1.9 million home in Arlington, Virginia. When Holland emailed Manafort about the property — after multiple tours with the Manafort family — Paul Manafort told him to “go for it” and that “we would offer the full price.”

Next was Stephen Jacobson, a longtime general contractor for Manafort whose company, Steve’s Painting and Carpentry, was based in the Hamptons. He wore a blue polo and jeans, and spoke with a gravely voice.

He primarily managed improvements to Manafort’s home in Bridgehampton, but would do work on other properties owned by the Manafort family.

“Paul’s a tough negotiator,” Jacobson recalled, “tough but fair.”

Among the Manafort projects Jacobson worked on was a 2010 reno-job at his Hamptons house that required knocking down and reframing its walls in order to extend the dining room, and update and renovate the kitchen. The price for that renovation was $123,765, he said. Between 2010-2014, Manafort was billed for more than $3 million in projects by Jacobson, according to his testimony.

Prosecutor Greg Andres was cut off by the judge when he attempted to ask Jacobson about a pool house.

Finally we had Doug DeLuca, a landscape designer extraordinaire based here in Virginia. He was hired by Manafort to redo the yard at the house he bought his daughter. DeLuca appeared a little nervous when he first took the stand. But when it came time for him to describe his work, he seemed eager to pitch his genius to any potential local clientele in the courtroom.

“The outdoor garden concept” he said, required the demo-ing of the existing “concrete” — a word he said almost with disgust. He installed for her an outdoor kitchen using “soap stone countertops,” with a grill and other appliances. For her “outdoor living room,” he gave her an American cedar pergola, which was modeled off of the pergola in Central Park. His “art approach” incorporated “natural growth twigs,” wisteria, and other plants to create a complete “green roof” that creates “shade” and “protection.”

DeLuca sounded like he had more to tell us about this landscaping masterpiece when the judge interjected to bark at the prosecutors, inquiring “what is the virtue” of describing this in such “exquisite detail?”

“You’re done, period,” Ellis said. “Let’s move on.”

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Remember the widely publicized surprise raid of Paul Manafort home last summer?

It became public a full two weeks after FBI agents executed it and was the most dramatic indication, at the time, of the increasing heat on Trump’s former campaign chairman. It was reported incorrectly to be a no-knock search, giving rise to criticisms from Manafort’s allies that special counsel Robert Mueller was being too aggressive in his investigation into Manafort.

Well, on Wednesday, at Manafort’s trial in Virginia, we finally heard from one of the FBI agents who helped execute the search. Matthew Mikuska — who was the search’s so-called “seizing agent,” meaning he was in charge of determining what was seized and how it was stored — took the stand. He was used by the prosecutors mainly to enter into evidence documents found in the raid, including loan papers, work materials relating to Manafort’s consulting in Ukraine, and invoices for the fancy goods he bought allegedly using untaxed income.

However, Mikuska also clarified some of the details of the raid, including denying once and for all that it was a no-knock search.

<<enter caption here>> on August 10, 2017 in Alexandria, Virginia.
The building where former Trump campaign manager Paul Manafort has a residence is shown August 10, 2017 in Alexandria, Virginia. Manafort’s residence was searched for evidence as part of the Russia investigation being conducted by special investigator Robert Mueller. (Photo by Win McNamee/Getty Images)

According to Mikuska, the agents entered Manafort’s Alexandria, Virginia condo through the garage, and took an elevator from there to the lobby, and another from the lobby to the fourth floor to Manafort’s unit at about 6 a.m.

The FBI employees knocked three times total, waiting 30 seconds between each knock, while the knocking agent announced that they were the FBI, according to Mikuska’s testimony.

They finally entered with key provided for them; Mikuska said he was not aware of where the key came from (a fob to the garage was provided to them, as well).

Mikuska said an agent announced again that they were the FBI there to execute a search warrant. He saw Manafort walking out of a door to his left.

Mikuska described the condo as “luxury” and said it had three bedrooms, an office, tons of closet space, and an open-plan kitchen-dining area-living room. Among those executing the search, Mikuska said, were members of the FBI’s ERT (Evidence Response Team) to take pictures, and from the FBI’s CART (Computer Analysis Response) team for the seizure of digital materials.

During his cross-examination, Manafort attorney Richard Westling questioned Mikuska on what the FBI employees were wearing (jeans or khakis with FBI jackets), whether they were armed (yes) and did they have bullet proof vests (“objection”).

Westling also asked Mikuska if the search was “covert,” a term the FBI agent said was very specific and did not apply to this situation.

The search was “designed to be quiet and non-interruptive,” Mikuska said.

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U.S. District Judge T.S. Ellis made a stink Wednesday, at the Paul Manafort trial in Virginia, about the prosecution’s efforts to introduce as evidence photos of the former Trump campaign chairman’s home renovation projects, his suits and his antique rugs.

“Mr. Manafort is not on trial for having a lavish lifestyle,” Ellis chastised Uzo Asonye, a prosecutor based in Virginia who is assisting special counsel Robert Mueller’s team.

The exhibit list the prosecutors filed ahead of the trial, which started Tuesday, referenced photos of a watch, couture clothing and home projects that included a putting green.

The thousands of dollars of allegedly untaxed income Manafort made consulting in Ukraine then spent on high-end apparel, expensive homes and fancy cars figured prominently in the government’s opening statement, where Asonye mentioned that Manafort also allegedly owned a $15,000 jacket made of ostrich.

Manafort has pleaded not guilty to the tax charges, as well as to allegations of bank fraud.

On Wednesday, the prosecutors attempted to introduce some of that evidence — namely, a proposal, with photos and graphics, to renovate the electrical wiring at Manafort’s Hamptons home. It came as prosecutors questioned Matt Mikuska, an FBI agent who helped execute a search warrant on Manafort’s condo in Virginia last summer. That brought an objection from Richard Westling, an attorney for Manafort. Ellis, after sending the jury and the witness out of the room for a recess, accused the prosecutors of “gilding the lily” in their effort to display the photos.

Ellis questioned Asonye on what the relevance of Manafort’s spending habits were to the allegations that he failed to disclose on his tax forms his full income or that he maintained foreign bank accounts. Ellis took issue particularly with the fact that the prosecutor was using the FBI agent’s testimony to try to admit the photos, when the vendors who allegedly received wire transfers from Manafort’s bank accounts would later be on the stand to authenticate the invoices and confirm that they were paid.

“Enough is enough,” Ellis scolded Asonye, adding that the home renovation photo “doesn’t advance the ball.”

The judge brought up not just the renovation proposal, but potential exhibits of apparel Manafort allegedly bought using his unreported income, including an exhibit of a watch from a Beverly Hills store called House of Bijan.

“Is it Bi-JAWN?,” Ellis asked.

Asonyre corrected him that it was pronounced “bee-shyan,” letting the soft j roll off his tongue.

“If it doesn’t say Men’s Warehouse, then I don’t know it,” Ellis said.

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ALEXANDRIA, VA — The federal judge overseeing the trial of former Trump campaign chairman Paul Manafort doesn’t want the word “oligarch” – which was invoked by both sides on Tuesday – to be used in front of the jury

In a back and forth between U.S. District Judge T.S. Ellis and prosecutors at the start of Wednesday’s proceedings, the prosecutors argued that witnesses should be allowed to use the term in testimony.

Ellis ordered the government to file briefs to defend the use of the term, which he said was “pejorative.”

“We’re not going to have this case tried that he associated with despicable people,” Ellis said, referring to Manafort.

“That’s not the American way,” Ellis added.

Federal prosecutor Greg Andres argued that “oligarch” was the word Manafort’s associates used to refer to the moguls who were financing their consulting work in Ukraine.

Manafort is being tried on multiple counts of bank and tax fraud arising out of his consulting work for pro-Russia political forces in Ukraine. He has pleaded not guilty. The case against Manafort is the first to come to trial in special counsel Robert Mueller’s sweeping probe of Russian meddling in the 2016 election.

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