ALEXANDRIA, Va. (AP) Prosecutors headed toward the heart of their financial fraud case against former Trump campaign chairman Paul Manafort on Friday, with jurors hearing testimony that he never told his tax accountants about offshore bank accounts containing millions of dollars.
The testimony of longtime accountant Philip Ayliff builds on evidence presented by special counsel Robert Muellers team that Manafort inflated his business income by millions of dollars and kept his bookkeeper and tax preparers in the dark about the foreign bank accounts he was using to buy luxury items and pay personal expenses.
Ayliff told jurors that Manafort denied on multiple occasions that he controlled foreign bank accounts when asked by his tax preparers. Thats why the accounts werent reported on years worth of Manaforts tax returns as required by federal law, he said.
Ayliff also testified that he sometimes communicated with longtime Manafort deputy Rick Gates about the former Trump campaign chairmans personal and business tax returns. But he said Manafort authorized those discussions, and Gates and Manafort never contradicted each other.
That testimony is important to prosecutors as they look to rebut defense arguments that Manafort cant be responsible for financial fraud because he left the details of his spending to others. Those include Gates, who pleaded guilty earlier this year and is expected to testify soon as the governments star witness.
Manafort faces charges of bank fraud and tax evasion that could put him in prison for the rest of his life. Its the first courtroom test of Muellers team, which is tasked with looking into Russias efforts to interfere with the 2016 U.S. election and whether the Trump presidential campaign colluded with the Kremlin to sway voters.
In Fridays testimony, and throughout the trial thus far, neither Trump nor Russia have been discussed, as evidence has focused on Manaforts work as a consultant in the years before he joined Trumps campaign in the presidential year.
While the question of collusion remains unanswered, Manaforts financial fraud trial has exposed the secretive world of foreign lobbying that made him rich. It has also revealed how, when income from his Ukrainian political consulting work dried up, he struggled to pay his bills and, prosecutors say, began obtaining bank loans under false pretenses.
In one instance, Ayliff testified that Manafort pressed him to tell bankers considering a loan application that one of Manaforts New York properties was being used as a personal residence when in fact he was using it to rent out. Classifying the property as a personal residence would have made it easier to obtain the mortgage.
Ayliff responded to Manafort that we have always treated it as a rental. … Not sure where that leaves us.
That email exchange occurred around the time prosecutors say Manafort was using doctored documents to secure loans.
Bookkeeper Heather Washkuhn testified Thursday that a series of profit-and-loss statements Manafort submitted with his loan applications were fake including one that inflated the net income of his business by about $4 million.
Washkuhn also testified that Manafort never told her that millions in foreign wire transfers were coming from companies prosecutors say he controlled.
I would say he was very knowledgeable, Washkuhn told jurors. He was very detail-oriented. He approved every penny of everything we paid.
Other witnesses testifying this week said Manafort paid them millions from offshore accounts tied to foreign shell companies for landscaping, expensive clothing and even a karaoke machine.
