I didn't mean FARA violations - I meant FBAR violations
Chris GeidnerVerified account
@chrisgeidner
New time range in the ED VA indictment includes the period for which Manafort and Gates worked for the Trump campaign.
Elizabeth de la Vega
@Delavegalaw
Key point @chrisgeidner. What's also interesting, and critical, about this superseding indictment is that, altho' it alleges laundering of funds, there's NO $ laundering charge. This relieves prosecutors of the burden of proving the $ came from a Specified Unlawful Activity.
[These were the bits that jumped out at me but obv the whole thing is worth reading]
MANAFORT and GATES generated tens of millions of dollars in income as a result of their
Ukraine work. From approximately 2006 through the present, MANAFORT and GATES engaged
in a scheme to hide income from United States authorities, while enjoying the use of the money.
During the first part of the scheme between approximately 2006 and 2015, MANAFORT, with
GATES’ assistance, failed to pay taxes on this income by disguising it as alleged “loans” from
nominee offshore corporate entities and by making millions of dollars in unreported payments
from foreign accounts to bank accounts they controlled and United States vendors. MANAFORT
also used the offshore accounts to purchase United States real estate, and MANAFORT and
GATES used the undisclosed income to make improvements to and refinance their United States
properties.
In total, more than $75,000,000 flowed through the offshore accounts. MANAFORT, with
the assistance of GATES, laundered more than $30,000,000, income that he concealed from the
United States Department of the Treasury (Treasury), the Department of Justice, and others.
GATES obtained more than $3,000,000 from the offshore accounts, income that he too concealed
from the Treasury, the Department of Justice, and others.
[$75,000,000!!]
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MANAFORT and GATES also disguised, as purported “loans,” more than $10 million
transferred from Cypriot entities, including the overseas MANAFORT–GATES entities, to
domestic entities owned by MANAFORT. For example, a $1.5 million wire from Peranova to
DMI that MANAFORT used to purchase real estate on Howard Street in Manhattan, New York,
was recorded as a “loan” from Peranova to DMI, rather than as income. The following loans were
shams designed to reduce fraudulently MANAFORT’s reported taxable income.
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When they were flush with Ukraine funds, MANAFORT, with the assistance of GATES,
used their offshore accounts to purchase and improve real estate in the United States. When the
income from Ukraine dwindled in 2014 and 2015, MANAFORT, with the assistance of GATES,
obtained millions of dollars in mortgages on the United States properties, thereby allowing
MANAFORT to have the benefits of liquid income without paying taxes on it. MANAFORT and
GATES defrauded the lenders in various ways, including by lying about MANAFORT’s and
DMI’s income, lying about their debt, and lying about MANAFORT’s use of the property and the
loan proceeds. For example, MANAFORT and GATES submitted fabricated profit and loss
statements (P&Ls) that inflated income, and they caused others to provide doctored financial
documents.
In late 2015 through early 2016, MANAFORT applied for a mortgage on the Howard Street
condominium from Lender B for approximately $3.4 million. Because the bank would permit a
greater loan amount if the property were owner-occupied, MANAFORT falsely represented to the
lender and its agents that it was a secondary home used as such by his daughter and son-in-law
and was not held as a rental property. In an email on January 6, 2016, MANAFORT noted: “[i]n
order to have the maximum benefit, I am claiming Howard St. as a second home. Not an
investment property.” Later, on January 26, 2016, MANAFORT wrote to his son-in-law to advise
him that when the bank appraiser came to assess the condominium, his son-in-law should
“[r]emember, he believes that you and [MANAFORT’s daughter] are living there.”
MANAFORT, with GATES’ assistance, also made a series of false and fraudulent
representations to the bank in order to secure the millions of dollars in financing. For example,
MANAFORT falsely represented the amount of debt he had by failing to disclose on his loan
application the existence of the Lender A mortgage on his Union Street property. That liability
would have risked his qualifying for the loan. Through its own due diligence, Lender B found
evidence of the existing mortgage on the Union Street property. As a result, Lender B wrote to
MANAFORT and GATES that the “application has the following properties as being owned free
& clear . . . Union Street,” but “[b]ased on the insurance binders that we received last night, we
are showing that there are mortgages listed on these properties, can you please clarify[?]”
33. To cover up the falsity of the loan application, GATES, on MANAFORT’s behalf, caused
an insurance broker to provide Lender B false information, namely, an outdated insurance report
that did not list the Union Street loan. MANAFORT and GATES knew such a representation was
fraudulent. After GATES contacted the insurance broker and asked her to provide Lender B with
false information, he updated MANAFORT by email on February 24, 2016. MANAFORT replied
to GATES, on the same day: “good job on the insurance issues.”
Having failed to secure a falsified P&L from the bookkeeper, GATES falsified the P&L.
GATES wrote to MANAFORT and another conspirator, “I am editing Paul’s 2015 P&L
statement.” GATES then sent the altered P&L to Lender C, which claimed approximately $4.45
million in net income, whereas the true P&L had less than $400,000 in net income.
In March 2016, MANAFORT, with the assistance of GATES and others, applied for a $5.5
million loan from Lender B on the Union Street property. As part of the loan process,
MANAFORT submitted a false statement of assets and liabilities that hid his prior loan from
Lender A on the Union Street property, among other liabilities. In addition, another conspirator
on MANAFORT’s behalf submitted a falsified 2016 DMI P&L. The falsified 2016 DMI P&L
overstated DMI’s income by more than $2 million, which was the amount that Lender B told
MANAFORT he needed to qualify for the loan. When the document was first submitted to Lender
B, a conspirator working at Lender B replied: “Looks Dr’d. Can’t someone just do a clean excel
doc and pdf to me??” A subsequent version was submitted to the bank.
I wonder who the other conspirator is?