US president Donald Trump's former campaign chairman Paul Manafort has been found guilty on tax fraud charges in Virginia federal court, in a partial victory for special counsel Robert Mueller and his team in the first trial arising from their investigation.
Manafort (69) avoided conviction on some charges, with the jury saying it could not reach a consensus on 10 out of 18 total counts. He was convicted on five counts of tax fraud, two counts of bank fraud and one count of failure to report a foreign bank account, together carrying a maximum sentence of decades in prison.
Manafort faces additional charges in a separate case, to convene in Washington DC in September.
He had been charged with bank fraud, tax fraud, failure to report foreign bank accounts and conspiracy. Some of the fraud activity overlapped with his time atop the Trump campaign. The jury returned the verdict on its fourth day of deliberation.
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Mr Trump, arriving in West Virginia for a rally on Tuesday night, tried to distance himself from Manafort’s conviction, saying it did not involve him.
“Paul Manafort is a good man. ... It doesn’t involve me, but I still feel - you know, it’s a very sad thing that happened,” Mr Trump said. “This has nothing to do with Russian collusion. This started as Russian collusion; this has absolutely nothing to do - this is a witch hunt and it’s a disgrace.”
The president regularly calls the Mueller investigation a “witch hunt”.
The Virginia trial did not delve into the nature of Trump campaign contacts with Russia, which is the focus of the Mueller investigation. But the conviction of a figure as prominent as Manafort, who ran the Trump campaign for a crucial five-month period in 2016, was a blow to the White House and a boost for the special counsel, which continues to investigate the Trump campaign.
The White House did not immediately comment on the verdict. Mr Trump earlier suggested that Manafort was being “treated worse” than legendary gangster Al Capone while seeking to downplay Manafort’s role in his campaign.
Manafort’s conviction brought the tally of former Trump advisers who have pleaded to or been found guilty of crimes in the Mueller investigation to four. Mr Mueller also has secured guilty pleas from a California man and a London-based lawyer, and his team has indicted 26 Russian nationals and three Russian companies.
Prosecutors presented evidence that Manafort had lied to banks in seeking personal loans and lied to the Internal Revenue Service in reporting income related to his political consulting work in Ukraine and elsewhere.
Defence argument
The defence argued that the prosecution had failed to prove that the banks acted on false information allegedly submitted by Manafort and attacked the credibility of former Manafort protege Rick Gates, the government's key witness.
Mr Gates testified that Manafort had asked him to help falsify banking and tax records and knowingly submitted those records. Manafort conducted various frauds, prosecutors charged, to fund lavish lifestyle items from coastal real estate to bespoke suits to a $15,000 (€12,961) ostrich jacket.
The prospect of finishing his days in prison represented an astounding downfall for Manafort, a valued adviser to Republican presidents going back to Gerald Ford and once a top Washington lobbyist and power broker.
Manafort’s career took a lucrative turn in 2005, when he opened an office in Kiev, Ukraine, and began earning millions as a political consultant for a Moscow-aligned political party. He also struck up a business partnership with Ukrainian oligarch Dmytro Firtash and with Oleg Deripaska, a Russian oligarch with close ties to Vladimir Putin.
Ten years later, however, with his Ukrainian clients in exile and his former partners after him for money, Manafort faced mounting personal debts, according to witness testimony. Under increasing pressure, the seasoned political consultant made a bold play, offering his services to the greenhorn Trump campaign – for free.
Prison time
Manafort could yet avoid prison time, if presiding Judge TS Ellis III determined that the evidence against Manafort had been insufficient, in spite of the jury verdict, in what would be an exercise of judicial power unique to federal criminal trials. Or Manafort could be pardoned by Mr Trump.
Judge Ellis suggested during the trial that he disagreed with aspects of the prosecution’s case. When prosecutors sought to include falsified documents Manafort submitted in a failed attempt to procure a loan, Judge Ellis suggested that they ought to focus on loans that went through.
During the trial, Judge Ellis repeatedly pushed the prosecution to speed up the presentation of its case; questioned the focus of the case; barred evidence such as pictures of luxury goods; and openly challenged the legal premise of the case.
Manafort spoke once during the trial, when asked by the judge whether he wished to testify in his own defense. “No, sir,” he said.
While the trial did not focus on influence peddling within the Trump campaign, emails presented by the prosecution showed that Manafort remained influential in the campaign until after the election – months after it emerged that he was under investigation by the FBI.
In one email, Manafort wrote Trump son-in-law Jared Kushner to recommend Federal Savings Bank CEO Stephen Calk for the position of secretary of the Army. Witnesses at the trial said Calk had personally expedited $9.5m and $6.5m loans for Manafort.
“On it!” Mr Kushner replied. Mr Calk was not nominated for a Trump administration role.
In September in Washington, DC, Manafort is scheduled to go to trial on charges of conspiracy to launder tens of millions of dollars in overseas earnings, failing to register as a foreign agent and making false statements. He has a wife of 40 years and two adult children.–Guardian