Jury seated in Paul Manafort trial

The trial of former Trump campaign chairman Paul Manafort began with jury selection, sending special counsel Robert Mueller's investigation into a new phase with its first case before a jury.

Posted: Aug 3, 2018 12:06 PM
Updated: Aug 3, 2018 12:35 PM

Paul Manafort's tax preparer told jurors Friday that the former Trump campaign chairman did not disclose his financial stake in foreign companies and repeatedly told his account he did not have bank accounts in foreign countries.

The testimony from Phil Ayliff also detailed his extensive dealings with Manafort's longtime deputy, Rick Gates, who is poised to be a key witness in the trial. Gates could testify as early as Friday afternoon.

Gates pleaded guilty and agreed to cooperate with special counsel Robert Mueller's team in February after he was charged alongside Manafort last year.

Manafort's legal team has indicated it plans to use Gates as a key part of its defense, seeking to blame Gates for Manafort's alleged crimes.

The discussion of Manafort's taxes and finances cuts to the heart of the prosecution's case against Manafort, who is charged with 18 counts of tax and banking crimes. He has pleaded not guilty to all charges.

The case is the first that Mueller's team has taken to trial as part of its broad investigation of Russian election interference in 2016, and the trial is occurring while the special counsel negotiates with President Donald Trump's legal team about Trump being interviewed.

Not disclosing foreign accounts

Ayliff said his tax preparation firm received several emails from Manafort and Gates that assured the accountants they had no foreign accounts. Ayliff's firm asked Manafort directly in an email in 2011 if he, his wife or two daughters had foreign accounts.

Manafort said no, according to the email shown to the jury.

Again in 2012, Gates told the accounting firm "we do not need to file for Paul" documents that showed his interest in Cypriot accounts to the US government. In 2013, the accountants asked about Manafort's foreign accounts a third time.

The accountants reminded Gates in an email that Manafort would need to disclose to the US Treasury Department any foreign accounts he controlled. "As discussed, to my knowledge, nothing has changed," Gates wrote back.

Prosecutors have implied that Manafort and Gates used a separate set of accountants in Cyprus and filed tax returns in the country, unbeknownst to their US-based financial specialists. Manafort or Gates "never told you they filed tax returns in Cyprus" or had accountants on the Mediterranean Island, prosecutor Uzo Asonye asked Ayliff in court.

"No," Ayliff responded.

The tax preparer was asked about several companies identified on a client list provided by Manafort. Ayliff identified nine of them, including Lucicle Consultants Ltd and Global Highway Ltd, as clients.

Prosecutors have alleged in the indictment that some of the same companies were actually controlled by Manafort and were used to pay vendors for home renovation, expensive suits and luxury cars.

Ayliff said he had no knowledge that Manafort or Gates had any financial interest in those companies. He added that he had no understanding of the relationship with the companies beyond them being identified by Manafort and Gates as clients.

Asonye asked why he would want to know if there was any financial interest by Manafort. Ayliff said if there was a financial interest, then Manafort would have had to identify them as foreign bank accounts.

Paying himself a salary

Ayliff also told the jury that in 2012, Manafort was improperly paying himself a salary through the consulting company he and his wife fully owned.

Manafort reported on his 2012 tax return a total income of $5.36 million. At the time, he and his wife each owned 50% of the Ukraine-focused political consulting firm DMP International.

He also reported earning wages of $1.99 million -- the amount a bookkeeper testified to as well Thursday.

Partners with ownership of businesses like DMP International shouldn't pay out wages, Ayliff testified. "When we found out he had been paid through the payroll company, we stopped the practice going forward," but still reported the amount on Manafort's 2012 tax return, Ayliff said.

That year was the same time DMP International received a $1.5 million loan from his alleged shell company Peronova Holdings Limited, which was forgiven and counted as income years later.

It was the first year DMP International existed, after a previous consulting firm that Manafort solely owned was liquidated.

Mississippi Coronavirus Cases

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Reported Deaths: 5668
CountyCasesDeaths
DeSoto17436187
Hinds16524328
Harrison13876199
Rankin11000217
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Lee8981141
Madison8413168
Jones6552112
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Alcorn268854
Pike266580
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Wayne206432
Winston205267
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Newton195745
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Jasper176038
Holmes169868
Clay162735
Tallahatchie154935
Stone148424
Clarke143562
Calhoun138021
Smith125825
Yalobusha120234
Walthall113437
Greene112129
Noxubee111425
Montgomery110936
Carroll105922
Lawrence104317
Perry103231
Amite99926
Webster94324
Tunica87621
Jefferson Davis87327
Claiborne86825
Benton84023
Humphreys83624
Kemper79120
Quitman7029
Franklin68716
Choctaw62313
Wilkinson58825
Jefferson55920
Sharkey44217
Issaquena1606
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Alabama Coronavirus Cases

Cases: 432536

Reported Deaths: 6379
CountyCasesDeaths
Jefferson63523957
Mobile30967562
Madison27627201
Tuscaloosa21122268
Montgomery19495326
Shelby18941126
Baldwin16798188
Lee12901102
Morgan12447129
Etowah11911178
Calhoun11365205
Marshall10322119
Houston8813156
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Cullman8159106
Elmore8056104
DeKalb7796102
Lauderdale773399
St. Clair7705122
Talladega6347109
Walker5993174
Jackson590341
Colbert543274
Blount541186
Autauga527061
Coffee454160
Dale405482
Franklin371948
Russell345712
Chilton340972
Covington334168
Escambia328344
Dallas310196
Chambers297370
Clarke290536
Tallapoosa2665107
Pike258830
Marion250155
Lawrence249150
Winston231442
Bibb219848
Geneva206946
Marengo205229
Pickens198631
Hale180842
Barbour177836
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Butler171358
Cherokee162530
Henry157523
Monroe150718
Randolph143236
Washington139527
Clay128546
Crenshaw121644
Cleburne119724
Lamar119621
Macon119637
Lowndes112536
Wilcox105822
Bullock101428
Perry99118
Conecuh96320
Sumter89726
Greene76723
Coosa62215
Choctaw51624
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