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 1:16 PM
Updated: Aug 3, 2018 1:35 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.

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Confirmed Cases: 32078

Reported Deaths: 2004
CountyConfirmedDeaths
Marion9268539
Lake3320168
Cass15826
Allen130966
St. Joseph120534
Hendricks113067
Hamilton111592
Johnson1086104
Elkhart105728
Madison58258
Porter49021
Bartholomew48133
Clark46138
LaPorte41522
Tippecanoe3753
Jackson3671
Howard36519
Delaware35735
Hancock32127
Shelby31521
Floyd31438
Boone28835
Morgan26224
Vanderburgh2482
Montgomery23117
White2268
Decatur22431
Clinton2221
Grant19121
Noble18921
Harrison18721
Dubois1852
Greene16724
Warrick16426
Dearborn16421
Henry1619
Monroe16011
Vigo1477
Lawrence14423
Miami1391
Putnam1337
Jennings1274
Orange12422
Scott1183
Ripley1126
Franklin1068
Kosciusko941
Carroll922
Daviess8216
Steuben802
Marshall761
Newton7410
Wabash722
Wayne715
Fayette684
LaGrange602
Jasper581
Washington521
Fulton471
Rush452
Jay440
Randolph433
Jefferson411
Whitley402
Pulaski390
Clay391
Owen341
Brown331
Sullivan321
Starke313
DeKalb311
Perry260
Huntington262
Knox250
Tipton251
Benton250
Wells240
Crawford230
Blackford211
Switzerland190
Fountain182
Spencer171
Posey170
Parke170
Gibson142
Ohio130
Warren121
Adams121
Vermillion90
Martin90
Union80
Pike60
Unassigned0154

Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Confirmed Cases: 113195

Reported Deaths: 4923
CountyConfirmedDeaths
Cook738193354
Lake7767250
DuPage7290340
Kane5866153
Will5238258
Winnebago199351
McHenry145268
St. Clair101773
Kankakee80242
Kendall72719
Rock Island63922
Champaign5697
Madison54056
Boone40716
Sangamon33226
DeKalb3313
Randolph2593
Jackson22810
McLean21210
Stephenson1952
Ogle1922
Macon18819
Peoria1858
Clinton17816
Out of IL1771
Union1417
LaSalle14013
Whiteside13310
Iroquois1314
Unassigned1200
Coles1159
Warren1140
Jefferson10116
Knox950
Monroe9211
Grundy892
McDonough835
Lee761
Tazewell683
Cass670
Henry670
Williamson541
Marion500
Jasper457
Adams441
Macoupin421
Perry410
Pulaski400
Montgomery391
Vermilion391
Morgan341
Christian334
Livingston312
Douglas280
Jo Daviess270
Fayette203
Ford201
Jersey201
Washington180
Woodford182
Mason170
Menard170
Shelby161
Bureau151
Hancock150
Mercer150
Carroll132
Franklin120
Piatt120
Crawford110
Fulton110
Bond101
Brown100
Clark100
Cumberland100
Logan100
Moultrie100
Schuyler100
Wayne91
Alexander80
Henderson80
Johnson70
Massac70
Saline70
Effingham61
Greene50
Marshall50
De Witt40
Lawrence40
Richland30
Stark30
Clay20
Edwards20
Gallatin20
Hamilton20
Wabash20
White20
Calhoun10
Hardin10
Pike10
Pope10
Putnam10
Edgar00
Terre Haute
Scattered Clouds
70° wxIcon
Hi: 87° Lo: 68°
Feels Like: 70°
Robinson
Clear
67° wxIcon
Hi: 86° Lo: 66°
Feels Like: 67°
Indianapolis
Broken Clouds
70° wxIcon
Hi: 87° Lo: 68°
Feels Like: 70°
Rockville
Clear
65° wxIcon
Hi: 85° Lo: 67°
Feels Like: 65°
Casey
Clear
67° wxIcon
Hi: 83° Lo: 66°
Feels Like: 67°
Brazil
Scattered Clouds
70° wxIcon
Hi: 85° Lo: 67°
Feels Like: 70°
Marshall
Scattered Clouds
70° wxIcon
Hi: 87° Lo: 67°
Feels Like: 70°
No Major Changes
WTHI Planner
WTHI Temps
WTHI Radar

WTHI Events