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[rooster59]

Accountant of ex-Trump aide Manafort testifies she helped falsify documents

By Sarah N. Lynch, Nathan Layne and Karen Freifeld

 

Former Trump campaign manager Paul Manafort arrives for arraignment on a third superseding indictment against him by Special Counsel Robert Mueller on charges of witness tampering, at U.S. District Court in Washington, U.S. June 15, 2018. REUTERS/Jonathan Ernst/Files

 

ALEXANDRIA, Va. (Reuters) - An accountant for U.S. President Donald Trump's one-time campaign chairman Paul Manafort admitted in trial testimony on Friday that she helped backdate documents and falsify financial records at Manafort and his business partner's request to reduce his tax burden and help him qualify for loans.

 

Cynthia Laporta, who prepared Manafort's tax returns starting in 2014, told a jury in federal court in Alexandria, Virginia, that she was testifying under an immunity agreement with the government to avoid being prosecuted as Manafort was charged with bank fraud and tax fraud.

 

One member of the jury nodded in apparent agreement when U.S. District Judge T.S. Ellis cut off the prosecution's questioning to ask her if she was afraid of being prosecuted herself.

 

"Correct," answered Laporta, explaining that she went along with accounting manoeuvres suggested by Manafort and his longtime business associate Rick Gates because she did not want to create problems for her firm or lose a top client.

 

"I very much regret it," Laporta said on the trial's fourth day as prosecutors build their case that Manafort hid tens of millions of dollars he earned working for pro-Russian politicians in Ukraine to evade taxes.

 

Laporta, the 14th witness to testify for the prosecution, was the most damaging yet for Manafort in the first trial arising from Special Counsel Robert Mueller's probe of Russian meddling in the 2016 U.S. election.

 

Manafort has pleaded not guilty to 18 counts of bank and tax fraud and failing to disclose foreign bank accounts, charges that largely pre-date the five months Manafort worked for Trump, some of them as campaign chairman.

 

Once the jury had been dismissed for the day, Ellis gave defence lawyers a green light for detailed cross examination of Laporta on Monday. "You are not limited in your cross examination of her," Ellis said.

 

Both Laporta and fellow accountant Philip Ayliff, her predecessor who handled Manafort's tax filings at the firm KWC, testified that they had no knowledge that Manafort controlled foreign bank accounts. The government has provided trial evidence of Manafort controlling a web of overseas accounts in Cyprus and elsewhere. Such accounts must be reported to tax authorities if they contain $10,000 or more.

 

Laporta also detailed multiple examples in which Manafort and Gates sought to doctor financial records. One instance involved classifying revenue from a Cyprus-based company as a loan to lower his taxable income, Laporta testified.

 

"It’s hard-hitting testimony that creates an uphill battle for the defence, but that’s what cross examination is for," said Andrew Boutros, a former federal prosecutor who is now a white collar defence lawyer. "I don’t know if there is enough to convict him right now, but they’re laying the groundwork for it."

 

A conviction would give momentum to Mueller's probe, in which 32 people and three companies have been indicted or pleaded guilty. Trump, angered by any questions about the legitimacy of his election win, has called Mueller's investigation a witch hunt and wants it to be shut down.

 

TARGETING GATES

 

After spending the first two days of the trial laying out Manafort's lavish spending, the prosecution is now digging into how he accounted for the more than $60 million he made in Ukraine and his efforts to allegedly mislead banks to get loans once the income from Ukraine dropped off precipitously in 2014.

 

Manafort's attorneys have signalled they will seek to blame Gates, who was Trump's deputy campaign chairman in 2016. Gates pleaded guilty in February and is expected to testify against Manafort, possibly next week.

 

Prosecutor Uzo Asonye focused some of his questioning on money transfers from a Cyprus-based company called Telmar Investments Ltd, which records showed had paid Manafort's firm more than $5 million for consulting work.

 

That income posed a problem for Manafort when it came time to prepare his business tax returns in September 2015, Laporta testified. She said Gates told her in a conference call the income level "was too high" and proposed reclassifying a portion of it as a loan.

 

Laporta said she knew it was "inappropriate" but agreed to alter the records to show that Manafort’s firm received a $900,000 loan from Telmar in 2014, a change that would save Manafort nearly a half million dollars in taxes, Laporta said.

 

Manafort signed an agreement to account for that loan that was backdated, according to Laporta and an exhibit shown to the jury.

 

Trial consultant Roy Futterman, who is following the trial but not involved in it, said, "The prosecution is doing a very good job of keeping a brisk pace, putting witnesses on for short direct examinations, keeping it lively and keeping very tight messages for each witness."

 

Manafort's attorneys do not seem to have scored a lot of points on cross-examination, Futterman said, but added that the witnesses who have testified so far are not "the main targets."

 

Earlier on Friday prosecutors asked Ayliff about Manafort's accounting of a $1.5 million transfer in 2012 from Peranova Holdings Ltd as a loan, even as records showed that no interest or principal was paid on it in subsequent years. Peranova is one of numerous Cypriot entities that prosecutors have said Manafort controlled.

 

Ayliff testified that KWC did not know Manafort controlled Peranova, and that if the transfer was a payment related to his consulting work in Ukraine it would have been treated as income - not as a loan - on his tax returns.

 

 

-- © Copyright Reuters 2018-08-04

[Briggsy]

Sadly it will only take a couple of Trump fans on the jury for Manafort to be found not guilty. Clearly the evidence against him is very strong. Jury trials can throw up some real miscarriages of justice. The defence will have done all it can to get as many Fox News fans as it can on the jury.

[DoctorG]

Schemes like these only work if crooked accountants and lawyers enable them. Although they will not be prosecuted, I hope they are struck off and unable to practice again.

[mtls2005]

1 hour ago, DoctorG said:

Schemes like these only work if crooked accountants and lawyers enable them. Although they will not be prosecuted, I hope they are struck off and unable to practice again.

 

Correct. All criminal enterprises work this way, amazingly enough; everyone involved is crooked, top to bottom. But getting lower echelon criminals to rat out those higher up, for immunity or light sentences, is a classic technique to break organized crime, used since 1970, in the U.S.

 

I would expect that Ms. LaPorta will be shown the door from her state's CPA, as part of her deal.

 

The defense can argue that Mr. Manafort was ignorant of the law(s), or that he was unaware that he was complicit in a criminal enterprise, or they can blame someone else, or claim the government shouldn't be trying fine, upstanding, white, male criminals.

 

 

 

 

[oldrunner]

If I were the head of the Defense Team, our first question of the Jurors would be  "Are you an avid fan of FOX News?" and if the answers anything other than "YES", disqualify the juror, NEXT Please.

[Nyezhov]

1 minute ago, oldrunner said:

If I were the head of the Defense Team, our first question of the Jurors would be  "Are you an avid fan of FOX News?" and if the answers anything other than "YES", disqualify the juror, NEXT Please.

Actually, your reader of Fox News would be a good defense juror.

 

This would be a tricky Voir dire. I don't know the socioeconomic background of the pool, but I would be looking at keeping older white guys who are educated and remember things like Government abuses,as well as older black guys who have had contact with the justice system.

[Chomper Higgot]

33 minutes ago, Nyezhov said:

Actually, your reader of Fox News would be a good defense juror.

 

This would be a tricky Voir dire. I don't know the socioeconomic background of the pool, but I would be looking at keeping older white guys who are educated and remember things like Government abuses,as well as older black guys who have had contact with the justice system.

You’d better hurry up, the trial is going to be done and dusted within the next couple of weeks.

[Tug]

Ah another swamp critter caught hurry throw Russian money on his back before he drys out lol

[ChouDoufu]

9 hours ago, rooster59 said:

She said Gates told her in a conference call the income level "was too high" and proposed reclassifying a portion of it as a loan.

 

Laporta said she knew it was "inappropriate" but agreed to alter the records to show that Manafort’s firm received a $900,000 loan

so can manny blame this one on gates who requested the reclassification?

 

or can he possibly get off because he didn't understand all those crazy irs regulations?  he did pay the accounting firm (i think it was) $400,000 for providing expert, professional accounting services. 

 

gosh, for that amount of cash, the experts with the state cpa credentials shouldn't know something is "inappropriate" and do it anyway....it's their responsibility to decline anything they suspect is illegal.

[Trouble]

Not that I approve of what Manafort and Gates did, but I wonder how many of us haven't inflated a charitable contribution or not reported cash income to avoid some tax burden.  I know plenty of people not declaring cash income. Seems it's all a matter of degree.  Honestly, he and Gates were pretty damn sloppy in their dealings.  Should have converted it to cash and put it away in a very safe safety deposit box in Switzerland.  Of course had he not gotten involved with the Trump campaign, it's likely he might have gotten away with tax fraud.