LOS ANGELES (CN) – Former Trump campaign chair Paul Manafort and his daughter’s ex-husband schemed and “swindled” to defraud the Banc of California by claiming to own several high-end Los Angeles properties and inflating their worth to secure a $1 million loan, according to a lawsuit filed Tuesday.
Manafort faces over 20 years in prison after being convicted for tax and bank fraud in the state of Virginia, and has also pleaded guilty to a slew of federal charges, including conspiracy against the United States and conspiracy to obstruct justice, in a separate case. He forfeited more than $22 million in cash and property to the federal government and promised to cooperate with Special Counsel Robert Mueller.
But a federal judge found Manafort, 69, had violated the plea deal and a recent sentencing memo from Mueller described Manafort, 69, as an unrepentant serial liar who “presents a grave risk of recidivism.”
Now the Banc of California claims Manafort and his former son-in-law Jefferey Yohai defaulted on a $1 million loan taken out in 2016, according to a 27-page complaint filed in Los Angeles Superior Court on Tuesday.
“Defendants’ business practices are unfair because they are immoral, unethical, oppressive, and unscrupulous and offend established public policy prohibiting the making of false representations or concealing material facts to induce a financial institution to loan money,” the bank says in its complaint.
Manafort and Yohai lied on their credit applications and gave the bank false personal financial statements, according to the complaint that includes claims of fraud, negligent misrepresentation, breach of contracts and others.
Manfort and Yohai said they needed the money for “real estate and construction ventures” in Los Angeles and claimed to own through their investment company Baylor Holding several high-end properties that were successful, according to the complaint. Baylor is also a defendant in the lawsuit
Additionally, Manafort told the bank he had a net income of $4 million, and both men promised the loan would be the start of a “highly profitable” relationship between them and the bank, the complaint says.
Both Yohai and Manafort filled out personal financial statements that were false, says Banc of California. Yohai said he owned 50 percent of six properties in Los Angeles including multimillion-dollar homes and a vacant lot.
Yohai estimated those properties would return cash flows over $102 million, but the bank estimates the actual return is closer to $56 million, 30 percent less. Manafort meanwhile listed several properties in New York and Los Angeles, but according to the bank “Manafort falsely claimed his net worth at the time exceeds $74 million.”
The bank’s complaint includes the Manafort indictment in the Eastern District of Virginia, which includes allegations Manafort and former political consultant Rick Gates funneled illicit money through an offshore account to purchase and improve real estate in the United States.
The bank says that when Manafort was running low on funds in 2014 and 2015 he lied to lenders about his income and debt to con them into loaning him millions of dollars.
Yohai divorced Jessica Manafort in August 2017 and was previously charged by federal prosecutors in Los Angeles with conspiracy to commit bank and aggravated identity theft after he defaulted on $15 million in real estate loan. In February 2018, he pleaded guilty to misusing construction loan funds.
Manafort and Yohai guaranteed the loan which is now in default. As of Feb. 26, 2019, they owe $702,313.44 plus interest, late charges, attorneys’ fees and other charges, the bank says.
The bank is represented by Robert McWhorter and Jarrett Osborne-Revis of Buchalter in Sacramento, California.
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