FBI Accountant Maps Paper Trail in Manafort Case

ALEXANDRIA, Va. (CN) – In a bid to unravel hours of elaborate testimony about Paul Manafort’s financial records Wednesday afternoon, defense attorneys zeroed in on one detail they painted as particularly curious – the former Trump campaign chair’s signature on various tax and loan forms.

In this courtroom drawing former Trump campaign chairman Paul Manafort, left, sits with his lawyer Kevin Downing as Manafort’s trial continues at federal court in Alexandria, Va., on Aug. 7, 2018. (Dana Verkouteren via AP)

After Manafort’s onetime assistant Rick Gates wrapped up his testimony Wednesday morning, the jury’s attention was turned back to the paper trail of financial documents supporting special counsel Robert Mueller’s case.

Defense attorney Richard Westling posed the question about Manafort’s signature to FBI forensic accountant Morgan Magionos following hours of her exhaustive testimony about his bank records.

Displaying a copy of a foreign bank account disclosure form for Davis Manafort Partners International and a loan application Manafort allegedly signed, Westling asked Magionos to carefully review Manafort’s signature.

“Did you verify that it was actually Paul Manafort’s signature on the account authorization forms?” Westling asked.

Magionos said she had not.

While the signatures looked similar to one another, flourishes on one differed slightly from the other, prompting Magionos to say Wednesday that “they look a little different.”

“But I’m also not a handwriting expert,” she added.

U.S. District Judge T.S. Ellis III, who has been strict with prosecutors over admissibility of evidence in the trial so far, did not interject when she made the comment. Westling asked her to review the possible differences in the signatures at least twice more.

“These [signatures] look substantially different, don’t they?” he asked.

Magionos agreed but said her verification of the financial records themselves was based on cross-referencing information provided to her by banks connected to Manafort’s alleged fraud.

Over the course of the day, the FBI forensic accountant detailed for prosecutor Greg Andres the various opening dates of offshore entities in Cyprus, St. Vincent and the Grenadines and the United Kingdom.

Overall, there were 31 accounts associated with Manafort which the analyst reviewed in the course of her investigation.

The information was obtained directly from the banks through the use of a mutual legal assistance treaty in most cases, and a subpoena in at least one instance.

The records under her review featured open account statements and underlying loan documents, many of which included a copy of Manafort’s passport and lists of authorized signatories he placed on the accounts.

According to Magionos, at the Bank of Cyprus, Manafort added both his then-assistant Gates and Konstantin Kilimnik as authorized signatories on accounts for Black Sea View Ltd., Lucicle Consulting Ltd., Yiakora Ventures Ltd. and others. Kypros Chrysostomides, or as he has become known at trial, “Dr. K,” was also listed as a signatory on the accounts.

Dr. K. was joined by “a group of individuals in Cyprus associated with his law firm,” the forensic accountant said. She did not list their names.

Magionos also told prosecutors Wednesday that in the course of her investigation, she traced a $1 million payment originating from a foreign account for clothier Alan Couture, Manafort’s high-end suitmaker.  In another instance, she told prosecutors she traced $748,000 in payments to vendors from foreign accounts.

Manafort also purchased three of his properties – two in New York City and one in Arlington, Virginia – with monies funneled offshore, she said.

The money started pouring out at a more dramatic clip between 2010 and 2012, she noted. In 2012 alone, the forensic accountant testified, $9.2 million had flowed from offshore to the U.S.

But by 2014, the money began drying up: only $429,000 came into the United States from offshore accounts that year, according to Magionos.

Jurors also heard from Michael Welch, a revenue agent for the IRS, who testified about a review he prepared of Manafort’s foreign accounts and the payments from them to other vendors.

Based on his analysis, Welch said Manafort underreported his income by roughly $16.4 million between 2010 and 2014.

Welch called his estimate “conservative,” saying he deducted several transfers from Manafort’s foreign accounts because he could not actually determine their origin or purpose. One of those mystery deductions included a $450,000 payment to a cosmetic dentist in Florida and a $49,000 payment to a vacation rental company in Italy.

Prosecutor Uzo Asonye asked Welch to explain whether he believed cosmetic dentistry could be a legal deductible for a business, but before Welch could answer, Judge Ellis cut in.

“The allegation in the indictment is that [Manafort] did not report his income. We’re not here to review what he did report on,” Ellis said.

But Asonye pushed back, saying the evidence was being presented so jurors could follow where money was deposited and how it was spent.

Ellis acquiesced and allowed Asonye to continue his examination.

Welch then told prosecutors Manafort’s tax returns from 2011 to 2014 were incorrect for various reasons, the least of which included his failure to check a box disclosing the existence of foreign bank accounts he controlled.

“He should have marked the box ‘yes,’” Welch said.

During cross-examination, defense attorney Kevin Downing asked Welch to explain whether or not Manafort could have claimed an “embezzlement deduction” in his taxes, given his client’s belief that his onetime assistant, Gates, embezzled money from his boss without his knowledge.

The revenue agent said such a deduction could be accounted for but it would only be a legitimate deduction if it was connected to reported income.

Prosecutors said there are eight more witnesses they expect to call by the end of Friday.

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