ALEXANDRIA, Va. (CN) - Cindy Laporta, an accountant who is the first witness granted immunity by prosecutors to testify against former Trump campaign chairman Paul Manafort, admitted Friday that she filed tax returns she knew contained false information supplied to her by Manafort and his former business associate, Rick Gates.
"You can't pick and choose what's a loan and what's income," she told jurors on the fourth day of Manafort's trial. “I very much regret it.”
Laporta took over Manafort's account in 2014 from a colleague, Philip Ayliff, after he retired their firm, Kositzka, Wicks and Company in Richmond, Virginia. Ayliff took the stand Thursday afternoon and continued to be questioned by prosecutors and Manafort's defense team well into Friday.
Before Laporta took the stand, U.S. District Judge T.S. Ellis III said either side could raise the immunity issue before the jury as she testifies.
Laporta, who signed Manafort's tax returns in 2014 and 2015, told the jury KWC gave Manafort a letter making clear they were not auditing or verifying the information clients provided.
She said as she prepared Manafort's returns, she gathered information directly from him; and from his former business associate, Rick Gates; and their bookkeeper, Heather Washkuhn.
“But who would provide [final] verification of information?” Assistant U.S. Attorney Uzo Asonye asked.
“Mr. Manafort,” she said.
Laporta also told prosecutors that she never sent Manafort's tax forms without his primary approval.
When she asked for underlying loan documents or back up documents for Manafort’s 1099s or K-1 tax forms, she said she “didn’t always receive them.”
When she didn’t, she would document the omission.
Laporta also said that the firm didn’t investigate or verify the presence of any foreign bank accounts belonging to Manafort while preparing his taxes. That wasn’t something Kositzka, Wicks and company did -- it was left up to the owner of those bank accounts, she said.
In a series of emails spanning more than a year displayed in court, Laporta asked Manafort about his foreign-asset disclosures and whether anything had changed.
“No change from 2012 [form],” Manafort wrote.
“If you had known about the foreign accounts what would you have done?” Asonye asked.
Laporta said had she known she would have dug into the origins of the accounts and tracked the flow of money there.
“The penalties and fines are just huge for noncompliance,” she said.
Laporta also told jurors about a September 2015 conference call she had with Gates and her partner, Conor O’Brien, in which they discussed changing the amount of a loan so that Manafort could afford to pay his income taxes.
“He was trying to reduce income and therefore reduce income taxes,” she said.
Laporta said the discussions happened after her company sent a draft tax-return document that included an estimate of how much Manafort would owe. Gates said during the conversation that Manafort did not have the money to cover that much tax.
They agreed to a $900,000 loan, which “Rick said could be paid,” she testified.
Laporta said she knew it was “wrong” to reclassify income as a loan but that her obligation to Manafort, a longtime client, made it difficult to refuse.
