Banker With Immunity Takes Stand Against Manafort

ALEXANDRIA, Va. (CN) – A bank officer said in earlier testimony to have helped Paul Manafort fraudulently secure loans, the government’s potential last witness testified Monday that the transactions were approved at the behest of an executive who was angling for a spot in the Trump administration.

This courtroom sketch depicts Paul Manafort, seated right row second from right, together with his lawyers, the jury, seated left, and the U.S. District Judge T.S. Ellis III, back center, listening to Assistant U.S. Attorney Uzo Asonye, standing, during opening arguments in the trial of President Donald Trump’s former campaign chairman Manafort’s on tax evasion and bank fraud charges. (Dana Verkouteren via AP)

On the stand last week, Federal Savings Bank senior vice president Dennis Raico told the jury that James Brennan knowingly helped Manafort secure loans, even when it was evident that he lacked the assets to back them up.

Manafort’s control over the process was something he and other bank employees had never “seen [done] before,” Raico said.

At the Chicago-based bank, Brennan worked as a construction and commercial loan officer. Raico testified that he once urged Brennan in an email to “take a deep breath” before reviewing restructured terms for a $9.5 million loan that Manafort, their client, drew up himself.

The deal was being struck, Raico said, so that the bank’s chairman, Steve Calk, could land a spot inside the Trump administration, either as secretary of the Department of the Treasury or as secretary of the Army. Though Manafort resigned as chair of Donald Trump’s presidential campaign ahead of the election, his influence over the inaugural committee was addressed on the stand by Rick Gates, the government’s star witness.

At Federal Savings Bank, Brennan worked on the approvals for two loans Manafort requested totaling $16 million.

Testifying for the prosecution Monday after being granted immunity, Brennan said during direct examination that he first spoke to the FBI about Manafort in June 2017 in his front yard.

He told prosecutors he never spoke to Manafort directly but relied on information presented to him by Raico and his underwriting assistant Tom Horn.

Brennan testified he was alerted in an August 2016 email that Manafort’s profit and loss sheets for Davis Manafort Partners International LLC had discrepancies, but he already had a sense that the documents were “inconsistent.”

Federal Savings Bank president Javier Ubarri initially rejected the loan applications, Brennan said, based on an outstanding mortgage Manafort omitted in his loan application details.

But prosecutor Greg Andres pressed, asking Brennan to explain why the bank would ultimately approve the loan despite considerable misgivings about Manafort’s financial statements.

“[The loan] closed because Mr. Calk wanted it to close,” Brennan said.

In a brief this morning, prosecutors responded to a question by Judge Ellis about the materiality of any fraudulent representations that Manafort may have made to the Federal Savings Bank.

Ellis questioned specifically whether Calk’s intent to grant Manafort the loans in exchange for a spot in the Trump administration meant that Manafort could not have committed fraud.

Prosecutors say he could. “Even if Calk intended to approve Manafort’s loans for reasons relating to his personal interests, that would have no bearing on the materiality of Manafort’s false and fraudulent representations to the bank,” the brief states.

It is expected Brennan will testify on the nature of Manafort’s alleged tit-for-tat relationship with Calk, in addition to his role in the loan machinations. The witness is one of several whom Special Counsel Robert Mueller’s team gave immunity to testify.

Prosecutors could rest with Brennan’s testimony, which will begin once trial kicks off at 1 p.m., but they may also recall Paula Liss, an agent at the Treasury Department’s Financial Crimes Enforcement Network.

Whether Liss takes the stand, however, is dependent on a bid by Manafort’s attorneys to bar further testimony from Liss in Alexandria, Virginia, federal courthouse.

Liss testified earlier in the trial that Manafort failed to disclose foreign bank accounts. U.S. District Judge T.S. Ellis III is expected to rule on the matter early Monday afternoon.

Should Manafort’s defense team opt to rest, rather than call up any of the 12 witnesses they have subpoenaed, the next stage of the trial would be closing arguments.

Judge Ellis begrudgingly agreed Friday to set a two-hour time limit for each side’s statement.

“If you think you can keep jurors attention for two hours, you live on a different planet than I do,” Ellis said on Friday. “It is no accident that television programs are half an hour.”

Judge Ellis also said Friday that he would conference with attorneys Monday to sort out instructions jurors should be given ahead of deliberations.

This story is developing…

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