Robert Mueller Tightens The Screws On Paul Manafort With New Charges And A Rick Gates Guilty Plea

The Mueller investigation moves forward.

Yesterday, Special Counsel Robert Mueller filed sweeping new charges against former Trump campaign chairman Paul Manafort and his associate Rick Gates, charging them with a tax fraud scheme that hid up the $30 million that they had made while working on behalf of the former pro-Russian leader of Ukraine:

WASHINGTON — Even as he was managing Donald J. Trump’s campaign for president, Paul Manafort lied to banks to secure millions of dollars in cash loans as part of a decade-long money laundering scheme, according to charges unsealed by the special counsel on Thursday.

Mr. Manafort exaggerated his income by millions of dollars to take out mortgages on homes in SoHo and the Hamptons that he had purchased years earlier in part with income illegally funneled through offshore bank accounts, according to the indictment. The laundered money — which totaled $30 million — came from Mr. Manafort’s work as a lobbyist and political consultant to Viktor F. Yanukovych, the Russia-aligned former Ukrainian president.

But after Mr. Yanukovych was ousted in 2014 and fled to Russia, Mr. Manafort’s income quickly dwindled. The 32-count indictment describes a complex plot that Mr. Manafort then undertook to leverage money from his real estate with the help of his longtime business partner and campaign deputy, Rick Gates.

The charges do not involve Mr. Trump or his campaign and are not significantly different from ones filed against the men in October. But they outline new criminal behavior and appear to be the latest attempt by the special counsel, Robert S. Mueller III, to pressure Mr. Manafort and Mr. Gates to cooperate with his inquiry to avoid a lengthy prison sentence. The men have said they have nothing to offer Mr. Mueller on the central question of the investigation: whether any associates of Mr. Trump coordinated with Russia’s attempts to disrupt the 2016 election.

Mr. Manafort and Mr. Gates have pleaded not guilty, and a spokesman for Mr. Manafort denied wrongdoing.

“Paul Manafort is innocent of the allegations set out in the newly filed indictments, and he is confident that he will be acquitted of all charges,” the spokesman, Jason Maloni, said in a statement. “The new allegations against Mr. Manafort, once again, have nothing to do with Russia and 2016 election interference/collusion.”

Mr. Manafort has also sued the Justice Department, claiming that Mr. Mueller’s previous indictment against him demonstrates how he has overstepped his authority by bringing charges unrelated to Russian election meddling. Mr. Gates’s lawyer, Thomas C. Green, who was hired in recent weeks, has refused to discuss the case.

The investigation has been an unwanted distraction for the White House. After Mr. Gates and Mr. Manafort were indicted, a former national security adviser and a foreign policy aide to Mr. Trump have pleaded guilty to lying to the F.B.I. about their Russian connections. And 13 Russian operatives were charged with trying to sow chaos in the presidential election and tip the vote toward Mr. Trump.

The court records paint an unflattering portrait of the man who ran Mr. Trump’s presidential campaign from June to August of 2016, as the candidate secured the Republican nomination and moved into the general election against Hillary Clinton. Prosecutors say he concealed years of lobbying for the pro-Russia government in Ukraine and never properly registered with the United States government for that work. In the process, they say, he laundered millions of dollars in proceeds and misled investigators about how he received those funds.

He and Mr. Gates shielded millions of dollars from American tax authorities, court papers show, by moving the funds through foreign bank accounts around the world: in Cyprus, the Seychelles, and Saint Vincent and the Grenadines.

“Manafort and Gates hid the existence and ownership of the foreign companies and bank accounts, falsely and repeatedly reporting to their tax preparers and to the United States that they had no foreign bank accounts,” the indictment said.

Two of the largest loans totaled $16 million and were made by one bank. The bank is not identified in the indictment, but the description fits what The New York Times reported last year about loans to a company connected to Mr. Manafort called Summerbreeze L.L.C., which borrowed millions from Federal Savings Bank of Chicago, headed by Stephen M. Calk, an economic adviser to Mr. Trump at the time.

Mr. Manafort’s dealings with Federal Savings began in July 2016, when he was running Mr. Trump’s presidential campaign, and continued after he was ousted a month later. In each instance, according to the indictment, Mr. Manafort and Mr. Gates altered financial statements for their consulting business to make it easier for Mr. Manafort to qualify for mortgages.

Unlike the charges unveiled in October, which were filed in Federal Court in Washington, D.C., these charges were brought in the U.S. District Court for the Eastern District of Virginia, which sits across the Potomac in Alexandria. It had been reported for some time now that Mueller had convened a second Grand Jury in that court for the purpose of investigating Paul Manafort’s foreign lobbying activities, and it was this Court that was the origin of the search warrant that authorized the predawn raid at Manafort’s Northern Virginia home in August of last year. These charges (and the impending guilty plea by Rick Gates I discuss below) obviously stem from that aspect of Mueller’s investigation and represent another opportunity for Mueller to tighten the screws on Manafort to the point where he may be willing to talk to Mueller about a deal given the fact that, taken together, all these charges against him mean that, if convicted and sentenced to the time dictated by the relevant sentencing guidelines, Manafort would most likely lose everything he has and die in a Federal prison.

While these new charges are not directly related to the charges of Russian interference in the election and any contacts between the Trump campaign and Russian officials, they do put the lie to what has until now been the standard position of the White House when it comes to charges against Manafort. Specifically, the White House has said that the charges against Manafort relate to things he did prior to becoming President Trump’s campaign director. These new charges, though, relate directly to activities that both Manafort and Gates were engaging in while working on the campaign and appear to establish that, during this time, they were still in contact with their client Viktor Yanukovych, the former pro-Russian leader of Ukraine who was ousted amid protests in Ukraine and who now lives in exile in Moscow where he is believed to be part of the inner circle of oligarchs tied to Russian President Vladimir Putin. This indictment destroys the White House contention that there was no connection between Manafort’s work for Trump and the crimes he was accused of and raises the possibility of yet another tie between Trump campaign and an official close to Putin’s government. In that sense, this

In another big story, Maggie Haberman and Mark Mazzetti of The New York Times are reporting that Gates is about to plead guilty to the charges pending against him as a result of both this new indictment and the charges pending in the District of Columbia:

WASHINGTON — A former top adviser to Donald J. Trump’s presidential campaign indicted by the special counsel was expected to plead guilty as soon as Friday afternoon, according to two people familiar with his plea agreement, a move that signals he is cooperating with the investigation into Russia’s interference in the 2016 election.

The adviser, Rick Gates, is a longtime political consultant who once served as Mr. Trump’s deputy campaign chairman. The plea deal could be a significant development in the investigation — a sign that Mr. Gates plans to offer incriminating information against his longtime associate and the former campaign chairman, Paul Manafort, or other members of the Trump campaign in exchange for a lighter punishment.

The deal comes as the special counsel, Robert S. Mueller III, has been raising pressure on Mr. Gates and Mr. Manafort with dozens of new charges of money laundering and bank fraud that were unsealed on Thursday. Mr. Mueller first indicted both men in October, and both pleaded not guilty.

Mr. Gates’s primary concern has been protecting his family, both emotionally and financially, from the prospect of a drawn-out trial, according to a person familiar with his defense strategy who was not authorized to publicly discuss the case and spoke on the condition of anonymity.

If Mr. Manafort continues to fight the charges in a trial, testimony from Mr. Gates could give Mr. Mueller’s team a first-person account of the criminal conduct that is claimed in the indictments — a potential blow to Mr. Manafort’s defense strategy.

It was unclear exactly what Mr. Gates might have to offer the special counsel’s team, whether about Mr. Manafort or about other members of the Trump campaign. Neither indictment indicated that either Mr. Gates or Mr. Manafort had information about the central question of Mr. Mueller’s investigation — whether President Trump or his aides coordinated with the Russian government’s efforts to disrupt the 2016 election.

But Mr. Gates was present for the most significant periods of activity of the campaign, as Mr. Trump began developing policy positions and his digital operation engaged with millions of voters on platforms such as Facebook. Even after Mr. Manafort was fired by Mr. Trump in August 2016, Mr. Gates remained on in a different role, as a liaison between the campaign and the Republican National Committee. He traveled aboard the Trump plane through Election Day.

The probability of a guilty plea by Rick Gates has been floating around for the better part of a month now, especially since he fired the attorneys who had been representing him since October and hired an attorney named Tom Green who is known for negotiating plea deals in high profile cases such as this. Earlier this week, in fact, it was being reported that Gates was in the final stages of negotiating a deal with Mueller to plead guilty in exchange for a more lenient sentence. Yesterday, though, there were rumors circulating just prior to the handing down of these new indictments that Gates had parted ways with Green, which some interpreted as a sign that plea negotiations had fallen apart. The new indictment seemed to bolster that idea even though there was no indication that the rumors were true. Instead, it now seems clear that the new indictment was part of Mueller’s strategy to keep tightening the screws on Manafort in an effort to either force him to also start considering becoming a cooperating witness in Mueller’s investigation. If that proves to be unsuccessful, of course, then Gates will obviously become a very useful witness in connection with any future prosecution of Manafort in either the case pending in the District of Columbia or the case that was opened yesterday in Federal Court in Northern Virginia.

In addition to the prosecution of Manafort, it’s also likely that Gates has at least some information that could prove useful to Mueller in the overall Russia investigation itself, including both Russian efforts to influence the election and in connection with any ties that may have existed between the Trump campaign and Russians official tied to the Russian government in general and Vladimir Putin specifically. For several years prior to joining the Trump campaign, and apparently while that campaign was still going on, Gates along with Manafort did work for and had contact with Yanukovych as well as Russian oligarchs close to Putin who backed his regime in Kiev. While this may not have given Gates direct access to the efforts to interfere in the election, the knowledge he gained from those years of representation could prove useful to Mueller in connecting the dots provided by other witnesses and pieces of information relevant to the investigation. Additionally, Gates worked alongside Manafort as his chief deputy the entire time he was Donald Trump’s campaign manager, which included roughly coincided with the period from near the end of the campaign for the nomination through the Republican National Convention and for several months after that. As such, he’s likely to have significant information regarding the operation of the campaign and any contact between the campaign and Russian officials or representatives of Russian officials. This is likely to include events such as the June 2016 meeting at Trump Tower between Manafott, Donald Trump, Jr., and Jared Kushner and a Russian lawyer tied to the government that was initially sold to the campaign as being for the purpose of passing along “dirt” about Hillary Clinton.

In any case, these announcements come just a week after Mueller had announced the indictment of thirteen Russians in connection with part of the scheme that Russian intelligence used to interfere in the 2016 election and influence American public opinion in a way that was clearly designed to harm Hillary Clinton and promote political chaos. As with that announcement, these developments are a strong indication that, rather than wrapping up anytime soon, Mueller’s investigation is entering a new, and far more publicly assertive, stage. Where we go next will be highly interesting to see.

Here’s the Indictment:

United States v. Manafort and Gates by Doug Mataconis on Scribd

And here’s the “Information” filed this morning in U.S. District Court in Washington, D.C. detailing the charges that Rick Gates is expected to plead guilty to later today:

Information filed in United States v. Gates by Doug Mataconis on Scribd

FILED UNDER: Crime, Donald Trump, Intelligence, Law and the Courts, National Security, Politicians, Russia Investigation, US Politics, , ,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. Daryl's other brother Darryl says:

    The idea that a guy this slimey with ties to powerful people in Russia wouldn’t accept help when offered is ridiculous. There’s never going to be a Perry Mason moment…the smoking gun email…but I bet Mueller puts it all together for those capable of believing the Dear Leader is illegitimate.




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  2. Kathy says:

    Cue the calls to indict Clinton for the Steele Dossier in three, two…




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  3. michael reynolds says:

    This has always been about money-laundering, always been about desperate men – Trump and Manafort – looking to mob money to keep their shaky enterprises alive.

    At a time when Manafort was absolutely desperate to come up with 16 million he owed to some bad, bad men, he took an unpaid job as campaign manager for Trump. The quid pro quo is obvious: Manafort was inserted to serve the Russians inside the Trump campaign, to keep an eye on their other, dumber asset, Donald J. Trump. The fact that Trump embraced this, knowing full well who was holding Manafort’s strings, goes to his own indebtedness to his Kremlin master. Vladimir Putin chose Trump’s campaign manager.

    Manafort bought himself some time by agreeing to be the Kremlin’s own Trump-sitter, but he obviously still owes. Manafort needs to make a deal which will include post-prison witness protection, and protection right now for his family. Putin will kill him.




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  4. Modulo Myself says:

    Whenever there’s any news about Russia, it’s always noteworthy that none of Trump’s defenders has anything to say until the official line has been established. They’re like a dog whose master was arrested for being a serial killer. Just try explaining to the dog that the guy who fed it every day was dressing like a clown and going on killing sprees.

    Anyway, Mueller has not given any indication of where this investigation is going. I used to think it was mostly the money, or a very minor quid pro quo. Now I’m not so sure. Trump and Putin’s relationship is might be very close to Trump and the National Enquirer, with Trump as the National Enquirer.




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  5. CSK says:

    @michael reynolds:

    Which raises the question of…who in the White House now is acting as Putin’s official Trump-wrangler?




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  6. michael reynolds says:

    @CSK:
    Jared? Ivanka?




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  7. michael reynolds says:

    @Modulo Myself:
    It’s remarkably consistent. The story is too complex and multi-layered for the rubes to follow, so they have to wait till Hannity tells them what to think. Then they come toddling over here, all full of swagger thinking they’ve got something and get routinely destroyed in the first two minutes of battle.

    The fact that they are always, always annihilated and yet keep coming back to be annihilated once again is testimony to the cult-like nature of their devotion. Normal people have a limit to how often they’ll allow themselves to be ridiculed. But cult members? Remember the old days when Hare Krishna enraged people going through airports? The link is to some documentary footage of how people dealt with it.




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  8. CSK says:

    @michael reynolds:

    I could be wrong–it happens–but my money’s on Jared. Why else would Mueller be investigating Jared’s financial shenanigans?




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  9. michael reynolds says:

    @CSK:
    The question I’ve always had is how clued-in Ivanka is to Jared’s dirty dealings. Is she walled off? Or is she complicit? I think the reason they’re after Jared is the same thing: money-laundering and the attendant tax evasion. They know he pushed for Comey’s firing which means it’s more likely he has something to hide or knows that Trump does. I think they suspect he’s taking foreign money.

    In fact, I’m going to bet a dollar (at say, 50 to 1) odds, that Jared may be arrested on espionage charges. He’s awfully desperate for money, the banks won’t help him which means they strongly suspect he’s dirty, and he’s already been caught trying to work deals with the Chinese. He has no clearance but he sees all the intelligence and is the most avid requester of additional intelligence.




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  10. Mister Bluster says:

    Count Two, False Statement.
    On or or about February 1, 2018, in the District of Columbia, the defendant, RICHARD W. GATES III, did willfully and knowingly….(yada, yada, yada).

    Wasn’t Gates already under indictment at that time? How fvcking dumb is this guy?




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  11. CSK says:

    @michael reynolds:

    Ivanka’s a bit of a mystery in this regard. She may not want to know for a variety of reasons, the premier of which is that she wants to keep herself out of prison if that’s where her hubby ends up going. His financial shenanigans my be entirely separate from hers. To what degree her father confides in her, I can’t say. He may want to keep her close to him simply because of his oft-admitted and presumably unrequited lust for her.




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  12. Naomi says:

    I really hope Manafort fights like Hell. Mueller is going after people who are close to Trump. He pulls his mobster act and desyroys their lives. Hes a punk. When Hillary and her collection of felonies and Clinton foundation need to put on the orange jumpsuit and do some time.




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  13. michael reynolds says:

    @Naomi:
    Thanks you, tovarish, for dropping by to show off your most excellent number one English. Is really very good no?




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  14. OzarkHillbilly says:

    @michael reynolds: Indeed.




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  15. mattb says:

    Jeebus. I honestly cannot tell if @Naomi is a for real Russian troll or someone who has really captured the voice of a Russian troll. And I’m not sure which scenario I’d prefer it to be.




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  16. Tyrell says:

    Mueller needs to investigate why Russia is buying up all the gold it can get.
    Are we looking at a monetary crisis looming?




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