Manafort trial day 4: Accountant concedes possible wrongdoing, Manafort’s double life
An accountant for former Trump campaign chairman Paul Manafort admitted at Manafort’s tax- and bank-fraud trial Friday that she filed tax returns she thought contained false information and that she may have committed a crime in doing so.
Cindy Laporta said she had a sense that what Manafort and his aide Rick Gates told her about money being transferred into their international political consulting business wasn’t accurate.
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“I prepared the tax returns and communicated with banks based on information that Mr. Gates and Mr. Manafort provided to me that I didn’t believe,” said Laporta, the first witness at the trial to testify under a grant of immunity.
The admission was the first time a witness has acknowledged knowing of potential wrongdoing during Manafort’s trial, in which the longtime lobbyist is fighting charges brought by special counsel Robert Mueller. Laporta is one of five people on Mueller’s witness list for whom the government requested immunity.
Laporta, who works for Kositzka Wicks & Co., based in Alexandria, Virginia, said she sought immunity because she was concerned about being prosecuted. Her attorney had indicated that Laporta would invoke her Fifth Amendment rights if forced to testify without immunity.
Laporta’s testimony was some of the first evidence to support bank fraud charges in the federal indictment against Manafort. Her statements were some of the most damaging testimony at the trial thus far, but the presence of Gates in many of her dealings with the tax and financial issues may leave the defense an opening to pursue their argument that Gates was freelancing when he drafted loan-related documents that may have been backdated and forged.
Laporta said that when preparing tax returns and related records, she agreed to treat as loans $2.4 million in funds that Manafort’s consulting firm received from offshore businesses, even though she had doubts that they really were loans and got little documentation to back up that claim.
The accountant said her requests for details on the loans yielded unusual one- or two-page documents, not the typical stack of paper with numerous clauses. The alleged loans were also recorded in the books of Manafort’s DMP International as coming from the consulting firm’s customers, which Laporta found suspicious.
“I had not seen that before,” she said. “Yes, it was a concern.”
In another exchange, Laporta testified that Gates told her in September 2015 that Manafort’s income needed to be reduced so he could afford to pay his taxes. To finesse the situation, she said, Gates instructed her to reduce Manafort’s income by not counting one of his loans.
While Laporta said she followed the instructions, she told Mueller prosecutor Uzo Asonye that the move was “not appropriate.”
“We can’t pick and choose what’s a loan and [what’s] income,” she explained.
Although the purported loans allowed Manafort at one point to bring in cash without paying taxes, a $1.5 million loan from a company called Peranova in 2012 caused problems by 2016 when Manafort was seeking a fresh loan from Citizens Bank.
“The bank wanted to see more money available to pay back the loan” it was considering, Laporta said. “There wasn’t enough income and there was the debt.”
Laporta said Manafort or Gates — she was unclear about which one — told her the loan had been forgiven in 2015, so she passed on that information to the bank.
“What information did you rely on in providing this response?” Asonye asked.
“Their word,” Laporta replied.
“Did you believe the $1.5 million loan from Peranova had actually been forgiven?” the prosecutor asked.
“Uh … no,” she answered.
When the bank asked for documentation, Gates sent Laporta a draft forgiveness letter dated June 2015, even though it was February 2016, she said.
“At the time, did you believe this document was true or false?” Asonye asked.
“False,” she said.
“Did you understand this letter to be backdated?” the prosecutor asked.
“Yes,” Laporta said.
Eventually, Gates sent a copy of the forgiveness letter that was signed by someone claiming to be a director of Peranova, but still dated eight months earlier.
Gates pleaded guilty in a related case in February and agreed to cooperate with prosecutors in exchange for most of the charges against him being dropped. He’s expected to testify against Manafort in the coming days.
Asked why she went along with the fake memo, Laporta said, “I honestly believed the bank would have to vet that document themselves, and I felt I was protected by having them prepare that document and own that document.”
The accountant also testified that in August 2016, while he was at the helm of the Trump campaign, Manafort pressed her directly for a revised financial statement that would show his firm anticipating income when it had received none at all that year.