Prosecution Cites Lavish Spending by Paul Manafort in His Fraud Trial
ALEXANDRIA, Va. — To the manager of Alan Couture, a high-end men’s wear boutique in Manhattan, Paul Manafort was one of his top five customers, spending more than $900,000, paid by wire transfer, over five years ending in 2014.
The controller for the House of Bijan in Beverly Hills, Calif., sometimes called “the world’s most expensive men’s store,” said he was “a very good customer.” A neighbor of Mr. Manafort’s in suburban Virginia recalled how he showed him a $1.9 million home and Mr. Manafort decided to “go for it,” offering the seller full price.
The second day of the trial for Mr. Manafort, President Trump’s former campaign chairman, on tax and bank fraud charges felt at times more like “Lifestyles of the Rich and Famous” than a first, politically charged courtroom test of the inquiry led by the special counsel, Robert S. Mueller III.
But the prosecutors on Mr. Mueller’s team had a very specific goal in calling witnesses to testify about Mr. Manafort’s spending habits: to present the jury with detailed evidence that he wired millions of dollars from secret overseas bank accounts to buy and renovate homes in places like the Hamptons and suburban Washington, shop at the country’s most exclusive men’s boutiques and snap up one luxury vehicle after another with income he hid from the tax authorities.
In offering vivid details about Mr. Manafort’s thirst for the finer things in life, the prosecutors sought to paint him as a man driven by greed, adept at lies and shrewd enough to cover his tracks with false invoices, sham companies and wire transfers from financial institutions in a city in Cyprus that his vendors in the United States had never heard of.
They were curbed, to an extent, by Judge T. S. Ellis III of the United States District Court in Alexandria, Va. He repeatedly held the prosecutors at bay, refusing to allow them to describe Mr. Manafort’s new pool house at his home in the Hamptons or to show jurors photographs of Mr. Manafort’s closets of expensive suits at his condominium in Arlington.
“Enough is enough,” Judge Ellis said angrily at one point. “We don’t convict people because they have a lot of money and throw it around.”
He added later, “The government is not going to prosecute people for wearing nice clothes.”
But the government’s exhibits, made public after the proceeding ended, detailed Mr. Manafort’s spending habits. From one of his favorite stores in California, he bought a $33,000 “blue lizard” jacket, an $18,000 suede coat, a $14,000 quilted silk jacket, a $12,000 brown pinstriped suit, pants priced around $2,800 apiece, dress shirts costing $1,500 each and ties that averaged about $950 each.
At his request, the invoices show, a saleswoman flew to Manhattan from Los Angeles in 2011 and met him at a five-star hotel, where she sold him nearly $65,000 in clothing.
The trial will not touch on the central elements of Mr. Mueller’s inquiry — the extent of Russian involvement in the 2016 presidential election, any collusion by Mr. Trump or his campaign and whether Mr. Trump obstructed justice in his response to the Mueller inquiry.
The government’s case revolves around charges that Mr. Manafort sought to hide and evade taxes on much of the $60 million he earned as a political consultant to Ukraine’s pro-Russia president, Viktor F. Yanukovych, during a five-year period ending in 2014.
A veteran Republican lobbyist and political operative, Mr. Manafort has also been charged with defrauding banks in loans he obtained after Mr. Yanukovych fled to Russia in 2014. Mr. Manafort’s income fell sharply when he lost Mr. Yanukovych as a client.
But the case has nonetheless attracted intense interest from both Mr. Trump’s critics and the president himself.
Mr. Trump, who has alternately distanced himself from and supported Mr. Manafort, weighed in on Twitter. He suggested that Mr. Manafort, who served as his campaign chairman for three critical months in mid-2016, is being victimized by Mr. Mueller because after 15 months, that inquiry has turned up no evidence that the Trump campaign cooperated with Russian actors.
Witness by witness, exhibit by exhibit, the day’s proceeding often pitted Judge Ellis, 78, against three federal prosecutors, who claim that Mr. Manafort’s financial scheme allowed him to indulge in what most people would see as a jaw-dropping spending pattern.
Breaking some new ground, the prosecutors elicited testimony from a clothing store manager and the former owner of a construction company whose invoices appeared to have been doctored. In one case, part of the store’s name — Couture — was misspelled and the ZIP code was wrong. That evidence was apparently part of the government’s attempt to show that Mr. Manafort falsified a host of financial records, including his expenditures, to hide his real income.
The prosecutors also claim that Mr. Manafort tried to falsify some payments from Ukraine as loans so that he did not have to report the income. The loans, they claim, were written up on just a couple of sheets of paper, carried no interest and were later “forgiven.”
They also sought to puncture the core of Mr. Manafort’s defense — that Rick Gates, his longtime associate who pleaded guilty this year to financial fraud in the same case, was the mastermind behind the fraudulent activity.
In cross-examination, Mr. Manafort’s lawyers argued that while he had a reputation for having an eye for detail, he was not on top of his bills, forcing some vendors to call on Mr. Gates as an intermediary.
Though Mr. Gates was initially seen as the star witness for the government’s case — a former associate cooperating with a federal investigation and capable of providing personal insight into Mr. Manafort’s dealings — prosecutors surprised the courtroom on Wednesday by declining to confirm whether he would testify.
“He may testify, he may not,” said Uzo Asonye, a prosecutor from the United States attorney’s office in Alexandria who was drafted by Mr. Mueller to help try the Manafort case.
Ruling his courtroom with an iron hand, Judge Ellis has forced the trial to proceed at a pace so brisk that the prosecutors now say they can get through their evidence by next week, a week earlier than they had originally forecast.
But despite the judge’s complaints about their focus on Mr. Manafort’s extravagance, the prosecutors detailed purchases from boutiques so exclusive that even Judge Ellis joked that he had never heard of them.
“I can’t recognize these names,” he said to laughter in the courtroom. “If it doesn’t say Men’s Wearhouse, I don’t know it.”
Yet moments afterward, the judge again criticized prosecutors for showcasing Mr. Manafort’s lifestyle instead of the alleged financial machinations that they claim made it possible.
“What is the virtue of describing it?” the judge asked, visibly annoyed with a contractor describing an American cedar pergola in what he deemed “exquisite detail.”
“The answer,” he said to the prosecution, “is none.”