Paul Manafort's former bookkeeper has testified that the former Donald Trump campaign chairman kept her in the dark about the foreign bank accounts he was using to allegedly buy millions in luxury items and personal expenses.
Mr Manafort, facing trial on back fraud and tax charges otherwise approved “every penny” of the personal bills she paid for him, said Heather Washkuhn of the accounting firm NKFSB.
Washkuhn's testimony on the third day of the trial appeared to undercut an argument by Manafort's attorneys that he can't be responsible for financial fraud because he left the details of his spending to others, including his longtime associate Rick Gates. Washkuhn said Gates was involved only in Manafort's business dealings, not his personal expenses.
When it came to personal expenses, Mr Manafort - who denies all the charges against him “approved every penny of everything we paid,” Ms Washkuhn told jurors.
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After suggesting yesterday that their potential star witness, Mr Manafort's former associate Rick Gates, may not take the stand, the prosecution have clarified they do intend to call him.
Mr Gates would take the stand - possibly as early as Friday - prosecutor Greg Andres said in court without the jury in the room.
Mr Ellis said he did not yet know if Mr Manafort would testify in his own defense, and did not want to force a decision from the defense team until they begin their side of the case, after the prosecution's case rests.
“He will not be penalized for the right to remain silent,” Mr Ellis said.
Judge Ellis has so far stopped the prosecutors from showing photos of Mr Manafort’s luxury purchases to the jury. The defense has wanted them kept out of the trial too. Mr Ellis has reminded the lawyers and Northern Virginia jurors multiple times that it’s not a crime for a person to be rich.
But in a filing, prosecutors wrote:
“That Manafort had an expensive lifestyle that required lots of money to maintain is important proof as to why he would commit the bank frauds” after his lobbying work declined in 2014.
A landscaper in the Hamptons has described in court how Paul Manafort — and Mr Manafort alone — commissioned him to care for hundreds of flowers at his house, as well as "one of the biggest ponds in the Hamptons."
Michael Regolizio of New Leaf Maintenance said Mr Manafort paid for much of the work through international wire transfer, and was his only client to do so.
Mr Regolizio testified that Mr Manafort spent about $450,000 on landscaping over five years.
Next to take the the stand is Paul Manafort's bookkeeper, Heather Washkuhn.
Prosecutors say her testimony will delve into the tax and bank fraud allegations in their case. Mr Manafort is accused of lying to the IRS to hide his income, and lying to banks to secure millions of dollars in loans.
Mr Manafort has pleaded not guilty to all charges.
The landscaper described the pond and waterfall at Mr Manafort's home in Bridgehampton as "one of the biggest ponds in the Hamptons".
Prosecutor Greg Andres asked Ms Washkuhn if she had ever heard of 14 different shell-company bank accounts Mr Manafort is alleged to have used. Ms Washkuhn answered "no" to every account.
Paul Manafort was a big spender when it came to computers and entertainment — spending millions on audio-video home installations, and $10,000 on a karaoke system for his Hamptons mansion, according to prosecutors.
Prosecutors read details about wire transfers that Mr Manafort sent to pay for the karaoke system in 2010 during a stream of testimony from vendors who sold high-end goods and services to Mr Manafort.
Paul Manafort's longtime bookkeeper Heather Washkuhn said in court that Mr Manafort paid himself a salary of $1.99 million in 2012, according to her testimony about his finances from his political consulting firm.
Ms Washkuhn also said Mr Manafort paid his longtime deputy Rick Gates a salary of $240,000 in 2012. Mr Gates made the same salary in 2013 and 2014.
Mr Gates is expected to take the stand for the prosecution in the next few days.
After the income from foreign lobbying in Ukraine dried up, Paul Manafort found himself in serious financial trouble. By early 2016, Mr Manafort was falling behind on bills and maxing out a bank credit line, his longtime bookkeeper Heather Washkuhn told jurors.
Mr Manafort denies all the charges against him.
Bookkeeper Heather Washkuhn testified that was “four million more than what was reported on the documents that we created.” Her firm recorded the company making about $400,000 that year.
"Paul Manafort's longtime bookkeeper is testifying that profit and loss statements the former Trump campaign chairman submitted to obtain bank loans contained false information — and, at times, obvious misspellings.
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Earlier, prosecutors asked the judge to allow photographs of his lavish lifestyle to be shown to jurors, arguing it is crucial to their case.
Judge TS Ellis has so far stopped the prosecutors from showing photos of Mr Manafort’s luxury purchases to the jury. Mr Ellis has reminded the lawyers and Northern Virginia jurors multiple times that it is not a crime for a person to be rich.
Prosecutors spent the first two days of the trial attempting to portray Mr Manafort as a tax cheat and a liar who hid much of the $60 million he earned from political work in Ukraine by stashing it in undisclosed overseas accounts.
Mr Manafort routed millions of dollars to the United States by putting it in real estate, and spending it on expensive suits, cars and home renovations, according to half a dozen witnesses who testified on Wednesday.
Prosecutors allege that Mr Manafort evaded taxes through this scheme. Five of the 18 counts he faces relate to filing false tax returns. Mr Manafort has pleaded not guilty to all charges.
In a new filing, prosecutors wrote: “Manafort had an expensive lifestyle that required lots of money to maintain is important proof as to why he would commit the bank frauds” after lobbying work in Ukraine declined in 2014.
The trial is the first stemming from Special Counsel Robert Mueller's 14-month investigation of Russia's apparent meddling in the 2016 US presidential election and potential coordination between the Trump campaign and Moscow, though none of the charges against Mr Manafort involve this issue.
Prosecutors are due to question the head of a landscaping firm and one other vendor on Thursday before moving on to call accountants and a “series of tax preparers” to the stand.
