Manafort trial: Cindy Laporta testifies it was 'wrong' to agree to loan increase on former Trump aide's tax returns
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An accountant for Donald Trump's former campaign chairman Paul Manafort testified on Friday that she prepared his tax returns despite her concerns about the propriety of classifying money he transferred from overseas as loans.
Judge TS Ellis asked the accountant, Cynthia Laporta, whether she was testifying under an immunity agreement with the government because she was concerned that she could be prosecuted. She answered, “Correct.”
Ms Laporta testified she knew an accounting treatment for a loan was wrong when preparing Mr Manafort's tax return for 2014. “I very much regret it,” she told the courtroom.
Her testimony came on the trial's fourth day as prosecutors sought to drive home their case that Mr Manafort tried to hide millions of dollars he earned working for pro-Russian politicians in Ukraine. Manafort, 69, has pleaded not guilty to charges of bank fraud, tax fraud and failing to disclose foreign bank accounts.
Follow live updates from day four of the Manafort trial here:
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The trial in federal court in Alexandria, Virginia, is the first arising from Special Counsel Robert Mueller's investigation of Russia's interference in the 2016 US election.
Both Ms Laporta and fellow accountant Philip Ayliff, her predecessor who handled Mr Manafort's tax filings at the firm KWC, testified that they had no knowledge that Mr Manafort controlled foreign bank accounts. Such accounts must be reported to tax authorities if they contain $10,000 or more.
Ms Laporta said she asked Mr Manafort directly about any such holdings and was told there were none.
Prosecutors have tried to make their case first by presenting testimony about Mr Manafort's lavish lifestyle and then detailing his financial dealings.
Defence attorneys have signalled they will seek to blame the financial charges against Mr Manafort on his business partner Rick Gates, who was President Trump's deputy campaign chairman in the 2016 presidential election.
Hello and welcome to The Independent's live coverage of day four of the trial of former Trump campaign manager Paul Manafort, who is face a string of charges relating to tax avoidance and bank fraud.
Thursday's hearing saw a number of key moments, including testimony from a former bookkeeper of Mr Manafort's who told the court she was unaware of several offshore bank accounts he allegedly used to fund lavish purchases.
Here is all the action from yesterday as it happened:
Earlier this week, a prosecutor had suggested that the government's star witness in the case, former Manafort associate Paul Gates, may not take the stand after pleading guilty to making false statements after being indicted under the Mueller probe.
However, on Thursday, lawyers on Mr Mueller's team confirmed he was likely to testify and may even given evidence on Friday.
While prosecutors now seem fairly sure Paul Gates will give evidence, there is less certainty over if Paul Manafort himself will testify during the trial.
Yesterday trial judge TS Ellis said he would not pressure defense lawyers into making a decision on whether or not Mr Manafort will take the stand until they begin presenting their evidence later in the proceedings.
"He will not be penalized for the right to remain silent," Mr Ellis added.
So far, judge TS Ellis has prevented the jury from being shown pictures of Paul Manafort's large collection of high-end, custom jackets, which the prosecution says attests to his lavish lifestyle and expensive tastes.
Prosecutors argue the fact Mr Manafort had an expensive lifestyle that required a lot of money to maintain is important proof as to why he would commit a bank fraud.
However, the judge blocked the airing of the evidence in court and reminded both lawyers and jurors multiple times that it is “not a crime for a person to be rich”.
The US Justice Department has however released the photographs to the public, meaning we can gaze upon this snakeskin wonder:
On Thursday, the court heard from Philip Ayliff, an accountant with KWC who prepared tax returns for Mr Manafort.
Mr Ayliff said Mr Manafort never told him he held foreign bank accounts and a lack of accurate information would lead to an incorrect tax return.
It was an issue he paid close attention to since 2010 when the US Treasury Department ramped up its enforcement of a law requiring US disclosure by US citizens of their overseas bank accounts, Mr added.
The government is expected to finish questioning him on Friday, before calling its next witness in the trial.
Testimony also came from Mr Manafort's former bookkeeper Heather Washkuhn, who said she too was unaware of his foreign holdings and had relied on him to say whether wire transfers should be designated as loans or as income.
Prosecutors showed emails sent by Mr Manafort and his former business partner Rick Gates to various banks that contained profit and loss statements for Manafort's consulting firm.
Ms Washkuhn testified that her firm had not prepared those statements, which painted a rosier picture of the finances and contained multiple spelling, formatting and date errors.
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Former federal prosecutor, Joe diGenova, has claimed special counsel Robert Mueller’s team is attempted to “coerce” Mr Manafort into testifying negatively about Donald Trump during the course of his trial.
Mr diGenova went as far as to claim Mr Mueller was using tactics "normally reserved for the mafia and terrorists".
Philip Ayliff, a tax preparer for Paul Manafort, has testified to the jury that his tax preparation firm received several emails from Mr Manafort and his right hand man Rick Gates assuring the accountants that they had no foreign accounts.
Mr Ayliff's firm asked Mr Manafort directly in an email in 2011 if he, or his wife, or two daughters had foreign accounts.
Mr Manafort said no, according to an email shown to the jury.
Mr Ayliff said that again in 2012, Mr Gates told the accounting firm “we do not need to file for Paul [Manafort]” documents that showed his interest in Cypriot accounts to the US government.
In 2013, the accountants asked about Mr Manafort's foreign accounts a third time.
The accountants reminded Gates in an email that Mr Manafort would need to disclose to the US Treasury Department any foreign accounts he controlled.
“As discussed, to my knowledge, nothing has changed,” Mr Gates wrote back.
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