U.S. prosecutors filed a straightforward, easy-to-prove criminal case against former Trump campaign manager Paul Manafort, leaving him with a stark choice: cooperate or fight the charges and, if he loses, face years in prison.
The indictment, unsealed on Monday, relies extensively on so-called document charges — essentially that Manafort and his business partner Richard Gates didn’t file reports to the government that they were required to under the law. Such cases are rarely prosecuted, but they still carry the potential for prison time, particularly when combined with the more serious charges of money laundering. The maximum sentence for money laundering is 20 years. Cooperation with Special Counsel Robert Mueller, on the other hand, can win Manafort leniency.
“They’ve adhered to the old adage of, ‘Keep it simple.’ This is not an over-broad indictment, and I think their goal here is to make it quick,” said Peter Henning, a law professor at Wayne State University in Detroit and former federal prosecutor. “It could be a means to gain their cooperation in a broader investigation, and I think that’s what Mueller’s trying to do.”
Manafort and Gates are charged with conspiracy against the U.S., money laundering, making false statements and failing to disclose foreign bank accounts. The U.S. claims the men failed to reveal their work for Ukraine, its political parties and its leaders — and together worked to hide it from the Justice Department. The charges may present a low hurdle for the government because the essence of the case is the failure to disclose work for the foreign government or the existence of offshore accounts.
Prosecutors rarely file criminal cases over the Foreign Agents Registration Act — a point stressed by Manafort’s lawyer Kevin Downing on Monday, after Manafort and Gates pleaded not guilty in court.
“The U.S. government has only used that offense six times since 1966 and only resulted in one conviction,” Downing told reporters. He called the government claims ridiculous.
But the inclusion of the money-laundering allegation puts more muscle in the indictment, both in the time behind bars that they face and the money they would stand to lose.
“That’s why the money-laundering charge is critical to the government’s case,” said Jaimie Nawaday, a partner at Kelley Drye & Warren and former money-laundering prosecutor in New York. “Without it, you may not have enough to put pressure on the defendants.”
The money-laundering charges are tougher to prove, said Robert Capers, a former U.S. Attorney in Brooklyn, New York, who is now a partner at Arent Fox. "You’re proving the underlying unlawful act” — in this case, the failure to disclose Manafort’s work for Ukraine — and that he concealed transactions tied to it, he said. “It’s more work.”
“Money laundering is typically one of the hardest crimes to prove,” added Ross Delston, a Washington attorney and anti-money laundering expert. “One of the hallmarks of money laundering is the complexity of movements of money, often originating in offshore financial centers and not having an apparent business or economic purpose.”
It remains to be seen whether Manafort has any evidence to offer Mueller even were he to cooperate. Manafort’s allies have said repeatedly that he has no proof of collusion between Russia and President Donald Trump’s campaign, and that he has no intention of aiding the government.
“There is no evidence that Mr. Manafort or the Trump campaign colluded with the Russian government," Downing said.
And Manafort may still hold out hope that Trump will eventually pardon him. Trump’s press secretary Sarah Sanders said Monday the issue of a pardon hasn’t been discussed.
Talks Unsuccessful
The indictment of Manafort and Gates by a grand jury suggests negotiations between Mueller and the defense teams were unsuccessful — if they occurred at all.
“Generally, the earlier you negotiate an agreement, the more favorable the terms,” said Samuel W. Buell, a law professor at Duke law school in Durham, North Carolina.
Prosecutors can also file additional, and more aggressive, charges later, such as tax evasion over the alleged failure to disclose foreign income to the Internal Revenue Service. But it may not be necessary to do so since the existing indictment already presents a substantial threat to Manafort and Gates, according to experts.
For years, Manafort and Gates represented Victor Yanukovych’s pro-Russian regime in Ukraine. They led a lobbying campaign in the U.S. from 2012 to 2014 to advance their clients’ interests, pressing members of Congress about U.S.-imposed sanctions related to Ukraine, the validity of the country’s elections and the propriety of the jailing of Yanukovych’s rival in the presidential election. They paid lobbyists $2 million from undisclosed foreign accounts, and another $4 million to produce a report about Yanukovych’s rival, according to prosecutors.
Shell Companies
Manafort is accused of laundering $18 million through the U.S. financial system using a web of foreign shell companies and bank accounts, while Gates is alleged to have laundered $3 million. Manafort and Gates had foreign accounts linked to 15 shell companies in Cyprus, the Grenadines, the Seychelles and the U.K. that should have been disclosed, prosecutors said. The two are also accused of using the foreign accounts to pay for luxury goods, homes and personal expenses in the U.S. without declaring the income.
The government is seeking forfeiture of Manafort’s Brooklyn brownstone and his SoHo condominium, as well as his house in the Hamptons and a house in Arlington, Virginia.
Legal experts said the typical defense in these cases is to plead ignorance about the requirements of the law, or for the defendants to claim that they didn’t think their particular work required disclosure. But they also cautioned that such a defense may be difficult for Manafort, given the repeated violations alleged and the sophistication of the operation.
"With the simplicity of these types of charges, it’s hard to see a strong defense," Nawaday said.
This article was provided by Bloomberg News.
