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Manafort convicted on 8 counts; mistrial declared on 10 others

Paul Manafort, former campaign manager for Donald Trump, exits from federal court in Washington on April 19, 2018. MUST CREDIT: Bloomberg photo by Al Drago

ALEXANDRIA, Va. - A jury found former Trump campaign chairman Paul Manafort guilty Tuesday on tax and bank fraud charges - a major if not complete victory for special counsel Robert Mueller III as he continues to investigate the president's associates.

The jury convicted Manafort on eight of the 18 counts against him and said it was deadlocked on the other 10. U.S. District Court Judge T.S. Ellis declared a mistrial on those charges.

Wearing a black suit, Manafort stood impassively, his hands folded in front of him, and showed little reaction as the clerk read the word "guilty" eight separate times. As through most of the three-week trial, Manafort showed no emotion as he looked at the six women and six men who convicted him.

President Donald Trump reacted to the verdict by denouncing Mueller's investigation.

"Paul Manafort's a good man," the president told reporters in West Virginia. The verdict, he said, "doesn't involve me but I still feel, you know, it's a very sad thing that happened."

He pointed out that the charges in Manafort's case did not involve Mueller's core mission of investigating Russian interference in the 2016 election and whether any Americans conspired with those efforts.

"This is a witch hunt that ends in disgrace," Trump said.

For Trump, the outcome of Manafort's trial was only half of a double-barreled blast of bad news Tuesday. Shortly after the verdict was read, the president's former longtime attorney Michael Cohen pleaded guilty in an unrelated case to eight crimes, saying that among other things, he helped arrange hush money payments at the direction of then-candidate Trump.

Manafort, 69, was found guilty of filing a false tax return in each of the years from 2010 through 2014, as well as not filing a form in 2012 to report a foreign bank account as required. He was also convicted of two instances of bank fraud, related to a $3.4 million loan from Citizens Bank and a $1 million loan from Banc of California.

The charges on which the jury deadlocked included three counts for not filing a form to report a foreign bank account, and seven counts for committing bank fraud or conspiring to commit bank fraud.

The judge thanked the jurors for their service and they were dismissed, leaving the courthouse without speaking to reporters. The judge has ordered their names not be disclosed in court records.

Cohen says he worked to silence two women 'in coordination' with Trump to influence 2016 election

Once the jury left the courtroom, Ellis asked Manafort to approach the lectern. The judge told him that he would order a pre-sentencing report and it was important for Manafort to "pay careful attention to the preparation of the document."

Manafort's wife declined to speak to reporters as she left the courthouse.

Lead defense attorney Kevin Downing said Manafort was "disappointed" in the verdict, though he also wanted to thank the judge "for giving him a fair trial," and the jurors for their deliberations.

Manafort's lawyers asked for 30 days to file a motion for a new trial or for the judge to toss out the verdict. Manafort "is evaluating all of this options at this point," Downing said.

His possible prison sentence wasn't immediately clear, but legal experts said he likely faces roughly seven to 10 years in prison under federal sentencing guidelines. Trump has repeatedly declined to discuss whether he might someday pardon Manafort.

The conviction, analysts say, might increase the pressure on Manafort to cooperate with Mueller in hopes of getting a sentencing break. "Now that he's seen how this goes, maybe he is now more likely to want to consider working out a plea deal," said Barbara McQuade, a former U.S. Attorney who observed much of the trial.

The verdict comes as Trump has stepped up his criticism of Mueller's investigation, publicly criticizing it on a weekly and sometimes daily basis. As the Manafort trial began, Trump called for the probe to be shut down immediately.

Manafort's guilty verdict may strengthen Mueller's hand as he continues to investigate possible conspiracy and seeks an interview with the president; an acquittal could have led to a broader effort by conservatives to shut down the special counsel's office.

The 18 charges in the Manafort trial centered around Manafort's personal finances, and had little to do with the special counsel's mandate of probing Russian interference in the 2016 election and whether any Trump associates conspired with those efforts.

But the trial was the first to emerge from Mueller's probe, and as such it marked a significant public test of his work. After four days of deliberations, the jury largely validated Mueller's decision to charge Manafort.

Over two weeks of testimony, more than two dozen witnesses, including his former right-hand man Rick Gates, as well as his former bookkeeper and accountants, testified against Manafort. They said he hid millions of dollars in foreign bank accounts that went unreported to the IRS, and then later lied to banks in order to get millions of dollars in loans.

His lawyers had argued that Gates, not Manafort, was the real criminal, pointing to Gates' admitted lies, theft, and marital infidelity, which he acknowledged during his testimony. Gates pleaded guilty in February to lying to the FBI and conspiring against the United States, and has said he hopes to get a lesser prison sentence by cooperating against Manafort.

Prosecutors, in turn, told the jury that the case's most compelling evidence included the dozens of documents, many of them emails, showing Manafort oversaw the false statements to the IRS and banks.

Manafort's defense team called no witnesses at all, as his lawyer argued prosecutors had failed to prove beyond a reasonable doubt that he intended to defraud the government or banks. Manafort's lawyers repeatedly suggested their client might not have known the law.

The trial featured heated arguments at times - not between the government and defense lawyers, but between the judge and prosecutors. The judge repeatedly chided Mueller's team in front of the jury, though at the end of the trial he urged the panel not to consider during its deliberations any opinions the judge may have expressed.

Manafort faces a second trial in September in Washington, District of Columbia, on charges he failed to register as a lobbyist for the Ukraine government, and conspired to tamper with witnesses in that case. Manafort has been in jail since June as a result of the witness tampering charges.

During closing arguments last week, Manafort's lawyers accused the special counsel's office of having gone on a fishing expedition to find evidence of financial crimes.

"Nobody came forward to say we're concerned about what we're seeing here. Not until the special counsel showed up and started asking questions," lawyer Richard Westling said, suggesting the special counsel "cobbled together" information to "stack up the counts" against Manafort and overwhelm the jury.

"It is not enough that wrong information or even false information was given," Westling said, telling jurors that to convict his client, they had to be convinced that Manafort intended to deceive banks and the IRS.

Prosecutors charged that Manafort failed to pay taxes on millions of dollars in overseas bank accounts which he kept hidden from his accountants and the IRS. He earned that money working as a consultant for Ukraine's then-president, Viktor Yanukovych. Yanukovych fled Ukraine in 2014 amid massive street protests, causing Manafort's income to dry up, according to witnesses.

Prosecutors called Manafort's bookkeeper and former accountants to testify against him. Those witnesses said Manafort misled them about foreign bank accounts he controlled. A former accountant for Manafort said she went along with falsifying information on Manafort's tax return to lower the amount he would have to pay.

Other witnesses included employees of luxury clothing stores, a landscaper, and a home entertainment company employee, all of whom testified to the big ticket purchases Manafort made - paid via wire transfers from foreign bank accounts.

Witnesses said Manafort spent a small fortune at the time he was cheating the IRS - more than $1 million on clothes, including a $15,000 ostrich jacket, more than $2 million on home entertainment systems, and millions of dollars on homes for himself and his family. One witness said Manafort spent hundreds of thousands of dollars on landscaping, including a bed of red flowers in the shape of an "M" in the backyard of his Hamptons home.

This article was written by Matt Zapotosky, Tom Jackman, Devlin Barrett and Lynh Bui, reporters for The Washington Post. Michael Brice-Saddler of The Washington Post contributed to this report.

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