- The Washington Times - Tuesday, July 31, 2018

Former Trump campaign Chairman Paul Manafort’s lawyers argued Tuesday that he was duped by Rick Gates, saying the former business partner and fellow campaign figure falsified documents to mislead Mr. Manafort and his accountants into bank and tax fraud.

The lawyers previewed their defense during opening arguments in Mr. Manafort’s trial at a U.S. District Court in Alexandria, Virginia, — one of two federal cases the former Trump campaign chief faces for how he ran his vast consulting practice.

Earlier in the day, the court selected a jury of six men and six women to hear the case, marking the first time one of special counsel Robert Mueller’s indictments has reached a courtroom.

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Mr. Manafort faces 18 counts of bank and tax fraud.

His lawyers made clear they think the case hinges on the testimony of Gates, who already has pleaded guilty to lying to the government in exchange for his cooperation.

“Mr. Gates pled guilty to lying to the government among other crimes, and this is the person the government wants you to trust,” said Manafort lawyer Thomas Zehnle.

He said Mr. Manafort’s mistake was to trust Gates, whom the Manafort team will blame for forging documents that led to the fraud the government alleges.

“He had his hand in the cookie jar,” Mr. Zehnle said of Gates.

Prosecutors, in their opening statements, laid out the lavish lifestyle they said Mr. Manafort lived while siphoning money among various accounts — including a $15,000 suit they said was made entirely of ostrich feathers.

Other expenses included several homes, a $105,000 car, a $21,000 watch and New York Yankees season tickets, prosecutors said.

Uzo Asonye, a government attorney, characterized Mr. Manafort as a shrewd liar who misled his accountants, bookkeeper and the IRS about his financial dealings. He said Mr. Manafort “created cash out of thin air” by falsifying financial documents to obtain fraudulent bank loans and cheat the IRS.

Mr. Asonye also said Mr. Manafort was the mastermind behind the alleged financial fraud, ordering associates and employees to create phony financial statements.

“None of this happened accidentally,” he said. “Shell companies did not create themselves, neither do false bank statements.”

Tad Devine, a political operative who served as Sen. Bernard Sanders’ chief strategist during the 2016 election, was the first witness. He detailed his political work with Mr. Manafort to elect Viktor Yanukovych as president of Ukraine.

Prosecutors allege that Mr. Manafort failed to report the income he earned lobbying on behalf of Mr. Yanukovych and other Ukrainian politicians. They say he eared more than $60 million for his work, only telling the IRS about a portion of that income and stashing the rest in off-shore bank accounts.

Mr. Devine said the money for the Yankukovych campaign came from Ukrainian businessman Rinat Akhmetov, whom he described as an oligarch. He added that Mr. Akhmetov and Mr. Manafort knew each other well.

The Alexandria trial is one of two prosecutions Mr. Manafort faces. He’s also going to trial in Washington, D.C., over charges of failing to disclose activities on behalf of a foreign government.

He had his bail revoked and was ordered to remain in custody by the judge in the Washington case after potential witnesses said they felt he had tried to coach them on their stories.

In the Virginia trial, Mr. Manafort’s lawyers had asked U.S. District Judge T.S. Ellis III to throw out some of the exhibits the government has said it may use. Judge Ellis declined to make a ruling, but did lay out several principles he wanted to make sure the government evidence adheres to, including strict standards for relevance to the case.

“I hope you will take these principles back, apply them vigorously and reduce them,” he said of the exhibit list.

Mr. Manafort’s work as a Ukrainian political operative occurred nearly a decade before he took over the Trump campaign in mid-2016. He organized the Republican convention in July 2016, but quit the Trump team one month later.

Prosecutors have said they will not present evidence of Russian collusion during Mr. Manafort’s trial, but have claimed the authority to prosecute him under a May 2017 order by Deputy Attorney Rod Rosenstein.

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