ALEXANDRIA, Va. (Reuters) – An accountant who prepared tax returns for U.S. President Donald Trump’s one-time election campaign chairman Paul Manafort resumes trial testimony on Friday, after saying the day before that Manafort never told him that he had foreign bank accounts.
FILE PHOTO: Former Trump campaign manager Paul Manafort arrives for arraignment on a third superseding indictment against him by Special Counsel Robert Mueller on charges of witness tampering, at U.S. District Court in Washington, U.S., June 15, 2018. REUTERS/Jonathan Ernst
Prosecutors are expected to present to a jury detailed financial evidence they say proves Manafort hid from U.S. tax authorities millions of dollars of income he earned working for pro-Russian politicians in Ukraine and lied to banks to get loans.
Philip Ayliff, an accountant with KWC, told jurors on Thursday, the first day of his testimony, the lack of accurate information would lead to an incorrect tax return. It was an issue he paid close attention to since 2010 when the U.S. Treasury Department ramped up its enforcement of a law requiring U.S. disclosure by U.S. citizens of their overseas bank accounts, Ayliff said.
The government is expected to finish questioning him on Friday, before calling its next witness in the trial, which began on Tuesday in federal court in Alexandria, Virginia.
Manafort, 69, is charged with bank fraud, tax fraud and failing to disclose foreign bank accounts. He has pleaded not guilty to all charges and his trial is the first arising from Special Counsel Robert Mueller’s investigation of Russia’s role in the 2016 U.S. election.
The charges largely pre-date the five months Manafort worked for Trump, some of them as campaign chairman, during a pivotal period in the race for the White House.
Jurors on Thursday primarily heard testimony about the nitty gritty of Manafort’s business and personal finances, a shift from earlier in the week when prosecutors focused more on the details of his lavish spending on Land Rovers, ostrich jackets, designer suits and real estate.
Testimony also came from 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 Manafort and his former business partner Rick Gates to various banks that contained profit and loss statements for Manafort’s consulting firm.
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.
Late on Thursday, Manafort filed an objection to the government’s bid to block his legal team from raising the fact that he and his companies were never audited by the Internal Revenue Service. Mueller’s team has argued such any civil action is separate from the criminal charges at hand.
Reporting by Sarah N. Lynch and Nathan Layne in Alexandria, Virginia; additional reporting by Susan Heavey; editing by Steve Orlofsky