Ex-Trump campaign chair Paul Manafort pleads not guilty to mortgage fraud charges

Paul Manafort, the imprisoned former chairman of U.S. President Donald Trump's 2016 election campaign, pleaded not guilty on Thursday to New York state mortgage fraud charges that could keep him locked up even if Trump pardons him for federal crimes uncovered during the probe of Russian election meddling.

Handcuffed and dressed in blue prison garb, the 70-year-old Manafort entered a Manhattan courtroom, walking with a slight limp, as someone shouted "traitor" from the hallway.

"Not guilty," he told Justice Maxwell Wiley of the New York State Supreme Court at his arraignment on the 16-felony-count indictment announced in March by Manhattan district attorney Cyrus Vance.

The latest charges include mortgage fraud, conspiracy and falsifying records related to Manafort's efforts to obtain millions of dollars in loans on properties in New York and elsewhere between 2015 and 2017.

Manafort had been transferred last week to a federal detention centre in New York for his arraignment in the state case. He remained seated as he entered his plea and had to be helped out of his chair when taken out of the courtroom. He used a wheelchair at his last federal sentencing in March because of gout.

Manafort worked for Trump's presidential campaign for five months until August 2016, including a stint as chairman.

Double jeopardy battle

Todd Blanche, Manafort's lawyer, said he planned to seek a dismissal of the indictment on double jeopardy grounds.

"In our views, the laws of New York do not allow the people to do what they did in this case," Blanche told reporters after his client's arraignment.

The charges against Manafort centre on mortgage applications to three banks involving properties in Manhattan, Brooklyn, the Hamptons and California, according to a filing by prosecutors on Thursday. The loans were also largely at issue in Manafort's trial in federal court in Virginia last year.

Under New York law, a person can be prosecuted twice for the same act only in specific circumstances, including when at least one element of the crimes is distinct and the statutes address "very different kinds of harm or evil." 

Vance's office will likely argue an exception to New York's double jeopardy protections is warranted in Manafort's case.

The filing also suggested Vance's office plans to use Manafort's admissions that he made misrepresentations in mortgage applications in New York. The admissions were part of a plea agreement with special counsel Robert Mueller last September.

Manafort was later found to have breached that plea deal and is currently serving a 7½-year sentence for tax fraud, bank fraud and other charges stemming from Mueller's probe into Russia's meddling in the 2016 presidential election.

Mueller's prosecutors accused him of hiding $16 million US from American tax authorities that he earned as a consultant for pro-Russian politicians in Ukraine, and then lying to banks to obtain loans to maintain a luxurious lifestyle.

Wiley scheduled Manafort's next court appearance for Oct. 9. Manafort will remain in federal custody.

Presidential pardon a possibility

The New York charges are widely viewed as an attempt to ensure that Manafort serves significant prison time even if Trump pardons him, which the president has not ruled out. Trump can pardon people for federal crimes, but not state crimes.

Manafort faces up to 25 years in prison in New York on the top state charges.

The New York case has attracted the attention of the U.S. Department of Justice, which this month decided to keep Manafort in federal custody because of concern for his health and safety. That intervention, which legal experts said was unusual and raised concerns of special treatment, ensured that Manafort would not move to New York's Rikers Island jail pending trial.

Manafort was moved to a federal facility in Manhattan on June 13, after having been housed at a low-security federal prison in Pennsylvania.