Prosecutors shift focus to fraud charges in Manafort trial

After three days of dramatic and even salacious testimony in the trial of Paul Manafort, prosecutors on Thursday returned to the nuts and bolts of their case against the former Trump campaign chairman as they sought to show he obtained millions of dollars in bank loans under false pretences.

Attorneys for special counsel Robert Mueller also got a rare — and narrow — acknowledgment from U.S. District Judge T.S. Ellis III that he likely erred when he angrily confronted them a day earlier over whether he had allowed a witness to watch the trial.

The judge's comments and detailed testimony about Manafort's loans opened the eighth day of his trial as prosecutors began presenting the bulk of their bank fraud case against him after spending days largely on tax-evasion allegations.

On Thursday, a bank employee told jurors how she discovered discrepancies in the information he put on his loan application, including holes in his claims about a New York City property. Melinda James, a Citizens Bank mortgage loan assistant, testified that Manafort had told the bank that the property would be used as a second residence, but she found it listed as a rental on a real estate website.

In another instance, James said Manafort maintained that there were no mortgages on a separate New York property when there actually were. All the while, Manafort signed paperwork indicating he understood that he could face criminal or civil penalties if he lied to the bank.

Airbnb executive Darin Evenson also told jurors that one of Manafort's New York City properties was offered as a rental through much of 2015 and 2016 — a direct contradiction of the documents the longtime political consultant submitted to obtain a $3.4 million US loan. Another bank employee said the distinction matters because the bank caps loans for rentals at $1 million.

The prosecution has put forward nearly 20 witnesses — including Manafort's longtime deputy Rick Gates — and a trove of documentary evidence as they've sought to prove Manafort defrauded banks and concealed millions of dollars in offshore bank accounts from the IRS. But along the way they've not only faced an aggressive defence team, but a combative relationship with Ellis.

'Put aside my criticism'

The judge has subjected the prosecution to repeated tongue-lashings over the pace of their questioning, their massive amount of trial exhibits and even their facial expressions. But on Thursday, Ellis told jurors he went overboard when he erupted on prosecutors for allowing an expert witness to remain in the courtroom during the trial.

"Put aside my criticism," Ellis said. "This robe doesn't make me anything other than human."

The judge's comments were in response to a written filing by prosecutors arguing that Ellis should instruct the jury that he made an error in admonishing them during the Wednesday testimony of IRS agent Michael Welch.

Ellis had heatedly confronted prosecutor Uzo Asonye, saying he hadn't authorized Welch to watch the entirety of the trial. Witnesses are usually excluded from watching unless allowed by the judge.

But in their filing, prosecutors attached a transcript showing that in fact Ellis had approved the request a week before. They said his outburst prejudiced the jury by suggesting they had acted improperly and could undermine Welch's testimony.

Welch had told jurors that Manafort didn't report at least $16 million on his tax returns between 2010 and 2014. He also said Manafort should have reported multiple foreign bank accounts to the IRS in those years.

Prosecutors had asked Ellis to instruct the jury that they hadn't done anything improper in an attempt to repair any unfair prejudice.

Ellis has repeatedly tussled with prosecutors, interrupting them and pressuring them to hurry through their case even during a dramatic three days in which Gates, Manafort's protegé, implicated his former boss in a years-long financial scheme.

Courtroom showdown

Gates, the government's star witness in Manafort's financial fraud trial, testified how, at the behest of his longtime boss, he helped conceal millions of dollars in foreign income and submitted fake mortgage and tax documents.

Defence lawyers have painted Gates as a liar, embezzler and philanderer, getting him to acknowledge an extramarital affair and reminding jurors how he falsified hundreds of thousands of dollars in expense reports.

The testimony, stretching across three days, created an extraordinary courtroom showdown between the two former Trump campaign aides who were indicted together. Manafort opted for trial, while Gates pleaded guilty and agreed to testify against his former boss.

Neither man was charged in connection with their Trump campaign work, but the trial has nonetheless been closely watched by a president who insists Manafort was treated shabbily and who continues to fume publicly about Mueller's investigation into potential ties between his associates and the Kremlin.