Banker recalls red flags on former Trump campaign chairman's loan application

Frederick Owens
August 17, 2018

Federal Savings Bank's vice president testified Monday that the bank's CEO pushed through $16 million in loans to former Trump campaign manager Paul Manafort, pictured, despite concerns about Manafort's ability to pay back his debts.

The government says Manafort hid around $16 million United States in income from the IRS between 2010 and 2014 by disguising money he earned advising politicians in Ukraine as loans and hiding it in foreign banks.

A bank executive said he found several red flags with Paul Manafort's finances while the former Trump campaign chairman was being considered for $16.5 million in bank loans. Gates was also forced to admit embezzling a fortune from Manafort and having an extramarital affair. As the prosecution case neared its end, defense lawyers said they meant to argue that Manafort did not own enough of his company to require him to disclose such accounts.

Closing arguments are scheduled to begin Wednesday morning in the trial of former Trump campaign chairman Paul Manafort.

Westling also asked Brennan if it's acceptable for the borrower to create his or her own profit and loss statement for a loan application, a reference to prosecutors' allegation that Manafort improperly inflated his income in his loan applications. The prosecution is expected to rest its case in the fraud trial. Despite the doubts about Manafort's abilities to repay them, the loans "closed because Mr. Calk wanted them to close", Brennan said. One such name in this email is Stephen Calk, one of the owners of the Federal Savings Bank, which Manafort is accused of conspiring with to defraud.

Manafort has pleaded not guilty to 18 counts of tax and banking crimes in the first major trial of special counsel Robert Mueller's investigation into Russian interference in the 2016 presidential election.

Federal Savings Bank has not returned calls seeking comment, and has said it will make no comment during Manafort's trial. He says he also found several "inconsistencies" in the amount of income Manafort reported for his business.

The prosecution has introduced a trove of documentary evidence as it sought to prove Manafort defrauded banks and concealed millions of dollars in offshore bank accounts from the IRS.

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That information led senior executives to reject one of the loans.

Prosecutors tied up the loose ends of their case on Monday, calling the last banker to testify and asking a financial fraud federal agent to return to the witness box. The defense has tried to blame Manafort's financial mistakes on his former assistant, Richard Gates.

While the contents of the motion are unknown, the development comes after an unexplained delay in the trial and unusually detailed instructions by Ellis to the jurors on Friday, in which he pressed them not to talk to anyone about the case.

By that time, according to investigators, the millions of dollars Manafort had been making every year as a political consultant in Ukraine had dried up.

Ellis made this clear during his brief conversation with Manafort. The judge left the courtroom that day and later admonished jurors repeatedly to not discuss the case.

Judge TS Ellis said he would talk to Manafort on Tuesday about whether he wanted to take the stand, something that legal experts say is highly unlikely.

Brennan, asked about whether the bank made money from lending to Manafort, said the bank has written off the loans and "took a hit" of $11.8 million.

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