Source: https://www.lawfareblog.com/summary-manafort-and-gates-indicted-allegations-and-charges
Timestamp: 2019-12-15 19:26:42
Document Index: 204511558

Matched Legal Cases: ['§ 981', '§ 2461', '§ 371', '§ 1956', '§ 5314', '§ 2', '§ 5314', '§ 2', '§ 612', '§ 2', '§ 612', '§ 2', '§ 2']

Summary: Manafort and Gates Indicted, Allegations and Charges - Lawfare
By Sarah Grant, Shannon Togawa Mercer
Monday, October 30, 2017, 1:49 PM
This morning the District Court for the District of Columbia released a grand jury indictment against Paul J. Manafort, Jr., former Trump campaign manager, and Richard W. Gates III.
Below is a summary of allegations and charges. The following are the facts as alleged by the government, to which the defendants are entitled to the legal presumption of innocence.
Defendants Paul J. Manafort, Jr. and Richard W. Gates III served for years as political consultants and lobbyists. According to the indictment, between at least 2006 and 2015, Manafort and Gates allegedly acted as unregistered agents of the Government of Ukraine, the Party of Regions (a Ukrainian political party whose leader Victor Yanukovych was President from 2010 to 2014), Yanukovych, and the Opposition Bloc (a successor to the Party of Regions). Manafort and Gates generated tens of millions of dollars in income as a result of their Ukraine work. In order to hide Ukraine payments from United States authorities, Manafort and Gates laundered the money through 32 United States and foreign corporations, partnerships, and bank accounts opened by them and their accomplices in nominee names. They failed report millions of dollars in wire transfers from offshore accounts as income to Manafort personally; Davis Manafort Partners, Inc. (DMP), a political consultancy firm created in 2005; or DMP International, LLC (DMI), a firm created in 2011 to engage in political consulting, lobbying, and public relations in the United States for foreign clients, in particular the Government of Ukraine, the Party of Regions, and members of the Party of Regions.
In total, more than $75,000,000 flowed through offshore accounts. Manafort laundered more than $18,000,000, which he used to buy properties, goods, and services in the United States. He allegedly concealed that income from the United States Treasury, the Department of Justice, and others. Manafort, without reporting the income to his tax preparer or the United States, spent millions of dollars on luxury goods and services for himself and his extended family through payments wired from offshore nominee accounts to United States vendors. Manafort also used these offshore accounts to purchase multi-million dollar properties in the United States. Manafort then borrowed millions of dollars in loans using these properties as collateral, thereby obtaining cash in the United States without reporting and paying taxes on the income. In order to increase the amount of money he could access in the United States, Manafort defrauded the institutions that loaned money on these properties so that they would lend him more money at more favorable rates than he would otherwise be able to obtain.
Gates aided Manafort in obtaining money from these offshore accounts, which he was instrumental in opening. Gates also transferred more than $3,000,000 from the offshore accounts to other accounts that he controlled, to pay for his personal expenses, including his mortgage, children’s tuition, and interior decorating of his Virginia residence.
Pursuant to Federal Rule of Criminal Procedure 32.2, the United States will seek forfeiture as part of any sentence in accordance with 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1) and (a)(2), and 28 U.S.C. § 2461(c), in the event of convictions under Count 2 of the Indictment (Conspiracy to Launder Money). Upon conviction, Manafort and Gates shall forfeit to the United States any property, real or personal, involved in such offense, and any property traceable to such property. Upon conviction of the offenses charged in Counts 10 and 11 (Unregistered Agent of a Foreign Principal, False and Misleading FARA Statements), Manafort and Gates shall forfeit any property, real or personal, which constitutes or is derived from proceeds traceable to the offense of conviction.
Count 1: Conspiracy Against the United States – 18 U.S.C § 371
The indictment specifies that from around 2006 to 2017, Manfort and Gates “knowingly and intentionally conspired to defraud the United States by impeding, impairing, obstructing, and defeating the lawful governmental functions” of the Department of Justice and the Department of the Treasury, in reference to counts 3 through 6 and 10 through 12 – with count 11 committed in furtherance of the conspiracy.
Count 2: Conspiracy to Launder Money – 18 U.S.C § 1956 (h)
The second count outlines conspiracies to launder money occurring around or between 2006 and 2016, including the knowing and intentional conspiracy to “transport, transmit, and transfer monetary instruments and funds” through the U.S., from the U.S., and through places outside of the U.S. with the intention to carry out unlawful activity, specifically a felony violation of the Foreign Agents Registration Act (FARA), in violation of Title 22 sections 612 and 618, and Title 18 section 1956(a)(2)(A); and conducting financial transactions in violation of the Internal Revenue Code sections 7201 and 7206 and Title 18 section 1956(a)(1)(A)(ii) and 1956(a)(1)(B)(i). In order to use the money in the offshore accounts without paying taxes on it, Manafort and Gates made over $21,000,000 in wire transfers between 2008 and 2014 from these accounts in exchange for goods, services, and real estates. They did not report these transfers as income.
Counts 3-6: Manafort’s Failure to File Reports of Foreign Bank and Financial Accounts for Calendar Years 2011-2014 – 31 U.S.C §§ 5314 and 5322(b); 18 U.S.C. § 2
Counts 7-9: Gates’ Failure to File Reports of Foreign Bank and Financial Accounts for Calendar Years 2011-2013 – 31 U.S.C §§ 5314 and 5322(b); 18 U.S.C. § 2
Counts 3 through 9 address Manafort’s and Gates’s repeated failures to file Department of the Treasury Reports of Foreign Banks and Financial Accounts (FinCEN Form 114 or FBAR). The FBAR report requires those who are subject to U.S. jurisdiction to disclose financial interests in or authority over financial accounts in a foreign country should those accounts have an aggregate value of $10,000 or more. These counts allege that Manafort and Gates failed to file FBAR reports--for four and three consecutive years respectively-- while violating “another law of the United States and as part of a pattern of illegal activity involving more than $100,000 in a 12-month period.”
Count 10: Unregistered Agent of a Foreign Principal – 22 U.S.C. §§ 612 and 618(a)(1); 18 U.S.C. § 2
Here, the indictment alleges that both Manafort and Gates knowingly and willfully acted as agents of the Government of Ukraine, the Party of Regions and Yanukovych, without registering with the Attorney General. Pursuant to the Foreign Agents Registration Act (FARA). Any person who engages in lobbying or public relations work in the United States for a foreign principal is required to provide a detailed written registration statement to the United States Department of Justice.
From approximately 2006 until 2014, Manafort and Gates engaged in a multi-million dollar lobbying campaign in the United States at the direction of Yanukovych, the Party of Regions, and the Government of Ukraine. At the direction of Manafort and Gates, two Washington, DC firms engaged in extensive lobbying. Among other things, they lobbied multiple Members of Congress and their staffs about Ukraine sanctions, the validity of Ukraine elections, and the propriety of Yanukovych’s imprisoning his presidential rival, Yulia Tymoshenko. Manafort and Gates also lobbied in connection with the roll out of a report concerning the Tymoshenko trial commissioned by the Government of Ukraine. Manafort and Gates used one of their offshore accounts to funnel $4 million to pay secretly for the report. Manafort and Gates were required by law to report to the United States their work and fees on behalf of the Government of Ukraine, the President of Ukraine, and Ukrainian political parties, but did not do so.
Count 11: False and Misleading FARA Statements – 22 U.S.C. § 612 and 618(a)(2); 18 U.S.C. § 2
This count draws on Manafort’s and Gates’s FARA filings, highlighting allegedly false statements and omissions of material fact made between Nov. 23, 2016 and Feb. 10, 2017. In June 2017, Manafort retroactively filed FARA registration forms declaring $17.1 million in receipts to DMI.
Count 12: False Statements – 18 U.S.C. §§ 2 and 1001(a)
The last count of the indictment alleges that both Manafort and Gates caused another to “falsify, conceal, and cover up” a material fact, to make materially “false, fictitious, and fraudulent” statements, and to make and use the FARA documents submitted to the Department of Justice – to which count 11 referred– while knowing that they contained materially false, fictitious, and statements.