The Real Deal New York

Judge tosses fraud suit against Manafort’s son-in-law over technicality

Now the fight is heading to state court
By Konrad Putzier | July 27, 2017 06:00PM

Guy Aroch and Paul Manafort (Credit: Getty Images)

Former Trump campaign chair Paul Manafort’s son-in-law Jeffrey Yohai just won some precious time in his fight against fraud charges. On Wednesday, a federal judge dismissed an investor’s lawsuit over a technicality.

The plaintiff, New York photographer Guy Aroch, had sued in federal court in November, alleging he invested $2.9 million in Yohai’s real estate projects but never got any money back. Instead, Aroch alleged, Yohai used the money for “personal travel; lavish purchases; and/or speculative ventures outside the investment mandates.”

Yohai filed a motion to dismiss the suit, arguing that because both parties live in New York the matter should be brought to a state court. A judge granted the motion on Wednesday. Aroch’s attorney, who declined to comment, promptly refiled the suit in state court.

Yohai’s legal troubles made headlines because Manafort, who ran President Trump’s campaign until resigning in late August, invested millions with his son-in-law. In June, the New York Times reported that the FBI is investigating Manafort over mortgages he took out in part to fund his investments. He reportedly borrowed $16 million against two New York properties and a Virginia home from a small Chicago bank, whose head personally knew Manafort and was trying to land a job in the Trump administration.

Yohai’s business bought luxury homes in California with an eye toward redeveloping them. His investors include actor Dustin Hoffman and his son Jake, who shelled out $3 million for a Los Angeles project that ended up in bankruptcy.