Special Counsel Robert Mueller released the first indictments in the Trump-Russian collusion investigation on Monday, and those charges went to former campaign manager Paul Manafort.
The 12-count indictment alleges a scheme by Manafort and his business associate Rick Gates to evade taxes on millions of dollars they earned as lobbyists and consultants for Ukrainian officials. And much of that money, documents filed in the indictment show, went into New York real estate.
From 2006 to 2016, Manafort and Gates wired more than $21 million into the United States from offshore accounts, all income on which they paid no federal income tax, according to the indictment.
Manafort and Gates, through a series of Cyprus and Grenadines-based accounts, wired more than $5.4 million to an unnamed home improvement company in the Hamptons. Another $656,000 was wired to a separate landscaping business, also in the Hamptons.
Then there are the two New York City homes Manafort bought using offshore accounts. One, a brownstone at 377 Union Street in Brooklyn, is currently the subject of a separate money laundering investigation in New York State and the other is a condominium at 29 Howard Street in Soho. The wires for those purchases totaled $4.5 million were also allegedly not reported on Manafort’s tax return.
In 2015 and 2016, however, Manafort rented out his 29 Howard Street apartment on Airbnb and “took advantage of the beneficial tax consequences of owning this rental property,” according to the special counsel’s filing.
At the Union Street townhouse, Manafort is alleged to have fraudulently used funds from “construction loans” he obtained in order to renovate the property, taking hundreds of thousands of dollars from the $5 million debt to make a down payment on a property in California. He also wrote his accountant, explaining that the loans would allow him to pay off one of his other existing mortgages “in full,” the indictment says.
On Monday, the Daily Beast reported that Manafort has accelerated renovation work in just the last two weeks, in what was perhaps an attempt to show that money was being spent on construction at 377 Union Street. Department of Buildings records show Manafort obtained a permit for plumbing work on October 24.
The real estate deals help lay out a scheme that prosecutors say helped hide foreign bank accounts, launder money for illegal purposes and mislead federal officials about the nature of Manafort and Gates’ consulting work for president Viktor Yanukovych and the pro-Russian Party of Regions.
If Manafort and Gates are convicted, they would be forced to surrender the properties involved in the alleged scheme, which also include homes in Arlington, Virginia and Long Island.
The indictment did not include any of the business dealings Manafort had with the Ukranian oligarch Dmitry Firtash when Manafort, along with Brad Zackson and Arthur Cohen, attempted and failed to redevelop the Drake Hotel in Manhattan a decade ago. A 2012 civil suit alleged that the real estate deal was a money laundering scheme intended to fund the ouster of then-Ukranian prime minister Yulia Tymoshenko.
Monday’s indictment also does not include allegations of collusion with foreign officials for the purposes of aiding President Trump’s presidential campaign.
To see the full indictment, click here.