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The Real Deal Los Angeles

Paul Manafort is likely to lose his LA real estate at a $4M loss

Former Tr**p campaign chairman faces bankruptcy court and yet another money-laundering probe
October 25, 2017 01:00PM

Paul Manafort (Credit: Getty Images)

One day before reports emerged that he is facing another money laundering probe, former Tr**p campaign chairman Paul Manafort was dealt a separate blow in bankruptcy court.

Manafort and his family stand to lose the more than $4 million they invested in Los Angeles real estate, Bloomberg reported.

“Paul will likely lose his entire investment in these properties, if they go to auction and he is not the high bidder,” said Manafort’s attorney, Matthew Browndorf.

After a Monday hearing, Browndorf said his client couldn’t put together financing in time to save the developments, which the judge scheduled to be sold at a Dec. 13 auction.

Between 2014 and 2016, Manafort and his family lent money to four LLC’s run by Jeffrey Yohai, a spec house developer and the ex-husband of Manafort’s daughter Jessica. Yohai filed for bankruptcy protection for the entities last year, and the F.B.I. began examining the transactions — after Yohai was accused in a lawsuit of defrauding investors.

Manafort had contributed $2.7 million to a home at 779 Stradella Road in Bel Air, which a Yohai-controlled LLC purchased for $8.5 million, records show. The other properties involved in the bankruptcy proceedings are 1550 Blue Jay Way in the Bird Streets and 2541 and 2521 Nottingham Avenue near Griffith Park.

Yohai was planned to build a $30 million spec mansion on the site of the Blue Jay Way home, which he acquired for $7.5 million, according to court records. The actor Dustin Hoffman and his son invested $3 million in that project, the Los Angeles Times reported.

The real estate saga pales in comparison to Manafort’s larger struggles. The Wall Street Journal reported Tuesday that the Manhattan U.S. attorney’s office is investigating possible money laundering by Manafort. The investigation is being conducted in collaboration with a probe by special counsel Robert Mueller into allegations of collusion between Russia and Tr**p campaign officials to influence the 2016 presidential election. [Bloomberg] – Hannah Miet