aggiehawg said:

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So is he raising money for a criminal defense or a wrongful termination civil suit?

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The last prosecution witness

Still finding hard to justify 300 yrs in prison based on this. How many loans were bailed out with TARP money that the banks lied on paper about?

2:30 p.m.: Banker says Manafort omitted two NY mortgages when applying for $16 million in loans


Jim Brennan, a vice president at Federal Savings Bank, also testified Monday that Paul Manafort didn't declare on his financial applications that he had mortgages on two properties in New York, information that would have made it harder for him to secure a loan.

Manafort was approved for one loan with Federal Savings Bank, but rejected it at the signing table, Brennan testified. Manafort laid out new terms for the loan. The president of the bank, Javier Ubarri, rejected the new proposed loan structure, but the loan closed anyway, Brennan said.

"It closed because Mr. Calk wanted it to close," Brennan said referring to Federal Savings Bank CEO Steve Calk.

2:55 p.m.: Defense suggests Manafort didn't fill out loan applications, and terms of loan (7.25% interest) weren't great

Defense attorneys for Paul Manafort are again trying to argue that their client either wasn't the one who filled out documents inaccurately when applying for loans or else did not know he had done anything wrong.

Asking about a profit-and-loss statement showing Manafort's firm made $4.4 million in 2015, Richard Westling asked Federal Savings Bank vice president Jim Brennan if any one person must prepare such documents or whether there's anything wrong with updating such statements as necessary.

Brennan agreed that anyone at the company could update such documents if needed. But multiple witnesses have testified that Manafort's firm made less than $400,000 in 2015, and that there was no reason to believe more money would be coming in when that document was sent to Federal Savings Bank in 2016.

Westling went on to suggest that the loan was hardly a favorable one, given that Manafort put up two properties as collateral, a $12 million house in the Hamptons and a $2.7 million condo in Alexandria, as well as $615,000 cash. The interest rate was 7.25 percent, and Manafort had to pay a $285,000 fee.

Brennan said that for the size and type of loan, all the terms were standard, and the properties would not guarantee repayment.

"If the bank had to foreclose, it's always a question whether we'll get our money back," he said.

He confirmed that, in fact, the loans to Manafort are still outstanding.

Westling referred to the fact that Manafort did not have income in 2016, asking Brennan to confirm that he knew Manafort had taken a "voluntary position." That referred to Manafort's unpaid role in Trump's 2016 presidential campaign. Brennan acknowledged he was aware of that.

Brennan said that he was aware that Manafort's American Express bill had a $300,000 outstanding debt, the bulk of which was for Yankees season tickets, had been paid off by the time both loans were approved, and his credit score had improved. Brennan said at that point Manafort had "acceptable" credit.

Westling also raised the possibility that Manafort, who was doing real estate business with his son-in-law, did not fill out the loan applications himself, although they were signed with his name. He also suggested Manafort was unaware that he had to report outstanding debts that were not his alone.

Brennan pointed out that the bank's loan application form makes clear the debts include "loan guarantees" and "financial obligations," not just loans to the borrower alone.

Sasappis said:

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RoscoePColtrane said:

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Still finding hard to justify 300 yrs in prison based on this. How many loans were bailed out with TARP money that the banks lied on paper about?

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They are seeking 300 years in prison based on this single loan?

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Frankly, A) using the max sentencing guidelines is lazy journalism but that is the oft-reported number; B) I've lost track of exactly which loans he did or didn't obtain but it was still an "attempt" and thus "conspiracy."

Things have gotten muddled during trial.

4:21 p.m.: Bank VP says he wouldn't have approved Manafort loans if bank CEO hadn't pushed for it

During cross-examination of Federal Savings Bank vice president Jim Brennan, defense attorney Richard Westling raised the possibility that the bank may have been at fault for errors that affected Manafort's loans.

Westling pointed to an incorrect address Brennan had entered in one application and made mention of another error by another employee that "made Mr. Manafort's income look better."

Westling also asked Brennan about a review of one Manafort loan conducted by a regulatory body called the Office of the Comptroller of Currency. During a review of the bank's business, the bureau within the U.S. Department of Treasury had concerns about how the loan was analyzed, but didn't raise any flags about information provided by Manafort.

Brennan testified that one of the loans received a rating of 4 the lowest possible rating an application could get before it would be rejected. Brennan said he would not have approved the loan and it would have gone on the bank's "watch list," but he didn't have a choice to give the loan the bare minimum rating. When asked by the judge why he gave the loan a passing grade if it didn't deserve it, Brennan testified that Calk had pushed for it.

The two loans of $16 million combined represent the largest loans the bank had ever issued up to that point in time, Brennan testified.

Brennan testified that he told the FBI in June 2017 the loans were performing. But he said that by Dec. 31 of that year they had been written off and the bank had lost $11.8 million. As of now, none of the collateral Manafort provided has been seized by the bank, Brennan testified.

Westling pointed out that it wasn't a secret that Manafort wouldn't have any reported income in 2016. It was understood and "out in the open" that Manafort was working for free for then-candidate Donald Trump. Westling also pointed to a bank document that calculated Manafort's estimated net worth to be nearly $21.3 million when the loans were issued, which the defense could leverage to show that Manafort had the ability to pay back the loans.

Brennan concluded his testimony shortly before 4 p.m.

4:39 p.m.: Judge spars with prosecutors again, says 'You could have indicted the company, but you didn't'

Whether or not Paul Manafort's prosecutors are done with the case depends on how Judge T.S. Ellis III rules about whether an agent from the Treasury Department can retake the stand.

Paula Liss already testified that Manafort did not report foreign bank accounts on his taxes. Prosecutors want her to come back and say his consulting firm didn't either.

Defense attorney Thomas Zehnle said that in closing arguments, they do plan to say Manafort had no obligation to report foreign bank accounts in the years he only owned 50 percent of his firm, Davis Manafort International.

"It's very clear that if you do not own more than 50 percent of the entity, you do not have a responsibility," Zehnle said.

Manafort's wife owns the other half of the company and they file joint tax returns.

He is accused of failing to report the foreign bank accounts from 2011 to 2014. For one year charged, 2011, Manafort was the firm's sole owner.

When Manafort filed as a foreign agent in 2017, prosecutor Uzo Asonye noted, he also described himself as owning 100 percent of the business.

Ellis pointed out that Davis Manafort Partners, later Davis Manafort International, was not accused. "You could have indicted the company, but you didn't," he said.

Asonye said that was true, but it was the defense that was now making the argument that this was a corporate responsibility.

Ellis took a short recess to decide the issue, predicting neither side would like his ruling.


5:01 p.m.: Special counsel's final witness is return of Treasury agent

Judge T.S. Ellis III allowed prosecutors to call back Paula Liss, a special agent with the Treasury Department's Financial Crimes Enforcement Network. The special counsel confirmed that she would be their last witness.

Prosecutors intend to ask Liss if Paul Manafort's consulting firm ever reported foreign bank accounts. Ellis said he would instruct the jury that they cannot find Manafort guilty for his company's failures, but that they can use the evidence to decide his "willfulness" in not reporting 32 overseas accounts on his personal tax returns.

After Liss answers three questions from prosecutors and any cross-examination from the defense, Ellis said he will hear motions to acquit.

5:04 p.m.: The prosecution rests after recalling Treasury agent as final witness


The special counsel's office has called its final witness in its case in chief against Paul Manafort.

The special counsel's last witness was Paula Liss, a special agent with the Treasury Department's Financial Crimes Enforcement Network. Liss had testified early in the trial but was called back to be questioned about whether Manafort's companies had reported any foreign bank accounts between 2011 to 2014. Liss said the department had no record of any such "FBAR" reports.

Liss left the stand after five questions.

"Your honor, the government rests," prosecutor Greg Andres said.

Afterward, defense attorneys, in a procedural hearing, asked that the charges against Manafort be dismissed, saying the evidence lacks "materiality" and "a failure to show the necessary willfulness."

Judge T.S. Ellis III sealed the courtroom without ruling on the defendant's motion for acquittal or asking whether Manafort will present any evidence.

"What we do will not be permanently sealed," he told media and onlookers gathered in the courtroom. "When the case is over, the seal will be lifted."

Lead defense attorney Kevin Downing asked to have until tomorrow morning to put together his motion for acquittal, and Ellis agreed.

aggiehawg said:

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Sasappis said:

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RoscoePColtrane said:

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Still finding hard to justify 300 yrs in prison based on this. How many loans were bailed out with TARP money that the banks lied on paper about?

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They are seeking 300 years in prison based on this single loan?

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Frankly, A) using the max sentencing guidelines is lazy journalism but that is the oft-reported number; B) I've lost track of exactly which loans he did or didn't obtain but it was still an "attempt" and thus "conspiracy."

Things have gotten muddled during trial.

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Best I can account for is he received 3 loans all secured with collateral, all approved by the banks. Hard to tell how many loans were attempted outside the two they mentioned since Judge Ellis chopped them off at the knees on talking about attempted loans that were denied. But they mentioned two I think unless they were talking about the same loan twice, it's hard to tell.

Lots of doubt on some of the applications, different signatures, handwriting, what have you.

Gates admitting he was embezzling Manafort. Admitting he lied about income and falsified invoices. Admitting he lied to bookkeepers and tax preparers.

Ultimately Manafort is responsible for his taxes, he's guilty of that, but all these loans that are in question have a lot of blame to go around. Bank Prez wanting an appointment in the WH, it sounds like they were aware of a lot of the things and approved the loans anyway.

Looking at the interest rates he was given and the $285K processing fees he was charged plus the the collateral and cash down payments is not a real sweetheart deal, just having a hard time seeing where the victim is in all of this, since the loans are still active, none are defaulted yet, and the prosecution is screaming this huge conspiracy to commit bank fraud. To date there are no losses yet.

Those are all good jury arguments that may win for Manafort with the jury on bank fraud

However, legally no "victim" is needed under the statute. The jury may nullify & let him walk on that because I think lots of people will say "no harm, so what?"

Quote:

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The two loans of $16 million combined represent the largest loans the bank had ever issued up to that point in time, Brennan testified.

Brennan testified that he told the FBI in June 2017 the loans were performing. But he said that by Dec. 31 of that year they had been written off and the bank had lost $11.8 million. As of now, none of the collateral Manafort provided has been seized by the bank, Brennan testified.

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A bank doesn't write off loans that size when they have collateral. They just don't. Unless they were in a subordinate position and would have to pay-off a prior lien, which the title search would have revealed.

I understand that Calk, Brennan's boss is some sort of social climber but that isn't Manafort's fault. The bank did not follow sound underwriting practices nor recovery practices here. That's just odd to me.

WTH was going on here?

aggiehawg said:

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Quote:

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The two loans of $16 million combined represent the largest loans the bank had ever issued up to that point in time, Brennan testified.

Brennan testified that he told the FBI in June 2017 the loans were performing. But he said that by Dec. 31 of that year they had been written off and the bank had lost $11.8 million. As of now, none of the collateral Manafort provided has been seized by the bank, Brennan testified.

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A bank doesn't write off loans that size when they have collateral. They just don't. Unless they were in a subordinate position and would have to pay-off a prior lien, which the title search would have revealed.

I understand that Calk, Brennan's boss is some sort of social climber but that isn't Manafort's fault. The bank did not follow sound underwriting practices nor recovery practices here. That's just odd to me.

WTH was going on here?

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The Feebs told them to right them off for the case.

aggiehawg said:

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Quote:

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The two loans of $16 million combined represent the largest loans the bank had ever issued up to that point in time, Brennan testified.

Brennan testified that he told the FBI in June 2017 the loans were performing. But he said that by Dec. 31 of that year they had been written off and the bank had lost $11.8 million. As of now, none of the collateral Manafort provided has been seized by the bank, Brennan testified.

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A bank doesn't write off loans that size when they have collateral. They just don't.

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If they had nonperforming loans in the $11.8 million range on their books, they would certainly be drawing the close eye of regulators as well. Weird indeed.

Doubt that. If they were instructed to do that by Team Mueller, he violated several regulations in asking them to do so and they violated them if they did so based on his request. An FDIC insured bank? Oh hell, no!

A bank doesn't book a loss until it is a loss. This isn't like AIG and using paper credit default swaps as a hedge against losses to make the balance sheet look better. This was real estate as collateral. Real estate that the bank had a lien upon as collateral. Foreclose first, then sue for a deficiency, if any, and then write it off. They wrote it off, which arguably means the lien is not longer in force. It is no longer a debt owed.

If what Brennan said is accurately reported and the bank did that, they defrauded their investors and likely fudged on some required reports to FDIC and Comptroller.

Not Team Mueller.

Plenty of Trump haters, who see their job going away, in the OCC or FRB.

Sasappis said:

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Very possible. They also could have done it in response to the bank regulators calling them on the decision to make a bad loan.

For whatever reason they did it, the loss does help the prosecution's case.

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Likely a phone call from Team Mueller shed light on the loan.

Sasappis said:

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aggiehawg said:

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Doubt that. If they were instructed to do that by Team Mueller, he violated several regulations in asking them to do so and they violated them if they did so based on his request. An FDIC insured bank? Oh hell, no!

A bank doesn't book a loss until it is a loss. This isn't like AIG and using paper credit default swaps as a hedge against losses to make the balance sheet look better. This was real estate as collateral. Real estate that the bank had a lien upon as collateral. Foreclose first, then sue for a deficiency, if any, and then write it off. They wrote it off, which arguably means the lien is not longer in force. It is no longer a debt owed.

If what Brennan said is accurately reported and the bank did that, they defrauded their investors and likely fudged on some required reports to FDIC and Comptroller.

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That is simply not accurate, at least not in Texas.

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How so? FDIC banks in Texas write off loans and release real property collateral for loans in default? They won't foreclose?

I can only wonder if foreclosure is in process but hasn't happened yet and thats what he meant.

BMX Bandit said:

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Those are all good jury arguments that may win for Manafort with the jury on bank fraud

However, legally no "victim" is needed under the statute. The jury may nullify & let him walk on that because I think lots of people will say "no harm, so what?"

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I'm assuming you are referring to the Conspiracy to defraud? If so I can see that since conspiracy is so all consuming, and it's the plan not the act.

Sasappis said:

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They will write off the loan for a variety of reasons (regulatory requirements for example) and then foreclose. Just because the debt has been written off does not mean that the loan has been forgiven or that they have waived their security interest.

One is an accounting treatment and the other is legal.

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I'm confused, so if they are writing off this loan removing it from their balance sheets, how are they still able to retain the right of foreclosure?

Deats said:

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I can only wonder if foreclosure is in process but hasn't happened yet and thats what he meant.

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That's not what he supposedly testified, however. There is a category for non-performing loans that is separate from writing off as a loss. If there was a deed in lieu of foreclosure, that's recorded and in the public records. If there is a foreclosure, that is in public records.

Even if his bank was in a subordinate position, and the first mortgage was still current, they wouldn't write it off. Not with Manafort under indictment. Ride the horse until she bucks you. This didn't happen in 2008 when real estate values went into the toilet. This was 2016.

Bad business decision and questionable accounting by the bank.

Sasappis said:

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They will write off the loan for a variety of reasons (regulatory requirements for example) and then foreclose. Just because the debt has been written off does not mean that the loan has been forgiven or that they have waived their security interest.

One is an accounting treatment and the other is legal.

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Can the bank foreclose if they've issued a 1099c? Seems to me that issuing a statement, to the IRS no less, declaring income to the borrower would have some legal effect.

Sasappis said:

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But let me be clear, I find the statement by the witness (at least as presented here) very odd. I would have a series of follow up questions. I don't know if the defense asked more follow ups or if they had a reason to avoid the follow ups.

I was just pointing out that I do not agree with the statement that the bank has forgiven the loan or has done anything to preclude foreclosure. At least without more information.

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Fair enough. But within a six month period a loan going from performing to write-off is unusual, particularly since it is part of the largest loans that bank has ever granted. Zero recovery efforts? 11.8 million is a sizeable write-off without due cause. And they were not there yet. It was a non-performing loan at best. Did they even accelerate the note based on the missed payments?

Sasappis said:

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RoscoePColtrane said:

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Sasappis said:

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They will write off the loan for a variety of reasons (regulatory requirements for example) and then foreclose. Just because the debt has been written off does not mean that the loan has been forgiven or that they have waived their security interest.

One is an accounting treatment and the other is legal.

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I'm confused, so if they are writing off this loan removing it from their balance sheets, how are they still able to retain the right of foreclosure?

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It is not removed from their balance sheet, it is just no longer an asset.

That happens every day with accounts receivable.

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I am not an accountant but a non-performing loan is neither asset nor a loss? Is that what you are saying? Because they still have collateral.

aggiehawg said:

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Sasappis said:

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RoscoePColtrane said:

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Sasappis said:

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They will write off the loan for a variety of reasons (regulatory requirements for example) and then foreclose. Just because the debt has been written off does not mean that the loan has been forgiven or that they have waived their security interest.

One is an accounting treatment and the other is legal.

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I'm confused, so if they are writing off this loan removing it from their balance sheets, how are they still able to retain the right of foreclosure?

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It is not removed from their balance sheet, it is just no longer an asset.

That happens every day with accounts receivable.

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I am not an accountant but a non-performing loan is neither asset nor a loss? Is that what you are saying? Because they still have collateral.

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A non-performing loan is still an asset. Even when it gets seriously delinquent it still is. There's just restrictions on accruing interest income off of it.

Also, "write off" doesn't have to mean down to $0 even though it sounds as such. It's impaired to the sum of future cash flows. The accounting asset would still exist based on the legal right to foreclose, which provides a future cash flow through the disposition of collateral.

Quote:

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Write off doesn't have to mean down to $0. It's written down or impaired to the sum of future cash flows. The accounting asset would still exist based on the legal right to foreclose, which provides a future cash flow through the disposition of collateral.

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But the testimony was that they had not proceeded against the collateral, in 8 months after write-off.

If they took a subordinate position, I could almost understand the actions (or lack thereof) here. And if the the largest loans ever done by the bank was for a subordinate position, well, writing it off as a loss is a, "We f***ed up," statement.

Bankers that I have always dealt with would use the term "in foreclosure" when they are proceeding against the collateral.

"Seize" is a civil forfeiture or an IRS term.

Let me ask this from an accounting standpoint. Loan was written off as a loss. A year later, after foreclosure and sale, the proceeds are then income? The loans were largely over collateralized to begin with. Could be there isn't a deficiency.

I have wondered how that works when the bank has taken the loss to offset corporate income and then recoup their supposed loss in a different tax year.

I just heard of a term, yesterday, that maybe of some value here.

A Zombie Property. The story I heard was about a couple that declared bankruptcy (on advice of counsel) and for the next 3 years repaired their credit and saved to buy a new house.

Low and behold . upon applying for a new loan they find out the bank never finalized the foreclosing, the debt was never sold at auction, they owed the accrued taxes, and best of all...the title was still under their name.

The new lawyer advised them to fix it and rent it ASAP to gain some income from it.

Zombie Property

https://www.nolo.com/legal-encyclopedia/zombie-foreclosures.html

Seems to me the bank wanted to keep Manaforts name on it? Still does? Biggest loan they have ever written...

Looks like Mulehead is wanting everything Omarosa recorded.

Wouldn't surprise me if we find out one day that she was an FBI plant from day one.

http://thehill.com/blogs/blog-briefing-room/401672-omarosa-says-shell-certainly-cooperate-with-muellers-team-if-they

She out to get Trump impeached by her own admission.