One of Paul Manafort’s tax preparers on Friday said that she helped disguise US$900,000 in foreign income as a loan to reduce US President Donald Trump’s onetime campaign chairman’s tax burden.
The testimony of tax preparer Cindy Laporta came as prosecutors from special counsel Robert Mueller’s office focused on the heart of their financial fraud case against Manafort, with jurors hearing testimony that he inflated his business income by millions of US dollars, and concealed foreign bank accounts he was using to buy luxury items and pay personal expenses.
Manafort’s defense has sought to blame any criminal conduct on his long-time deputy, Rick Gates, while witnesses for the prosecution have testified that Manafort was heavily involved in his own finances and personally directed Gates’ actions.
Laporta said that she agreed under pressure from Gates during a conference call in September 2015 to alter a tax document for one of Manafort’s businesses to show the US$900,000 loan.
When Laporta and a colleague provided an assessment of how much tax Manafort would owe, Gates responded that Manafort did not have the money to pay it.
After a back-and-forth discussion about how much income should be reclassified as a loan to aid Manafort, they settled on US$900,000, she said.
The result was an altered tax payment that Gates told her “could be paid by Mr Manafort,” Laporta said.
Laporta, who testified under a grant of immunity from prosecutors, said she knew what she did was “not appropriate,” adding: “You can’t pick and choose what’s a loan and what’s income.”
Asked why she engaged in misconduct, Laporta said she had few good choices.
“I could have called them liars,” she said of Manafort and Gates. “But Mr Manafort was a long-time client of the firm and I didn’t think I should do that.”
The testimony is important, as prosecutors try to rebut defense arguments that Manafort cannot be responsible for financial fraud because he left the details of his spending to others.
Those others include Gates, who pleaded guilty earlier this year and is expected to testify soon as the government’s star witness.
Most of the e-mail evidence introduced on Friday implicated Gates more directly than Manafort in a scheme to convert income into loans.
However, Manafort was copied in on several e-mails discussing the matter.
Laporta also described an effort by Manafort and Gates to falsify financial records that would allow Manafort to obtain mortgage loans.
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