Paul Manafort convicted at fraud trial in setback for Trump

President Trump’s former campaign chairman found guilty on counts of tax fraud, failing to file a financial document with the government, and two counts of bank fraud

Paul Manafort was found guilty on eight charges of tax and bank fraud and the judge declared a mistrial on 10 other counts. AFP. File photo.

A federal jury convicted Paul Manafort, president Donald Trump’s former campaign chairman, at his fraud trial, handing a crucial victory to special counsel Robert Mueller.

Manafort was found guilty on five counts of tax fraud, one count of failing to file a financial document with the government, and two counts of bank fraud. The jury couldn’t reach a decision on the other 10 counts. He was accused of lying to tax authorities about his income and offshore tax accounts, failing to file reports about those accounts, and defrauding banks to get loans.

The convictions were half of a double blow to Mr Trump. At the moment that the Manafort verdict was read out in Alexandria, Virginia, Trump’s long-time personal lawyer, Michael Cohen, pleaded guilty in Manhattan to eight counts of tax evasion, false financial statements and unlawful campaign contributions.

President Trump reacted to the news by calling Mr Manafort a “good man” and saying that it was a “sad thing” he was convicted in federal court.

“This has nothing to do with Russian collusion ... This is a witch hunt and it’s a disgrace,” he told reporters in West Virginia.

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In the Manafort matter, District Judge TS Ellis III declared a mistrial on the 10 counts for which the jury could reach no verdict. Manafort and his wife, Kathleen, showed no emotion when the courtroom deputy read the verdict. Manafort looked stunned as he was led out of the courtroom.

Manafort remains in custody and faces a September 17 trial in Washington on charges of money laundering, failing to register as a foreign agent and obstruction of justice. By deadlocking on all the conspiracy counts it suggests that the jury rejected some or all of the testimony of Rick Gates, Manafort's former right-hand man who pleaded guilty and cooperated with Mr Mueller's investigation. Gates was the star prosecution witness and defence lawyers depicted him as a liar and embezzler.

Manafort, 69, faces a lengthy prison term for each count, raising the question of whether Mr Trump might take the politically fraught step of pardoning his former aide or commuting his sentence. Without Mr Trump's intervention, Manafort's only hope for leniency would be to cooperate with Mr Mueller's probe. No sentencing date has been set as Judge Ellis said he wanted to give the prosecution time to decide whether to retry the 10 counts. They have until August 29 to decide how to proceed.

The case was the first brought by Mr Mueller to go to trial. Mr Mueller, who is investigating Russian interference in the 2016 election, has charged 32 people and secured five guilty pleas.

Jurors in Alexandria, Virginia, took four days to find Manafort guilty of eight of the 18 counts he faced, bringing a relatively speedy conclusion to a trial that Judge Ellis kept moving swiftly with frequent excoriations to prosecutors to pick up their pace.

Manafort's crimes weren't related to Russian interference in the 2016 US election, the primary focus of the special counsel investigation. But Mr Mueller's victory is still a blow to Mr Trump, who has ratcheted up his attacks on the special counsel, calling the probe a "witch hunt" led by "angry Democrats" and urging him to end his work before the November congressional elections. Now, however, Mr Mueller's backers have a jury conviction to hold up as evidence of his progress.

Mr Trump has sent mixed messages about Manafort. He once sought to distance himself from Manafort, saying he worked for the campaign for a "very short time," even though Manafort worked for the campaign from March to August 2016. But Trump has also decried Mr Manafort's prosecution by Mr Mueller, saying in a tweet during the trial that he was treated worse than the late mob boss Al Capone.

The president has stepped up his attacks on Mr Mueller’s probe of Russian election interference in recent weeks, embracing the argument by some House Republicans that the inquiry was tainted from the start by anti-Trump sentiment in the FBI and Justice Department.

Mr Trump’s legal team has been pressuring Mr Mueller to wrap up his work, and the president’s staunchest allies in the House have called for impeaching Deputy Attorney General Rod Rosenstein, who appointed Mueller and is overseeing his investigation.

Mr Mueller has charged 32 people, including more than two dozen Russians, and won guilty pleas from five people. The verdict could help insulate Mr Mueller from attacks on his investigation, though it’s unlikely to stop Mr Trump’s supporters from questioning his legitimacy as special counsel.

Prosecutors said at trial that the evidence of Manafort's guilt was overwhelming. They used 27 witnesses and 388 documents to pierce the veil of lies he repeatedly told – to US tax authorities and to bankers – to maintain a lavish lifestyle that frayed as the Ukraine business dried up. Manafort put on no witnesses and didn't testify.

The trial detailed Manafort's work as a strategist and lobbyist for foreign interests and his ties to pro-Russia oligarchs in Ukraine. When Manafort advised Ukrainian president Viktor Yanukovych and his Party of Regions, those businessmen paid for his work by moving millions into shell companies in Cyprus, jurors heard.

In all, Manafort was paid more than $60 million between 2010 and 2014. By the time he joined the Trump campaign, Manafort was desperate for cash, prosecutors said.