White House

New Indictments in Manafort Case

Paul Manafort arrives at a hearing at U.S. District Court in Washington, D.C., January 16, 2018. (Yuri Gripas/Reuters)
Mueller adds tax and fraud charges.

Special Counsel Robert Mueller’s office announced this afternoon that a federal grand jury in Virginia has returned a superseding indictment against Paul Manafort and Richard Gates. The new indictment, which charges 32 felony counts, replaces the original 12-count indictment filed in late October.

The indictment dramatically alters the case, although not in a way that will surprise National Review readers.

There continues to be no connection to the Trump campaign (which Manafort briefly chaired and Gates also served), much less any suggestion of collusion between the campaign and Russia. The new indictment, however, retreats from the original allegations of money laundering, failure to register as foreign agents, and the so-called conspiracy against the United States.

We observed back in November that all of these charges seemed problematic – the money-laundering theory was shaky, failures to comply with the Foreign Agents Registration Act are rarely charged criminally, and there is no “conspiracy against the United States” in federal law (the charge is either conspiracy to defraud the United States, which seemed to be what Mueller was alleging, or conspiracy to violate a federal criminal law).

We also noted at the time that the oddest thing about the original indictment was the absence of tax-evasion and bank-fraud charges. Mueller had seemed to lay the groundwork for these allegations but to have refrained from charging them.

Voila! The case is now exclusively a tax and bank-fraud case.

Counts 1 through 10 charge Manafort with subscribing false tax returns from 2010 through 2014, and Gates with assisting him in their preparation. Gates is also charged with subscribing to false tax returns in those same years (in Counts 15 through 20 – including two returns for the year 2013). Counts 11 through 14 charge Manafort with failing to file required “FBAR” reports regarding his controlling interest in foreign bank accounts (an offense that appeared in the original indictment); and Counts 21 through 23 charge Gates with that same FBAR offense.

Counts 24 through 32 charge both defendants with bank-fraud conspiracy and substantive bank-fraud offenses in connection with five different loan transactions. The transactions allegedly involve a combined $25.9 million.

As discussed in my aforementioned column, it is likely that Mueller delayed in filing the tax charges because they must be approved by the Justice Department’s Tax Division, which is often a slow process. We predicted that there would be tax charges, in part, because the money-laundering allegations in the original indictment relied on tax offenses. Wisely, I believe, prosecutors discarded the money-laundering counts once the tax charges were ready to go.

One of the main reasons I was surprised by the absence of bank-fraud charges in the original indictment is the heavy penalty for such offenses. As I observed at the time:

Consider this: The penalty for the conspiracy Mueller did charge in Count One [i.e., the now abandoned “conspiracy against the United States”] is no more than five years’ imprisonment (see Section 371 of Title 18, U.S. Code); the penalty for bank-fraud conspiracy is up to 30 years’ imprisonment (see Section 1344). If, as I suspect, Mueller is trying to pressure Manafort [to become a cooperating witness], a bank-fraud conspiracy is a heavier hammer than anything currently in the indictment. Maybe Mueller is planning on a superseding indictment that piles on tax and fraud charges.

That is exactly what the special counsel has done. Suffice it to say that Manafort and Gates are looking at decades in prison if convicted on these charges.

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