Manafort's bookkeeper: 'He approved every penny'

Paul Manafort's bookkeeper testified Thursday that the former Trump campaign chairman kept her in the dark about the foreign bank accounts he was using to buy millions in luxury items and personal expenses.

Testifying on the third day of special counsel Robert Mueller’s prosecution of the longtime GOP operative, who is facing bank- and tax-fraud charges, Heather Washkuhn of the Southern California-based accounting firm NKSFB said she handled Manafort’s books from 2011 to 2018, earning about $100,000 a year.

During that period, she managed the accounts for more than a half dozen Manafort properties in Florida, New York and Virginia, tracking money as it moved around his different bank accounts, helping pay his bills and manage rental properties, and creating annual statements for Manafort’s accountants to do his taxes.

“We try to have the full financial picture,” she testified, noting also that Manafort was closely monitoring her firm’s work, too. “He was very knowledgeable. He was very detail-oriented. He approved every penny of everything we paid.”

Under questioning from Mueller prosecutor Greg Andres, Washkuhn testified she was not aware of any holdings Manafort kept outside the U.S. She also acknowledged dealing frequently with Manafort's longtime associate Rick Gates, who cut a plea deal earlier this year and agreed to cooperate with the prosecution of Manafort and Mueller’s broader Trump-Russia probe.

Manafort has pleaded not guilty to charges of dramatically understating income on federal income tax returns, and he’s also fighting allegations of bank fraud totaling more than $20 million tied to five loans he applied for in connection with his homes.

With Washkuhn’s testimony, Mueller’s team started offering jurors an early glimpse of the bank fraud portion of its case. She said she wasn’t aware of Manafort’s loan efforts over the period, which coincided with a period when Manafort was beginning to fall behind in his bills, nearly lost his health insurance and maxed out his bank credit lines.

As his work as a political consultant with the Ukraine dried up, Manafort’s international lobbying company was going into the red. Washkuhn testified that the firm lost $630,000 in 2015 and $1.1. million in 2016, the same year Manafort linked up with Donald Trump’s presidential campaign.

While Washkuhn said she didn’t recall the terms of the loans Manafort was seeking, she said she would have used that information when filling out his annual financial statements.

Prompted by Mueller prosecutors who walked her through dozens of financial documents and email chains, Washkuhn acknowledged that Manafort gave banks several documents without her knowledge, including financial information that did not reflect her understanding of his monetary standing.

For example, one document from 2016 that Manafort produced for a loan with the Federal Savings Bank showed her client claiming $4 million more than her books showed he had in his reserves.

Washkuhn said Manafort drew a salary of $1.99 million in 2012, while Gates that year made $240,000. She said Gates made the same amount in 2013 and 2014, too. Manafort in 2013 also paid tens of thousands of dollars to Konstantin Kilimnik, an associate in the Ukraine, for “professional services.”

A lawyer for Manafort sought to get Washkuhn to concede that Gates sometimes unilaterally instructed her to make transactions related to the finances of Manafort or his political consulting firm, but the bookkeeper for what she called “high-net-worth individuals” insisted she never acted without Manafort’s direct authorization.

Ellis recessed the trial Thursday afternoon with Mueller’s prosecutors just getting started with their questioning of Philip Ayliff, a retired accountant who worked at the firm Manafort used for his taxes. Ayliff’s testimony so far has only covered the firm’s efforts to ensure their clients’ returns are accurate, which relies primarily on clients providing correct information.

Ayliff’s testimony will continue on Friday, with another accountant from the same tax firm, Cindy LaPorta, expected to follow.

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