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Tierney Sneed

Tierney Sneed is a reporter for Talking Points Memo. She previously worked for U.S. News and World Report. She grew up in Florida and attended Georgetown University.

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Special Counsel Robert Mueller has announced a new indictment against former Trump campaign chairman Paul Manafort and former campaign aide Rick Gates.

In a court document filed in the case Mueller previously brought against Manafort and Gates in Washington D.C., prosecutors indicated that a 32-count indictment had been filed against two men in the Eastern District of Virginia, with a copy of thenew indictment attached.

The new charges include making false statement on tax returns, failure to report foreign bank and financial accounts, and bank fraud.

The indictment alleges that Gates and Manafort avoided paying taxes on money they earned lobbying in Ukraine by funneling it through real estate, contractors and in other payments, and even disguising it as loans. Later on, when their Ukraine project dried up — because their client, Victor Yanukovych had fled to Russia — Manafort, with help from Gates, used his real estate properties, as well as falsified income statement to extract more money through loans, the indictment alleged. In seeking some of those loans, some as recent as in 2017, Manafort allegedly misled bankers through falsified documents and other means to pump up the loans, according to the indictment.

“Manafort and Gates fraudulently secured more than twenty million dollars in loans by falsely inflating Manafort’s and his company’s income and by failing to disclose existing debt in order to qualify for the loans,” the indictment said.

Their scheme allegedly involved the use of offshore accounts, and included misleading their tax preparers, the indictment said. It alleged that more $75 million flowed through the offshore accounts and that $30 million was laundered by Manafort with assistance from Gates.

Not long after the new indictment dropped, the Daily Beast reported that Gates had fired Tom Green, an attorney who was believed to be working on a plea deal with Mueller. About an hour later, however, a document was filed in Gates’ case officially adding Green to his representation. Green then filed a motion on Gates’ behalf saying that Gates did not opposed his old legal team’s move to withdraw from the case. The judge then approved of the old team withdrawing.

Some of the new charges relate to transactions that were also singled out in the indictment Mueller brought against Manafort and Gates in late October. The new indictment alleges that money that funneled out of foreign accounts connected to Manafort was disguised as loans, rather than income, and that he did not pay taxes on it. He also allegedly did not pay taxes on money that was wired out of foreign accounts to purchase real estate, pay contractors renovating his homes and on car payments, according to the indictment.

Manafort and Gates are both accused of failing to report to the U.S. Treasury the foreign banks account they allegedly controlled, according to the indictment.

The indictment details that Manafort and Gates allegedly misled lenders and inflated their incomes to secure loans.

In one instance, Manafort allegedly represented to a bank that his daughter and son-in-law were living in a condominium he owns in New York as a way of securing a greater loan, even as he was using it as an AirBnB rental, according to the indictment.

For other loans with other banks, Manafort and Gates allegedly doctored income statements from their consulting firm DMI, the prosecutors said. The indictment references another unnamed “conspirator” working at a bank where Manafort sought a loan.

 

Read the court filing below:

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Loans amounting up to $16 million that Paul Manafort received from a bank run by a Trump campaign economic adviser are getting scrutiny from Special Counsel Robert Mueller, who is interested in whether Manafort promised the banker a White House job in exchange for the loans, NBC News reported Wednesday.

The banker, Steve Calk, president of Federal Savings Bank in Chicago, sat on the Trump campaign’s economic advisory council — a position that was announced in August 2016, while Manafort was chairman of the campaign. Manafort was ousted from the campaign not long after.  He and his wife went on to secure three separate loans from the bank in late 2016 and early 2017.

References to those loans have popped up in recent court filings related to the negotiations over Manafort’s bail proposal, which involves properties he had put up as collateral for the FSB loans. The filings, coupled with NBC News’ recent reporting, suggest that Mueller is digging deeper into aspects of Manafort’s personal finances—and one of his key lenders— that to this point have been peripheral to the main case.

“The government has secured substantial evidence that Manafort secured this mortgage from The Federal Savings Bank through a series of false and fraudulent representations to The Federal Savings Bank,” Mueller said in a filing last week.

NBC News, citing two sources, said that federal investigators are investigating a possible “quid pro quo” deal between Manafort and Calk, including an offer of a White House gig. Calk did not ultimately get a job in the current administration. His spokesman did not return NBC News’ inquiries, nor did the bank’s PR firm.

Three sources told NBC News that other bank employees were skeptical of the loans to Manafort, and one source revealed that investigators have gotten at least one former employee to cooperate with the probe.

The White House did not comment to NBC News on whether Manafort had sought a position in Trump’s cabinet for Calk. Manafort spokesman Jason Maloni pointed NBC News to a previous statement he gave on Manafort’s loans.

Scrutiny of the loans began last year as the various investigations into Manafort’s finances were heating up. As other outlets noted at the time, the $16 million in loans were huge for a bank of such a relatively small size. They amounted to nearly 24 percent of the bank’s reported $67 million of equity capital and 5.4 percent of the bank’s total assets.

In July, it was reported that Manhattan District Attorney Cyrus Vance had subpoenaed the bank for records related to the Manafort loans.

In late October — right after Mueller dropped an indictment charging Manafort with various financial crimes, among other things —  a local Chicago CBS affiliate reported that Calk was speaking to the FBI.

Manafort has pleaded not guilty to the charges, which also include failure to disclose foreign lobbying.

In filings with the FDIC that were posted publicly in late January, the bank reported a $12 million loss in the 4th quarter of 2017. It was not explicitly clear whether the loss was related to the loans to Manafort. The loss is listed as being off of “commercial and industrial loans.”

Meanwhile, the negotiations around Manafort’s proposed bail package have dragged on, with much of the back-and-forth taking place under seal. Some of the related filings were unsealed on Friday.

In them, Mueller argued that Manafort’s bail proposal is “deficient” due to “additional criminal conduct” prosecutors have learned of since the initial bail determination.

“That criminal conduct includes a series of bank frauds and bank fraud conspiracies, including criminal conduct relating to the mortgage on the Fairfax property, which Manafort seeks to pledge,” Mueller said, adding that Manafort secured the mortgage through a “a series of false and fraudulent representations” to Federal Savings Bank.

“For example, Manafort provided the bank with doctored profit and loss statements for DMP International LLC for both 2015 and 2016, overstating its income by millions of dollars. At the next bail hearing, we can proffer to the Court additional evidence related to this and the other bank frauds and conspiracies,” Mueller said.

 

 

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A former lawyer for a major U.S. law firm pleaded guilty Tuesday in federal court in Washington D.C., to lying to federal authorities in a case that is part of Special Counsel Robert Mueller’s wide-ranging Russia probe.

The guilty plea by Alex van der Zwaan, who worked at the firm Skadden Arps Slate Meagher & Flom LLC until he was terminated in November, came as part of a plea agreement between Mueller’s team. The case is being overseen by U.S. District Judge Amy Berman Jackson, who is also overseeing Mueller’s cases against former Trump campaign aides Paul Manafort and Rick Gates.

Manafort, a former Trump campaign chairman, and Gates, his deputy who also worked for the campaign, pleaded not guilty last October to charges brought by Mueller related to their work in Ukraine for a pro-Russian political party. Skadden was recruited by Manafort to write a 2012 report justifying the Ukrainian government’s prosecution and conviction of Yulia Tymoshenko, a political rival of Viktor Yanukovych, whom Manafort was advising.

Van der Zwaan pleaded guilty to lying to investigators about his communications with Rick Gates and an unidentified third person known as “person A”.

Van der Zwaan was questioned by investigators on Nov. 3, 2017, about conversations he had with Gates and a “Person A” in the fall of 2016.

At Tuesday’s plea hearing, Andrew Weissmann, a prosecutor on Mueller’s team, broadly described van der Zwaan’s communications with Gates and “Person A,” as well as what he told federal investigators about those communications last year.

“Person A” was described by Weissmann as someone who spoke Russian and who was located in Ukraine. Gates, “Person A” and van der Zwaan worked together on the rollout of the 2012 Tymoshenko report, Weissmann said.

FBI agents and prosecutors interviewed van der Zwaan under oath at the special counsel’s office in November, as part of Mueller’s investigation into Manafort and Gates’ alleged Foreign Agents Registration Act violations.   Van der Zwaan told them that the most recent communication he had with Gates was an “innocuous” conversation in August 2016 and that he hadn’t communicated with “Person A” since 2014, when in fact, according to Weissmann he spoke to them both in September 2016.

A statement of offense that was released to the public after the hearing said that Gates called van der Zwaan in September 2016 to tell him to contact “Person A.” Gates also sent the lawyer documents that included a “preliminary criminal complaint in Ukraine,” using the encryption service Viber, according to the court filing. Van der Zwaan called “Person A” to discuss in Russian the potential for charges to be brought against Skadden and Manafort — a call that the lawyer recorded, according to the court filing. He then called a senior partner who worked on the 2012 report — a call he “partially recorded,” according to the filings — and also called Gates. Van der Zwaan recorded the Gates call and took notes on all of the calls, according to the statement of offense.

During his November 2016 interview, Van der Zwaan was also asked about an email “Person A” sent him in Russian, that, according to Weissmann, was not handed over to his law firm to produce for Mueller’s team. Van der Zwaan told investigators he did not know why that email wasn’t produced and that he didn’t respond to it, according to Weissmman. Van der Zwaan “knew full well” that he had not produced it and that he destroyed that and other emails, Weissmann said.

Van der Zwaan is 33 years old and the son-in-law of Ukrainian-Russian billionaire German Khan. Born in Brussels, he obtained a law degree in Britain and is now a Dutch citizen.

As part of the plea hearing, van der Zwaan indicated that he and Mueller had come to an agreement on recommending that he face zero to six months of jail time, and a fine between $500-$9,500 as part of his plea. Judge Amy Berman Jackson reminded him that there’s no guarantee that that will be his ultimate sentence.

It was also revealed during the hearing the van der Zwaan’s wife was dealing with a difficult pregnancy, with his attorneys asking that they expedite his sentencing hearing. Jackson set the sentencing hearing for the morning of April 3. In the meantime, his travel is restricted to the Washington, D.C.-area and to Manhattan, where his lawyers are located. His passport has been handed over to the FBI, and he will need to get court approval for any other travel within the continental United States.

 

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Updated at 1:27 p.m. ET

In a surprise development, a lawyer who worked at the firm that produced a report for Paul Manafort’s Ukrainian lobbying campaign has been charged with lying to Special Counsel Robert Mueller’s team. The charges were revealed in court documents filed on Friday that became public on Tuesday.

The lawyer, Alex Van Der Zwaan “willfully and knowingly” made “materially false, fictitious, and fraudulent statements and representations” to the investigators about his conversations with Manafort deputy Rick Gates and an unnamed third person, prosecutors alleged in the new court filings.

A plea agreement hearing is schedule for 2:30 p.m. ET in federal court in Washington, D.C., where Van Der Zwaan is expected to plead guilty.

Zwaan —who according to the Kyiv Post is based in London and is the son-in-law of Russian oligarch German Khan — spoke to investigators on Nov. 3, just a few days after Mueller’s indictments against Manafort and Gates became public, the court documents said. Before Tuesday’s revelation, Zwaan’s name has come up only peripherally in connection with the Manafort-Gates case.

Gates and Manafort have both been charged by Mueller for failure to disclose the Ukrainian lobbying work, among other things. They have both pleaded not guilty.

Zwaan’s firm’s Skadden Arps Slate Meagher & Flom LLC was behind a 2012 report that sought to justify the Ukrainian government’s prosecution and conviction of Yulia Tymoshenko, the former prime minister of Ukraine. Manafort, who went on to serve as President Trump’s campaign chairman, recruited the firm to produce the report while he was advising Viktor Yanukovych, a pro-Russian Ukrainian politician.

It was reported in September that Mueller was interested in Skadden’s involvement in the report. “The firm terminated its employment of Alex van der Zwaan in 2017 and has been cooperating with authorities in connection with this matter,” Skadden said in a statement released Tuesday.

Zwaan allegedly told investigators he last spoke to Gates in August 2016, when he in fact spoke to Gates a month later, prosecutors said in the filings. The September conversations also involved a person dubbed by Mueller as “Person A,” according to the court documents. Zwaan “surreptitiously recorded” the phone calls, the prosecutors alleged.

Zwaan allegedly also misled investigators about a September 2016 email between him and “Person A,” according to the court documents. He allegedly told investigators he did not know why the email was not produced for Mueller’s team, the court document said. Prosecutors alleged that Zwaan deleted and otherwise did not produce that and other emails.

Read the filing below:

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The battle over Pennsylvania’s gerrymandered congressional map continued throughout last week. The state Supreme Court had ruled last month that the state’s districts were drawn in a way that violated Pennsylvania’s constitution. The GOP legislature and Democratic Governor Tom Wolf failed to come to an agreement on a redrawing the map, with Wolf rejecting the Republicans’ offered replacement because, he said, it was also also overly partisan.

With their failure to come to an agreement, the state Supreme Court sought to impose its own new map for 2018, using the advice of outside expert Nate Persily. That map was unveiled in a court order on Monday. Republican state lawmakers are expected to challenge the map in court.

Pennsylvania is not the only place where lawmakers are fighting over redistricting. In North Carolina, a state court last Monday rejected Democrats’ request that the state redraw five legislative districts according to the map drawn by Persily (who was also a court-appointed expert in the North Carolina case), rather than use the map Republicans drew in 2011. That Republican 2011 map has been tossed out in federal court earlier this year. But Republicans were partially successful in getting the U.S. Supreme Court to temporarily halt the use of the Persily map in Wake and Mecklenburg counties, prompting the Democratic request to the state court that was rejected this week.

These and other state gerrymandering battles have the attention of national politicians. Senate Majority Leader Mitch McConnell in a New York Times interview put his thumb on the scale for allowing Republicans to continue to draw maps that boost their advantage. Unprompted, according to the Times, McConnell brought up Democrats’ lawsuits against Republican-gerrymandered maps and asked, “What do you think the founding fathers had in mind when they gave it” — the power to draw state maps — “to the state legislatures?”

“They thought it was going to be a political exercise,” he said.

National-level Democrats are also paying attention, and have made fighting GOP gerrymandering one of their key issues ahead of the 2020 Census.

That Census will provide the data that lawmakers will then use to draw the maps for the following decade. Voting rights advocates secured a major win last Monday, when it was revealed that Thomas Brunell — a University of Texas at Dallas professor known for defending GOP-gerrymandered maps — was no longer being considered for the number two post at the bureau.

McClatchy last week rounded up some of the voting legislation statehouses will be considering in the lead-up to the 2018 midterms. Per its report, there are at least 16 bills that restrict the right to vote, while 144 pieces of legislation would expand the right to vote.

Editor’s Note: This post has been updated to add today’s Pennsylvania Supreme Court decision relating to Pennsylvania’s congressional map. It has also been corrected to clarify that the U.S. Supreme Court halted the use of court-appointed expert Nate Persily’s map in North Carolina’s Wake and Mecklenberg counties, not in the entire state.

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The hardline immigration legislation the White House backed in order to protect so-called “Dreamers” failed to overcome a filibuster Thursday. It was the fourth immigration-related legislation to go down Thursday afternoon, as the Senate considered measures to codify the DACA (Deferred Action for Childhood Arrivals) program.

The White House-supported bill, sponsored by Sen. Chuck Grassley (R-IA), imposed steep cuts on legal immigration, while giving immigrants brought to the U.S. illegally as minors a pathway to citizenship. President Trump endorsed the bill, while his administration lobbied aggressively against the bipartisan DACA bills also considered Thursday.

A vote on advancing the legislation failed 39-60, well short of the 60 votes it needed to move forward. It garnered significantly less support than the two other DACA bills the Senate voted on Thursday.

With the failure of all the bills, the fate of hundreds of thousands of immigrants are in jeopardy. Trump rescinded last year the Obama-era program that protected them from deportation. However, that move is in legal limbo due to lawsuits against Trump’s decision.

The Senate voted also voted on a fourth immigration-related bill Thursday that did not address DACA, but rather targeted sanctuary cities. It too fell short of the 60 votes required to move forward.

The first vote was on narrow deal to protect DACA recipients that was sponsored by Sens. John McCain (R-AZ) and Chris Coons (D-DE). The second was on the sanctuary city legislation, which was sponsored by Sen. Pat Toomey (R-PA).

The third piece of immigration-related legislation to go down Thursday afternoon was sponsored by Sens. Mike Rounds (R-SD) and Angus King (I-ME), and backed by a bipartisan group of senators known as the “Common Sense Coalition.” It would given young immigrants brought to the U.S. illegally as children a pathway to citizenship. It provided $25 billion over 10 years in border security, including for the “construction of physical barriers.” It would also block green card holders from sponsoring adult children for immigration, meaning that those immigrants would have to wait until they become citizens before sponsoring their adult children.

It received 54 votes in its favor and 45 against the legislation.

It was considered the best opportunity for the Senate to put up the votes it would need from both parties to overcome a filibuster. The Department of Homeland Security had blasted the bill for creating a “mass amnesty” and for “destroy[ing]” the DHS’ ability to “to remove millions of illegal aliens.”

Immigration advocates were skeptical of it, but most preferred that legislation over no protection for DACA recipients.

The DACA program shielded young immigrants brought to the U.S. illegally as children from deportation. Their fate remains in jeopardy, and thousands had already had lost their protected status by the time the Senate took up the issue.

Two courts have blocked Trump’s move to terminate the program — and previous DACA recipients can reapply for protection while the case remains in legal limbo. The administration has asked the Supreme Court to consider taking up one of the cases and overturning the decision.

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After months of avoiding questions about how it was going to spend the leftovers of its record-breaking haul, President Trump’s inaugural committee filed tax documents which revealed, among other things, that it had paid nearly $26 million to an event planning firm connected to a Melania Trump advisor, according to a New York Times report.

The advisor, Stephanie Winston Wolkoff, personally netted $1.62 million, an unnamed inaugural committee source told the Times.

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The Internal Revenue Service and the Justice Department have issued subpoenas for people who have lent money to or assembled investors for real estate projects linked to Jared Kushner’s family in what appears to be a tax-related inquiry, Bloomberg reported Thursday.

The report, based on an unnamed source familiar with the matter, says the subpoenas were issued within the last year, but appear to be unrelated to Special Counsel Robert Mueller’s Russia probe or the other inquiries into Kushner family business dealings that have become publicly known.

Charles J. Harder, an attorney representing Kushner Cos., issued a statement to Bloomberg denying that the company was under a tax investigation or that it had been contacted by the relevant tax authorities.

“Kushner Cos. is not under investigation for any tax issues. It has had no contact with anyone at the IRS or Justice Department Tax Division,” Harder’s statement said. “It has received no subpoenas or audit requests about its taxes. It is not in tax court on any audits. If there is an investigation about others’ taxes, it has nothing to do with Kushner Cos. or its businesses.”

The Justice Department and IRS declined to comment for the Bloomberg story.

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Amid ongoing allegations that President Trump has sought to obstruct the Justice Department’s Russia probe, a new Washington Post report reveals that the White House Counsel last spring reached out to a top DOJ to request that then-FBI Director James Comey publicly state that Trump himself was not under investigation.

The April phone call between White House Counsel Don McGahn and Dana Boente — the Justice Department official who at the time was overseeing the probe — is one of many instances Washington Post details of McGahn’s struggles to assuage Trump’s demands. In May, Trump fired Comey.

The report goes on to recount other moments of tension between McGahn and Trump, as well as others on the White House legal team.

McGahn and Trump have had “spectacular fights,” one unnamed source told the Washington Post. At one point early on in the administration, McGahn was worried that the President was reaching out to the Justice Department behind his back, the Washington Post reported.

Special Counsel Robert Mueller’s investigation is closely examining questions concerning potential obstruction of justice. Mueller was appointed after Trump fired Comey last year, in a letter that cited referenced Comey’s private assurances to Trump that he was not personally under investigation.

Mueller has reportedly obtained a draft version of that letter that is said to have been more focused on the Russia investigation.

According to Wednesday’s report, the call to Boente — who now is the FBI’s general counsel, but has held other top DOJ positions under Trump including Acting Deputy Attorney General  —  occurred in April, after Trump had personally lobbied Comey to make the public announcement.

Trump suggested to Comey — in one such conversation that Comey recounted in Senate testimony — he might have the White House reach out to Boente, after Comey mentioned that he had passed Trump’s request on to the Acting Deputy Attorney General.

When McGahn called Boente, he asked first whether it was appropriate matter for them to discuss, the Washington Post reported. McGahn was ultimately unsuccessful in convincing Boente that Comey should make the public statement, according to the report.

It was previously reported by the New York Times that Trump sought to fire Mueller last June, but backed down when McGahn signaled that he’s quit rather than carry out the order. McGahn was interviewed by Mueller’s team in late November and early December.

Wednesday’s Washington Post report revealed McGahn’s legal team had put together that 18-day timeline for the period between when then-Deputy Attorney General Sally Yates first warned McGahn that then-National Security Advisor Mike Flynn was misleading senior White House officials on Russian contacts and when Flynn was finally fired. That timeline, the Washington Post reported, has been turned over to Mueller.

McGahn has also come under fire for how he handled allegations of domestic abuse against a top White House aide. The aide, Porter, resigned last week, after the allegations became public. But the White House has continued to struggle to explain why Porter was allowed to continue to serve in his position, which included the handling of sensitive information, after it appeared that the allegations had come up in the FBI’s background check for a security clearance for him.

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Vice President Mike Pence falsely claimed Wednesday that it was the “universal conclusion of our intelligence communities” that “none” of the efforts by foreign actors to meddle in the 2016 election “had any effect on the outcome of the 2016 election.”

Pence made the remarks at an Axios event, where Mike Allen asked Pence if he agreed with Director of National Intelligence Dan Coats’ testimony to Congress Tuesday warning that Russia will target the 2018 midterms.

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