Posted on August 20 2018
While the Jury enters its third day of deliberations, one has to assume that the Jurors are carefully reviewing the mountain of documentary evidence. At the onset of the Manafort EDVA Trial, I know I’m not the only one who commented on how “document heavy” the prosecution case was.
I should also disclose that finance and tax laws are not my area of expertise. If you want to talk about property rights or easements then yes I’d take that challenge. So like most of you, understanding the complexity of Foreign Bank Accounts and taxes, I’m learning just like the rest of you.
Last week we learned the Jury sent a note to Judge Ellis, which contained a series of questions.
Jury asked the following:— SpicyFiles (@SpicyFiles) August 16, 2018
1. the FBAR question worries me, Jury asked if a person <50% required to file an FBAR
2. Doubt vs reasonable doubt
3. Shelf co
4. Can exhibit list be amended to include the indictment (WTF)..
Ellis dismisses Jury about 8 minutes ago so no verdict today
The FBAR question continues to bother me, so I figured it might be a decent time to go over the Superseding indictment and drill down on the FBAR Counts.
COUNTS 11–14: 31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. §§ 2 and 3551 et seq.
Failure To File Reports Of Foreign Bank And Financial Accounts
Many of these charges (minus the Counts for Gates) have an incomprehensible amount of “paper evidence”— SpicyFiles (@SpicyFiles) August 15, 2018
It is a simple YES or NO
The conspiracy charge again the Act does NOT need to be consummated, that conspiracy itself is a crime
EDVA Indictment👇🏻https://t.co/NUGbK6X6na pic.twitter.com/AXLvAstOYy
Specifically let’s look at pages 28 & 29, which reads in part:
defendant PAUL J. MANAFORT, JR., unlawfully, willfully, and knowingly did fail to file with the Treasury an FBAR disclosing that he had a financial interest in, and signature and other authority over, a bank, securities, and other financial account in a foreign country, which had an aggregate value of more than $10,000 in a 12-month period, during the years listed below:
You can read Manafort’s full indictment via this DOJ link, found here.
And yes while one could argue as is the case with the Prosecution, Manafort failed to file with the US Treasury as required. With that said, I have to admit that Manafort’s defense may have been clever. By planting the seeds of doubt as it relates to Manafort’s percentage of ownership of said Accounts and/or Shelf Companies. In my opinion this might explain the Jury’s question regarding FBAR. For now let’s set aside opinions and refrain from reading the tea leaves.
As referenced above Count 11..Manafort’s failure to file a FBAR. Some have asked about this and I think it is worthwhile exercise to point out that yes, from time to time the US Treasury (and other Government agencies) release updated “rule making”.
For example this is the FinCEN Notice 2011-2, and this would be applicable to Count 11. The Notice reads in part:
..extended due date for filing to June 30, 2012, for certain officers of employees of investment advisors registered with the Securities and Exchange Commission who have signature authority over, but no financial interest in, foreign financial accounts of their employer. (emphasis added)
See FinCEN link found here. Moving along to Count 12 in the Manafort indictment. As the Prosecution argued the FBAR filing date is June 30, 2013, pursuant to FinCen’s FBAR 2012-1 Notice, link found here.
I could be wrong but I surmise that the Manafort strategy was, confuse the jurors with the (current) acceptable FBAR exemptions, to see the full list of FBAR exemptions see this IRS link, found here.
Certain foreign financial accounts jointly owned by spouses
United States persons included in a consolidated FBAR
Certain individuals with signature authority over, but no financial interest in, a foreign financial account
This is the 2017 FinCen FBAR Filing Instruction, I found pages 4-9 extremely helpful to understand the filing requirements...
Why does this matter? Well after reading multiple pages of the transcripts, I noticed that Manafort’s attorneys argued that the 50% ownership didn’t trigger the FBAR requirement. Which is odd considering the language specifically states “directly” or “indirectly”. Take a wild guess at who owns the remaining 50% ownership in these entities? You betcha Mrs Manafort, so I don’t think it’s a stretch that Mr Manafort owing 50% while his wife owns the remaining 50% would qualify for “indirectly”. Again I could be wrong and as I previously disclosed I’m not an expert in this particular portion of the law. But the way I read the FinCEN 114 I can’t see a logical argument that Manafort would be exempt. Particularly since Mr & Mrs Manafort have filed a joint tax return.
SHELF vs SHELL Cos
Moving along to the Jurors question about a “shelf company” vs a “shell company” this particular question bothered me more so than the FBAR question. In simple terms a “shelf company” is a company created that “sits on a shelf”. A shell company is a company that typically has monies flowing in and out of it. I could be wrong but it appears that Manafort used both “shelf” and “shell” companies. From what I can surmise, it appears that Prosecution identified at least two such “shelf companies” Leviathan Ltd. and Peranova Ltd.
Based on the Exhibit list, Levianthan Ltd is noted as exhibit numbers: 197, 360A, 369A, 369B 369C found on pages 9 and 17, respectively.
Peranova Ltd can be found on pages 2, 9 and 17
Hoo-Hoo-Hoo— SpicyFiles (@SpicyFiles) July 19, 2018
It’s Christmas in July because late last night SC Mueller’s office filed this...document # 142
Also wait for end of the thread, because seeing Tony Fabrizio name made me squeal
One of Five pic.twitter.com/Mm8AvdkEO1
My point is, this is an incredibly complex case. There’s so much evidence that it may take the Jurors days to combine through all the documentation. That said I’d be a fool if I didn’t acknowledge that Manafort’s straegy wasn’t a decent one, it is. The defense did their best to raise “reasonable doubt” and muddied the water as it relates to FBAR filing requirements. They also (predictably) attacked Rick Gates but the Prosecution’s closing arguments that the evidence is what the Jurors should focus on.
”the star witness isn’t Mr. Gates, it is the evidence”
At the end of Manafort’s trial the Prosecution went back to: “follow the money”. By having a FBI forensic accountant and a FinCEN investigator testify how they were able to trace the origin, various accounts and ultimate destination of the funds. One can only hope that the Jury retains that testimony. And yes while it isn’t “sexy” or provocative testimony about an extramarital affair (or four) it is factually relevant evidence that also provides a clear path from the beginning to the end. If you follow the money, you can actually see the facts, versus the subterfuge.
And lastly I don’t think I’m alone in thinking that Donald Trump’s outburst and attacks on Special Counsel Mueller coupled with Kevin Downing’s inappropriate preening in front of cameras about Trump’s comment and tweet.
There is ZERO question here— SpicyFiles (@SpicyFiles) August 17, 2018
And @PaulCallan makes an incredibly important observation. The fact that Trump “went” there it’s just another example of his overt:
🇷🇺Consciousness of Guilt🇷🇺
Manafort nor his defense needed to argue selective prosecution because Trump just did🤬 https://t.co/8zMP5pctJa
At any rate, stay focused on what matters...and not to belabor the point, if Trump is so innocent then why is he constantly attacking the Special Counsel Investigation, inserting himself into the Paul Manafort trial while the jury is deliberating....oh wait...it’s Donald Trump. Never mind. I guess if my Campaign Chairman was on trial facing >300+ years in prison, allegedly laundered tens of millions of dollars all while not paying taxes. I would freak out too. But then again I wouldn’t associate with the likes of Paul Manafort or Rick Gates. I suppose to each their own but man Trump does keep some rather interesting company...-Spicy Out
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