Manafort's accountants to take spotlight in trial's third day

[August 02, 2018]  By Nathan Layne

(Reuters) - The trial of U.S. President Donald Trump's former campaign chairman Paul Manafort is set to shift focus to the accountants who prepared years of his allegedly false tax returns as the court battle heads into its third day on Thursday.

Prosecutors have spent the first two days of the trial attempting to portray Manafort as a tax cheat and a liar who hid much of the $60 million he earned from political work in Ukraine by stashing it in undisclosed overseas accounts.

Manafort routed millions to the United States by putting it in real estate, and spending it on expensive suits, cars and home renovations, according to half a dozen witnesses who testified on Wednesday in a federal court in Alexandria, Virginia.

Prosecutors say he evaded taxes through this scheme. Five of the 18 counts he faces relate to filing false tax returns.

Manafort has pleaded not guilty to all charges.

Greg Andres, one of Special Counsel Robert Mueller's team, said prosecutors would question the head of a landscaping firm and one other vendor on Thursday before moving on to call accountants and a "series of tax preparers" to the stand.

Heather Washkun, managing director of Nigro Karlin Segal Feldstein & Bolno, an accounting firm, would be one of the witnesses to be called on Thursday, Andres said.

Manafort's lawyers have made attacking Richard Gates, Manafort's long-time business partner who pleaded guilty in February and is cooperating with Mueller's probe, a key plank of their defense.

 Former Trump campaign manager Paul Manafort arrives for arraignment on a third superseding indictment against him by Special Counsel Robert Mueller on charges of witness tampering, at U.S. District Court in Washington, U.S. June 15, 2018. REUTERS/Jonathan Ernst/File Photo

As part of his guilty plea, Gates acknowledged routinely dealing with accountants in the preparation of Manafort's tax returns and misleading them with false information, although he said he did so with Manafort's knowledge.

"It is critical for the government to show that the returns were prepared based on information of which Manafort was personally aware," said David Axelrod, a former federal prosecutor who is now a partner at Ohio-based law firm Shumaker, Loop & Kendrick.

"The government must prove that Manafort was complicit in whatever Gates said or did," he said.

Two witnesses - an executive at an upscale clothier and a retired general contractor - testified on Wednesday that invoices purporting to be bills from their companies to a company tied to Manafort appeared to be fake.

It was unclear who created the invoices or how they were used.

(Reporting by Nathan Layne in Alexandria, Virginia; Editing by Paul Tait)

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