Judge refuses to dismiss ex-Trump campaign chief's money laundering charge

[June 23, 2018]  By Sarah N. Lynch

WASHINGTON (Reuters) - A federal judge on Friday dealt another blow to U.S. President Donald Trump's former campaign chairman Paul Manafort, refusing to dismiss a money laundering charge brought against him by Special Counsel Robert Mueller.

U.S. District Judge Amy Berman Jackson's ruling was the latest setback for Manafort, whose charges stem from Mueller's ongoing investigation into Russia's role in the 2016 U.S. presidential election. Jackson a week ago ordered Manafort jailed pending trial after Mueller filed fresh charges against him over alleged witness tampering while he was under house arrest.

Manafort is facing separate indictments in Washington and Virginia, with charges ranging from conspiring to launder money and failing to register as a foreign agent for the former pro-Russia Ukrainian government, to bank and tax fraud.

He has pleaded not guilty to the charges, none of which are related his work on Trump's 2016 campaign. His Washington trial is due to begin in September and his Virginia trial in July.

Mueller, whose investigation could threaten Trump's presidency, is investigating whether the president's 2016 campaign colluded with Moscow and whether Trump has unlawfully sought to obstruct the Russia probe. Trump has called Mueller's investigation a witch hunt and has denied collusion.

The money laundering charge is among the most serious Manafort faces, as it carries stiffer penalties and subjects him to asset forfeiture. Money laundering charges brought against a defendant must be pegged to an underlying criminal offense such as bribery or defrauding a bank.

Prosecutors said Manafort laundered illegal proceeds he generated by lobbying for Ukraine without registering as a foreign agent with the U.S. government as required by law.

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

Manafort's attorneys called the prosecution's money laundering legal theory flawed because failing to register as a foreign agent did not generate financial proceeds. His lawyers said the law at issue does not prohibit foreign lobbying, instead prohibiting the failure to register as a lobbyist.

The judge also rejected a bid by Manafort's lawyers to prevent asset forfeiture based on the money laundering charge.

"These laws are not just about paperwork; their object is to ensure that no person acts to advance the interests of a foreign government or principal within the United States unless the public has been properly notified of his or her allegiance," Jackson wrote.

A Manafort spokesman declined comment on Jackson's action.

Jackson's ruling came a day after she denied a separate motion by Manafort to suppress evidence seized by the FBI in a storage locker.

(Reporting by Sarah N. Lynch; Editing by Steve Orlofsky and Will Dunham)

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