Manafort Reported $10 Million Loan From Russian Oligarch in 2010

(Bloomberg) -- Documents unsealed this week show that Paul Manafort and his wife acknowledged on a 2010 tax return that they owed $10 million to a Russian oligarch with close ties to the Kremlin.

The disclosure, contained in partially unredacted versions of search warrant applications filed last year in federal court in Alexandria, Virginia, offers fresh details of Manafort’s dealings with the oligarch, Oleg Deripaska, and his business interests in Ukraine.

Investigators executed the search warrants to enter Manafort’s storage locker in May 2017. Two months later, FBI agents searched Manafort’s home in Alexandria.

Click here to read the warrant application

Manafort faces trial in Virginia on July 25 on bank- and tax-fraud charges. At a hearing there on Friday, a judge will consider whether FBI agents improperly conducted their searches of Manafort’s premises. The judge will also consider whether prosecutors improperly leaked grand jury information about Manafort.

Manafort faces a separate trial in Washington on Sept. 17. He’s accused there of violating the Foreign Agents Registration Act by failing to disclose his lobbying work for the Ukraine government, as well as money laundering and obstruction of justice.

Shell Company

The tax disclosure by John Hannah LLC, a shell company controlled by the Manaforts, links Manafort’s wife for the first time to his dealings with Russians and Ukrainians. The search of Manafort’s storage locker turned up evidence showing that the $10 million came from Deripaska, the filing said.

Manafort and Deripaska had a falling out in 2008 over a deal to buy a cable company in Ukraine. Lawsuits filed by Deripaska in 2014 describe how Manafort’s deputy, Rick Gates, failed to respond to requests for information on the investment around the same time. In September 2010, Deripaska asked Gates to account for the $18.9 million he’d invested, but the report was never delivered, according to court documents.

Gates has pleaded guilty to lying to investigators and conspiracy, and he’s cooperating with the special counsel’s investigation into possible collusion between the Trump campaign and Russia.

Manafort told the FBI in July 2014 that he had performed “significant work” for Deripaska and Ukrainian billionaire Rinat Akhmetov, according to the filing.

Russia Contract

Deripaska and Manafort have repeatedly said that their relationship was strictly about business and ended long ago. In March last year, Manafort dismissed a report by the Associated Press that he’d been hired by Deripaska as early as 2005 to advance Russian political interests in a contract worth $10 million.

Manafort told the AP last year that he worked with Deripaska “almost a decade ago representing him on business and personal matters in countries where he had investments.” A Deripaska representative echoed that statement saying Manafort had been hired to provide “investment consulting services” related to his business interests. Deripaska unsuccessfully sued AP over the article last year.

The search warrant application also depicts Manafort as a man struggling with debt in 2016. He racked up a $300,000 bill on his American Express card, which he said was because he let a friend use the card to buy New York Yankees season tickets.

In September 2016, someone wrote in an email -- the names are blacked out on the affidavit -- “What the hell he just took the loan out at the end of August how can he be $1,000,000 off?” To which, someone else replied: “He is so in debt.”

In January, Deripaska sued Manafort in New York, claiming money he gave him for the Ukrainian deal had vanished. Including fees, Deripaska said he paid Manafort more than $26 million.

The cases are In the Matter of the Search of, 1:17-sw-00449 and 1:17-sw-00294, U.S. District Court, Eastern District of Virginia (Alexandria).

©2018 Bloomberg L.P.

Bloomberg
Follow All The Political News In India On BloombergQuint