California Man Doesn’t Want Neighbors to Know He Lent Paul Manafort $1 Million
California Man Doesn't Want Neighbors to Know He Lent Paul Manafort $1 Million
(Bloomberg) -- A Southern California man is so worried he’ll be ostracized by friends and business associates for lending money to President Donald Trump’s former campaign chief that he’s fighting U.S. prosecutors’ demand that he reveal his identity, according to a new court filing.
The lender is “a U.S. citizen residing in Southern California, where President Trump is highly unpopular,” according to the filing on Thursday in response to a request by Special Counsel Robert Mueller’s prosecutors. They are asking a Nevada company, Woodlawn LLC, to identify the ultimate source of $1 million that it lent to the family of Paul Manafort, the ex-campaign chairman.
“It is well known that friendships and other relationships have shattered over political views in our current ‘tribal’ society,” and so the man doesn’t want his name made public, Woodlawn’s lawyer, David Smith, wrote.
The filing is the latest turn in a bizarre footnote to the Manafort saga.
Woodlawn was created in early August 2017 as Manafort was being investigated by the FBI. It executed the loan, secured by the family’s condominium on Baxter Street in Manhattan, shortly after. As part of his guilty plea to conspiracy charges in September, Manafort agreed to forfeit the condo and other properties to the government.
In November, Woodlawn filed a petition seeking to enforce its lien on the property. Mueller’s office won’t recognize the lien until Woodlawn discloses who’s behind the loan.
Loan Fraud
Citing Manafort’s history of loan fraud, Mueller’s prosecutors raised the possibility that the loan was a “sham transaction” in which no repayment was expected. They also suggest that Woodlawn could be an “alter ego” for Manafort and that he may have used Woodlawn to make a fake loan to himself, perhaps in order to keep the money from the government.
Representatives of Manafort have declined to comment on the loan.
Prosecutors asked U.S. District Judge Amy Berman Jackson in Washington for permission to take as many as nine depositions and seek additional documents from Woodlawn.
In its latest filing, Woodlawn said that the transaction was legitimate and that it’s willing to disclose the lender’s identity to prosecutors as long as the information doesn’t become public.
“Woodlawn’s principal is effectively a target of a law enforcement investigation now, although he should not be,” Smith wrote. “At the same time, he has been and remains extremely concerned that if his identity is revealed to the public, he will suffer grave damage to his business and personal relationships due to the unpopularity of President Trump and anyone closely associated with the president, such as Paul Manafort, in California, where he lives and does business.”
Smith also condemned efforts by Mueller’s team to seek more information about the source of the loan, saying that the special counsel’s arguments were “misleading and/or frivolous on many levels” and that its request for additional information was “grossly disproportionate, burdensome and expensive.”
Woodlawn provided documents to show that cash was actually disbursed and that the Manaforts repaid part of it.
A Justice Department spokesman declined to comment.
The Woodlawn matter is among the leftover strands from the special counsel investigation into Russian election interference that wrapped up last month. They are now being handled by other Justice Department units. Many of Mueller’s prosecutors remain at the Justice Department.
In January, Bloomberg News reported that Woodlawn in 2018 installed a Hollywood bit player named Joey Rappa as its publicly listed managing member. The loan’s backer or backers wanted to remain anonymous because of the “potential for public embarrassment” of Manafort’s legal woes, Keith Berglund, an attorney for Woodlawn, told Bloomberg in December.
Manafort, 70, was convicted in August of tax and bank fraud, then pleaded guilty in September in another case in which he agreed to forfeit property. He was sentenced to 7 1/2 years in prison.
To contact the reporters on this story: Andrew Martin in New York at amartin146@bloomberg.net;David Glovin in New York at dglovin@bloomberg.net
To contact the editors responsible for this story: Jeffrey D Grocott at jgrocott2@bloomberg.net, David S. Joachim, Steve Stroth
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