Man Who Secretly Lent Paul Manafort $1 Million Has Finally Come Forward
Manafort’s Mystery Lender Steps Forward After Gaffe in Filing
(Bloomberg) -- Arjan “Ari” Zieger tried to keep it a secret. He worried what his investors and liberal friends might think.
At last, though, Zieger is stepping forward: He says he’s the mystery man behind a $1 million loan provided to the family of Paul Manafort, the former Trump campaign chairman who’s now sitting in federal prison.
One seven-digit loan might seem to be a footnote in the long, troubled story of Manafort, whom federal prosecutors have portrayed as a remorseless criminal.
But Zieger’s small role adds another piece to the complex puzzle of Manafort’s financial dealings, and it underscores Manafort’s desperation for cash as his business slumped and the feds closed in. Zieger’s failed bid to remain anonymous also shows the peril of doing business with someone who’s under an intense public glare, drawing government and media scrutiny to documents that might otherwise be filed and forgotten. Special Counsel Robert Mueller has fought in court for more information about the loan and its source.
The veil is coming off now thanks to a series of “very unintended and unforeseen situations,” as Zieger’s attorney describes them, including a botched redaction in a court filing and an ill-advised guest appearance by a crew member from “The Nutty Professor.”
“This thing has been very improbable,” said the lawyer, Keith Berglund.
Last month, as those clues led reporters to several of Zieger’s associates, he agreed to go public as the source of the Manafort loan. Until now, Zieger, a 56-year-old southern California businessman whose business ventures have included real estate and lending, has kept a low profile.
“Why cast a spotlight when you don’t need to?” Zieger asked.
The story started in the living room of another Californian -- a developer and movie producer named Scott Adler.
It was the spring of 2017. Manafort was trying to develop property in southern California. Through his property manager, Manafort reached out to Adler.
“Not that I was at all a Trump fan. Not at all. I just figured it would be kind of cool to meet the guy who ran the campaign,” Adler told Bloomberg News reporters in an interview at his hillside Los Angeles home, joined by Zieger and Berglund. The three men provided an outline of how the loan came about, with each offering details about his own role.
Adler recounted how, two years earlier and before Manafort’s legal troubles were widely known, he had hosted Manafort in the same room for an “incredible” two-hour discussion. “It was wonderful to talk to the guy. He seemed so assured of himself,” Adler said. “You got the sense he was the most honest man in the world.”
At the time, Manafort was between dramas. He’d left the Trump presidential campaign after reports surfaced about his consulting work for pro-Russia politicians in Ukraine, and few details about the fledgling federal investigation into Russian election interference had become public.
According to Adler, Manafort told him everything that he did was legal and that allegations of his Russian ties were a “hoax.” Manafort said that President Vladimir Putin of Russia hated him because he had pushed Ukraine, a former Soviet republic, to join the European Union.
Manafort, who is serving a seven-and-a-half-year prison sentence, couldn’t be reached for comment.
Mounting Debts
Adler and Manafort met again a few months later. Alder thinks it was June 2017, as reports emerged in the news media that Manafort was under scrutiny by Mueller, the freshly appointed special counsel.
Manafort’s political consulting business was ailing, and his legal costs looked sure to rise. He requested a loan.
Adler described him as “a little more apprehensive” this time but nonetheless confident that the government’s investigation wouldn’t amount to anything. “He was still adamantly saying, ‘There’s nothing here, but unfortunately I’ve got to hire attorneys and it’s expensive.’”
Adler called the loan a “great opportunity.” In the worst-case scenario, he surmised, the lender “could end up owning a condominium worth $4 million for a $1 million loan.”
But he ultimately decided against it, saying a better opportunity had come along.
At Manafort’s request, Adler mentioned the proposal to others including his friend and attorney, Berglund. The lawyer, in turn, brought the idea to Zieger, who also found the loan’s terms attractive.
Berglund negotiated on behalf of Zieger, who said he has never spoken to Manafort or his family.
Under the deal, the Manaforts pledged to repay the loan, which carried a robust 7.25% annual interest rate, in less than five months. They agreed to secure it with a condominium in Manhattan, at the edge of Chinatown, owned by the family and valued as high as $4.7 million. Manafort himself guaranteed the loan.
Enter Woodlawn
Zieger wanted to keep his name out of it, so he extended the loan to an entity owned by Manafort’s wife, using a Nevada company called Woodlawn LLC.
Zieger said he alone made the loan.
“We have clear title. We have everything that as a real estate lender you would look to,” said Zieger, who added that he didn’t vote for Trump (or Hillary Clinton) in 2016. “I thought it was a very strong package.”
The loan was issued in August 2017, just a couple of weeks after the FBI raided Manafort’s home.
As Manafort’s legal problems deepened, his family struggled to make the payments, according to court documents. He was convicted of bank and tax fraud at a trial brought by Mueller and then pleaded guilty to other crimes, agreeing to forfeit properties including the New York condominium.
At about the time of Manafort’s conviction, the lender began taking additional measures to remain anonymous -- but they backfired.
Hollywood Hand
According to Nevada state records, a California man named Joey Rappa was installed as Woodlawn’s publicly listed manager. A few months later, Woodlawn filed a petition with the court saying it had a “first priority security lien” on the New York condominium, and Rappa was listed as the company’s managing member. Woodlawn is seeking repayment on its loan balance, plus interest and fees, once the government sells the unit.
Berglund said he chose Rappa, who has worked previously as a crew member for “The Nutty Professor” and was once an assistant to Keanu Reeves, because of the “potential for public embarrassment” for the anonymous source of the loan, Berglund said. As far as he knew, Berglund said, Rappa had no ties to anyone of interest in the Mueller probe.
But it turns out he did. Rappa was working on a movie with a New York financier who is the cousin of a Russian oligarch -- both of whom were questioned by Mueller’s team. (Neither was involved in the Manafort loan, according to Berglund and their representatives).
Berglund said he learned that Rappa was making a movie with the financier, Andrew Intrater, only as he was being questioned by Bloomberg News in December.
A lawyer for Rappa, Christopher Clark, reiterated that his client had no involvement with the loan to Manafort. “It’s about time Bloomberg acknowledges Mr. Rappa has nothing to do with this loan, as we’ve told them all along,” Clark said. Rappa severed his ties with Woodlawn in December, after inquiries by Bloomberg News.
Asked for a comment, a spokesman for Intrater’s company, Columbus Nova, said: “How would you be mentioning him given the only relevance he has is the false relevance you created?” He didn’t respond further.
‘Sham Transaction’?
After news reports about the loan, Mueller’s prosecutors balked at Woodlawn’s claim on the condominium. Citing Manafort’s history of fraud, they asked whether it was a “sham transaction” and suggested that Woodlawn might be an “alter ego” for Manafort himself. The way to prove otherwise, the government said: Reveal the person behind the loan and provide additional documentation.
Another Woodlawn attorney, David Smith, dismissed the government’s claims as “paranoid nonsense” and has continued to fight efforts to publicly identify the source of the loan, arguing in court filings that the lender’s ties to Manafort could hurt his business and friendships in left-leaning Los Angeles.
Woodlawn still hasn’t told the government that Zieger is behind the loan, Berglund said.
A spokeswoman for the U.S. attorney’s office in the District of Columbia, which is now handling the matter, declined to comment.
Zieger’s anonymity took a hit in an April 4 court filing, in which Woodlawn offered evidence that the loan wasn’t a sham -- documents showing the loan was disbursed to the Manaforts, redacting the name of the company that provided the money.
In one of the documents, a name is visible through the black redaction bar: Momentum Capital LLC of Santa Monica, California. Zieger, in the interview, said the company was his, adding that he used it on occasion for the “transactional lending side” of some of his consulting companies.
“It was expeditious,” he said, explaining why he used Momentum for the transaction. “I never expected anyone to say, ‘Why are you doing it this way?’”
It wasn’t the only botched filing. A year earlier, the Manafort family lawyer who helped negotiate the loan had included an errant name -- Adler -- on document that was subsequently filed in court. The New Jersey lawyer, Bruce Baldinger, didn’t return a message seeking comment.
As the court case grinds on, the Manafort condo -- a 2,100-square-foot, three-bedroom unit on Baxter Street -- remains vacant. In March, the condo board filed a lien against Manafort’s daughter, Andrea, and a Manafort family company, Jesand LLC, seeking $18,545.95 in unpaid monthly charges.
Zieger still says the loan was a good deal, despite his battle with the government and his failure to remain anonymous.
“I certainly didn’t foresee us ending up in a situation where we’re are squaring off with the government,” he said.
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;Stephanie Baker in London at stebaker@bloomberg.net
To contact the editors responsible for this story: Jeffrey D Grocott at jgrocott2@bloomberg.net, David S. Joachim
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