Paul Manafort (Photographer: Patrick Fallon/Bloomberg)

Manafort Charged in New York Just After Federal Sentencing

(Bloomberg) -- Just minutes after his federal prison sentence was raised to 7 1/2 years, Paul Manafort was charged by New York state prosecutors with residential mortgage fraud, conspiracy and falsifying business records.

President Donald Trump has no pardon powers over state crimes, and the move by Manhattan District Attorney Cyrus Vance Jr. raises the prospect of a third criminal conviction for Trump’s one-time campaign manager.

It’s the latest entry in Manafort’s criminal saga, one that’s stretched from Ukraine to Brooklyn with allegations of money laundering, high living and witness tampering, while advising eastern European autocrats on how to stay in power. After one federal judge came down on the light end of a possible sentence citing his “otherwise blameless life” last Thursday, another judge Wednesday lashed into him for copious deceit and trying to game the system.

Vance has been investigating Manafort since March 2017, before Special Counsel Robert Mueller was appointed to investigate possible Russian interference in the 2016 campaign and any related matter. With Vance’s dramatic announcement, Manafort now faces the possibility of additional years in a state prison that could be much harsher than what he gets in the federal system.

One hurdle for prosecutors is likely to be a state law that protects state defendants from being charged twice for the same actions. Vance’s team has examined the nuances of the law and expects the case to survive such a challenge.

Legal analysts have said state cases could act as an insurance policy for justice. Trump has bemoaned Manafort’s treatment at the hands of Mueller and has said that he has not ruled out a pardon. Trump has frequently talked of his broad pardon power, possibly extending even to himself, and acted to liberate two political allies previously.

Manafort Charged in New York Just After Federal Sentencing

The New York charges are narrower than those brought by Mueller, who wrapped up his work against Manafort on Wednesday when a Washington judge added more than three years to the four years imposed by a judge in Virginia last week.

‘Sovereign Interests’

Manafort’s alleged state crimes “strike at the heart of New York’s sovereign interests, including the integrity of our residential mortgage market,” Vance said. They’re “serious criminal charges for which the defendant has not been held accountable.”

The first five counts, based on residential mortgage fraud, involve Manafort’s attempts to use his property on Howard Street in Manhattan’s SoHo neighborhood to secure a bank loan.

According to the indictment, Manafort urged two associates, believed to be his daughter and then-son-in-law, to make sure they were present at the luxury apartment when the appraiser came by, to create the impression that the SoHo apartment was a residence, not an investment property.

Manafort’s lawyers are likely to argue that prosecutors are piling onto the 69-year-old and that the New York case should be dismissed on double jeopardy grounds. Kevin Downing, who has represented Manafort, didn’t answer questions outside the Washington courthouse about the state action.

New York Protections

New York’s law provides protections for defendants even stronger than those guaranteed by the U.S. Constitution’s Fifth Amendment. Vance’s office has identified several areas where it believes Manafort can be safely charged with state offenses.

“I don’t see a double jeopardy problem,” said Duncan Levin of Tucker Levin PLLC, a former federal prosecutor who also worked in the DA’s office under Vance. “The indictment deals with activity that happened in New York and is appropriate for a New York prosecutor. The only common denominator is the defendant.”

Manafort Charged in New York Just After Federal Sentencing

In one of the two cases Mueller brought against Manafort, he was accused of lying to Citizens Bank to obtain mortgage loans on properties in Manhattan and Brooklyn, and to Federal Savings Bank for loans related to his properties in Brooklyn and Bridgehampton, New York. For instance, he falsely represented the amount of debt he had to Citizens Bank and that his Soho condominium wasn’t a rental but rather was used by his daughter and son-in-law, the special counsel’s prosecutors said.

Yankees Tickets

Manafort also provided doctored financial documents about his company to Federal Savings Bank, overstating his income by millions of dollars, they said. He also lied to the bank by saying he had lent his credit card to a friend who had incurred more than $200,000 in charges related to Yankees tickets.

According to Vance’s indictment, Manafort asked an associate -- his longtime business partner Rick Gates and one-time co-defendant -- to sign a letter claiming that he bought the tickets. At the time, Manafort was trying to get a loan from Federal Savings Bank in Chicago. The American Express charge would complicate Manafort’s loan application, Mueller’s team had said last summer, describing the Gates letter as an example of bank fraud. However that incident wasn’t the basis of any of Mueller’s federal charges.

Gates had been charged alongside Manafort but later pleaded guilty and agreed to cooperate with prosecutors. He is continuing to aid in multiple investigations.

©2019 Bloomberg L.P.