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Manafort Pleads Not Guilty to N.Y. Charges Designed to Thwart a Trump Pardon Manafort Pleads Not Guilty to N.Y. Charges Designed to Thwart a Trump Pardon
(about 4 hours later)
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Paul J. Manafort, President Trump’s former campaign chairman, pleaded not guilty on Thursday to mortgage fraud and other charges brought by the Manhattan district attorney in an effort to ensure Mr. Manafort could still face prison time if he is pardoned for his federal crimes. Paul J. Manafort, President Trump’s former campaign manager, was escorted into a courtroom on Thursday to face state fraud charges that the Manhattan district attorney has brought in an effort to ensure Mr. Manafort could still face prison time even if he is pardoned for his federal crimes.
The state charges against Mr. Manafort include allegations that he falsified business records and engaged in a conspiracy to obtain millions of dollars in loans for several New York homes. Appearing in New York State Supreme Court on Thursday, Mr. Manafort, who once wore designer suits and commanded lucrative fees as a political consultant, wore navy blue scrubs, a loose brown belt and white sneakers, his hands shackled at his waist. He walked with a slight limp and had to be helped as he got into his seat.
Mr. Manafort’s lawyer has contended that the state indictment should be dismissed because his client has already been tried in federal court on charges based on some of the same conduct, and he should not be prosecuted a second time. “Not guilty,” he said when asked how he pleaded to the charges in a 16-count indictment that he falsified business records and engaged in a conspiracy to fraudulently obtain millions of dollars in loans for several residential properties in New York.
Appearing in New York State Supreme Court before Justice Maxwell Wiley, Mr. Manafort wore navy blue scrubs and white sneakers, his hands shackled at his waist. He walked with a slight limp and had to be helped into a seat. Mr. Manafort has been serving a seven-and-a-half-year sentence at a federal prison in Pennsylvania after being convicted of tax and bank fraud in two cases stemming from Special Counsel Robert S. Mueller III’s investigation into Russian interference in the 2016 election.
“Not guilty,” he said when asked how he pleaded to the charges. Outside the courthouse, Mr. Manafort’s lawyer, Todd Blanche, said he was filing a motion to dismiss the case on the ground the state indictment violated New York law regarding double jeopardy — the legal principle also enshrined in the United States Constitution that people may not be tried twice for the same crime.
Outside the courthouse, Mr. Manafort’s lawyer, Todd Blanche, said he was filing a motion to dismiss the case on the grounds the indictment violated state law regarding double jeopardy. “In our view, the laws in New York do not allow the people to do what they did in this case,” he said. The suspect loans at the heart of the Manhattan district attorney’s case were the basis for some of the counts in Mr. Manafort’s federal indictment in Virginia, for which he is now serving time.
Mr. Manafort has been serving a seven-and-a-half year sentence at a federal prison in Pennsylvania after being convicted of tax and bank fraud in two federal cases. Those cases were brought by the special counsel, Robert S. Mueller III, during his investigation into Russian interference in the 2016 election. “In our view, the laws in New York do not allow the people to do what they did in this case,” Mr. Blanche said.
Mr. Manafort, who worked for Mr. Trump’s 2016 presidential campaign, was brought to New York a week ago to face the state charges, which were filed in March. But the Manhattan district attorney, Cyrus R. Vance Jr., has expressed confidence that an exception to double jeopardy rules will apply in this case, and that his office will prevail on the question.
Normally, inmates awaiting court appearances on state charges would be held in the notorious Rikers Island jail complex. But Mr. Manafort was permitted to be held in the Manhattan Correctional Center, a federal prison, after the second-highest law enforcement official in the country intervened. The new charges, he said, involve “state criminal violations which strike at the heart of New York’s sovereign interests, including the integrity of our residential mortgage market.” The state’s case, he added, centers on “serious criminal charges for which the defendant has not been held accountable.”
Beyond the mortgage fraud case against Mr. Manafort, state authorities in New York also are pursuing several investigations focused on Mr. Trump, his associates and his business. These include civil inquiries into the Trump Organization’s insurance practices, real estate deals and the family’s charitable foundation. “No one is beyond the law in New York,” Mr. Vance said in a statement.
Mr. Trump has not said he intends to pardon his former campaign chairman, but he has often spoken of his power to do so and he has defended Mr. Manafort on a number of occasions, calling him a “brave man.” The president has broad power to issue pardons for federal crimes, but he has no such authority in state cases. Mr. Vance’s position got a boost last week, when the Supreme Court ruled that criminal defendants may be prosecuted for the same offenses in both federal and state court. Since Mr. Trump’s pardon power extends only to federal crimes, the ruling leaves people he pardons subject to state prosecutions.
The state charges against Mr. Manafort grew out of an investigation that began in 2017, when the office of the Manhattan district attorney, Cyrus R. Vance Jr., began examining loans Mr. Manafort received from two banks. Mr. Manafort, who ran Mr. Trump’s 2016 presidential campaign for five months, was brought to New York a week ago to face the charges. He was indicted by a Manhattan grand jury in March.
The 16-count indictment unveiled in March said the fraud occurred between December 2015 and January 2017, but contained few details. He was brought from the Manhattan Correctional Center, a federal prison near the court, to the district attorney’s office early Thursday to formally be arrested before his arraignment in the state case.
Several people with knowledge of the matter said the mortgage fraud charges stemmed from loans Mr. Manafort obtained or tried to obtain from Citizens Bank, based in Rhode Island, and Federal Savings Bank in Chicago. Normally, inmates awaiting court appearances on state charges would be held in the notoriously violent Rikers Island jail complex. But Mr. Manafort was permitted to be held in the federal prison instead, after the second-highest law enforcement official in the country intervened.
The loans were for properties on Howard Street in Lower Manhattan; on Union Street in Brooklyn Heights; and in Bridgehampton on Long Island, the people said. In an agreement with the district attorney’s office, he will be permitted to stay in federal detention throughout the New York case.
Mr. Manafort could face up to 25 years in New York State prison if convicted of the most serious charges in the indictment. Before a packed courtroom on Thursday, Mr. Manafort sat silently looking forward as his lawyers and an assistant district attorney, Christopher R. Conroy, conferred with Justice Maxwell Wiley about next steps. Mr. Manafort’s lawyers were given until early September to file their motions, and the next court date was set for Oct. 9.
Just before the state charges were announced, Mr. Manafort, 70, was sentenced in Virginia to nearly four years in prison on one of his two federal convictions. He was then sentenced in Washington, D.C., to serve an additional three and a half years on the other case. Mr. Manafort waived his right to be present at all pretrial proceedings, likely to reduce the number of times he would have to be transported from Pennsylvania to a cell in New York. But Justice Wiley reserved the right to bring him to New York as he saw fit.
The financial fraud charges at the heart of Mr. Vance’s case were the basis for some of the counts in the federal indictment in Virginia. Manhattan prosecutors had deferred their inquiry to avoid interfering with Mr. Mueller’s broader investigation into Russian meddling in the 2016 presidential election. The state charges against Mr. Manafort grew out of an investigation that began in 2017, when Mr. Vance began examining loans Mr. Manafort received from two banks.
“No one is beyond the law in New York,” said Mr. Vance in announcing the charges against Mr. Manafort on March 13. Court documents said the alleged fraud occurred between December 2015 and January 2017 and concerned loan negotiations with Citizens Bank, based in Rhode Island, Federal Savings Bank in Chicago and the Banc of California.
In the Virginia trial, Mr. Mueller’s prosecutors presented evidence that Mr. Manafort lied to obtain bank loans, evaded taxes and used foreign accounts to hide millions of dollars earned from his political consulting work in Ukraine. A month later, he pleaded guilty in the related federal case in Washington, D.C. The loans were for properties on Howard Street in SoHo; on Union Street in Carroll Gardens; and in Water Mill on Long Island, among others.
The convictions marked the end of a swift fall for Mr. Manafort, who once moved in elite circles and commanded large fees as a political consultant. He wore luxurious clothes, including a $33,000 blue lizard jacket and $12,000 suits. Mr. Manafort could face up to 25 years in state prison if convicted of the most serious charges in the indictment.
As part of a plea deal with federal prosecutors, Mr. Manafort forfeited five homes in New York, worth about $22 million, to the government. Last August, Mr. Manafort, 70, was convicted of various financial crimes in federal court in Virginia. At the trial, Mr. Mueller’s prosecutors presented evidence that he lied to obtain bank loans, evaded taxes and used foreign accounts to hide millions of dollars earned from his political consulting work in Ukraine.
The Fifth Amendment of the United States Constitution protects Americans from being tried twice for the same crime, a condition known as double jeopardy. The jury convicted him on eight of 18 felony counts. A month later, he pleaded guilty in the related federal case in Washington, D.C.
Mr. Vance’s office is expected to argue that an exception is warranted in Manafort’s case, and prosecutors in Mr. Vance’s office have expressed confidence that they will prevail, according to people with knowledge of the matter. In March, Mr. Manafort was sentenced in Virginia to nearly four years in prison on one of his two federal convictions. He was then sentenced in Washington to serve an additional three and a half years in the second case.
Shortly after, Mr. Vance announced Mr. Manafort’s indictment on the state charges, which had been deferred to avoid interfering with Mr. Mueller’s broader investigation into Russian meddling in the 2016 presidential election.
As part of a plea deal with federal prosecutors, Mr. Manafort forfeited five luxurious homes in New York, worth about $22 million, to the government. The mortgage fraud and other charges for which he was arraigned on Thursday were tied to some of these addresses.
Mr. Trump has not said he would pardon Mr. Manafort, who led his campaign in 2016, but he has defended Mr. Manafort on several occasions, calling him a “brave man.”
In May, the New York Legislature passed a bill that allows state prosecutors to pursue charges against any individual granted a presidential pardon for similar federal crimes, closing what state lawmakers considered a loophole that could be exploited by Mr. Trump to protect former associates.
In general, the president has broad power to issue pardons for federal crimes, but has no such authority in state cases. The new law would clarify that even New York criminal cases based on conduct pardoned by the president could proceed.
Victoria Bekiempis and William K. Rashbaum contributed reporting.Victoria Bekiempis and William K. Rashbaum contributed reporting.