Accounting
Manafort’s CPA Admits to Cooking the Books
Accountant Cindy Laporta testified that Gates had sent her backdated documents to reduce Manafort’s tax liability in support of the existence of such loans. In one instance, Laporta says that Manafort leaned on her to help when his bookkeeper wouldn’t.
Aug. 06, 2018
Testimony by one of the accountants of Paul Manafort, former campaign chairman of President Donald Trump, could land the businessman with ties to Russia in hot water before he faces arguably more serious charges of treason and other political wrongdoings. Currently, Manafort is on trial in Virginia for financial and tax fraud.
The case is being prosecuted by a team organized by Robert Mueller, the special counsel appointed to investigate allegations of interference in the 2016 U.S. presidential election by Russia.
Manafort is contending that any criminal conduct in his business dealings should be pinned on his long-time deputy, Rick Gates, while prosecutors are attempting to prove that Gates acted with the full knowledge, and under the direct instruction, of Manafort. The trial’s early stages have focused on efforts to disguise foreign income as loans.
Notably, accountant Cindy Laporta testified that Gates had sent her backdated documents to reduce Manafort’s tax liability in support of the existence of such loans. In one instance, Laporta says that Manafort leaned on her to help when his bookkeeper wouldn’t. Her assertions were supported by a series of emails.
Furthermore, Laporta cited a conference call with Gates in September 2015 when she says she was pressured to alter a tax document so that it would show a loan to Manafort. When Laporta and a colleague provided an assessment of Manafort’s tax liability, Gates responded that Manafort couldn’t afford to pay it. After some give-and-take, they settled on an amount of $900,000 to be classified as a loan.
Laporta is testifying under a grant of immunity. She acknowledged her wrongdoing in the cover-up, stating that her conduct was “inappropriate.” “You can’t pick and chose what’s a loan and what’s income,” she said. But Laporta claims she felt pressured into going along with the fraud because of Manafort’s standing.
“I could have called them liars,” Laporta said, referring to Manafort and Gates. “But Mr. Manafort was a longtime client of the firm, and I didn’t think I should do that.”
According to Laporta, this was just as one of several instances where she accepted questionable financial statements on behalf of Manafort or Gates. This included other “loans” that prosecutors are saying were designed to illegally conceal income
Prosecutors probed Laporta’s story at length as they tried to pierce Manafort’s defense that he left the tax and financial details of to others. Most of the evidence introduced thus far has pointed more squarely to Gates than Manafort. Gates will be taking his turn soon at the trial as the prosecutors’ “star witness.”
In addition, another one of Manafort’s accountants, Philip Ayliff, told jurors that Manafort denied that he controlled foreign bank accounts on multiple occasions. Ayliff says that is why Manafort didn’t report those accounts for the tax years in question. Manafort’s tax returns have not yet been introduced into evidence.
To this point, neither President Trump nor Russia, nor any connection between the Trump administration and Russia’s involvement in the election, have been mentioned. But you can expect plenty of fireworks in the weeks to come. Stay tuned.