Special Counsel Robert Mueller could not have sent a clearer message to Paul Manafort when FBI agents picked the lock on the front door of Manafort’s apartment in Alexandria, Virginia on July 26th and executed a search warrant of the entire apartment, including his computer files. Among other things, the federal agents were looking for evidence of offshore bank accounts that Manafort may have used to launder money that he received from Ukrainian and Russian sources. A federal prosecutor then informed Manafort, in no uncertain terms, that he was going to be indicted.
Such shock and awe tactics are usually employed by federal agents in organized crime or drug-related cases, where the targets are known to be armed and dangerous, or where there is a real possibility that critical evidence, such as narcotics, will be flushed down the toilet if a federal agent politely knocks on the front door and patiently waits to be admitted. Clearly, the Special Counsel’s Office has lost its patience with Mr. Manafort, who had ample time to offer up a full chronology of his longstanding relationships with Russian and pro-Russian autocrats and oligarchs, and his efforts to harness those Russian-connections on behalf of the Trump Campaign and Presidency. Manafort, however, refused to cooperate, believing that either the U.S. Justice Department would never fully uncover his role in the Russian/Trump affair, or that President Trump would pardon him before he had to serve any hard prison time for his involvement. Only time will tell.
One of Manafort’s major misjudgments over the course of many years was that he did not take very seriously his obligations to register under the Foreign Agents Registration Act (FARA), which he ignored even though he was representing several foreign entities, including then-President Viktor Yanukovich of Ukraine, the Russia-aligned Party of Regions in Ukraine, and companies associated with Ukrainian-oligarch Dimitri Firtash, and Russian oligarch Oleg Deripaska. Inexplicably, neither Manafort nor his consulting firm – DMP International – ever filed under FARA in a timely manner, even though they were lobbying heavily in Washington to improve U.S. relations with the pro-Russian Ukrainian government and to lift U.S. economic and financial sanctions on Russia. Hand-written ledgers uncovered in Ukraine after Yanukovich fled the country for Moscow in February-March of 2014 after the Maiden uprising showed that Manafort had received over $12.7 million in cash for his services to the pro-Russian regime in that country, and Manafort received additional payments through the European Centre for a Modern Ukraine in Brussels, a so-called think tank closely linked to the pro-Russian Ukrainian political party led by Yanukovich.
Manafort made a serious mistake when he ignored FARA, which has been on the books since 1938 when it was passed to combat foreign agents operating in the U.S. who were spreading Nazi propaganda. The disclosure requirements are more stringent than domestic lobbying disclosure requirements, and the penalties can carry up to a five-year prison term. It is also possible that the Special Counsel’s office can also invoke the provisions of Title 18 of the United States Code, Section 2381, which provides, in part, that “Whoever …[gives enemies of the United States] aid and comfort … is guilty of treason and shall suffer death….” Although it is unlikely that Manafort would ultimately be charged with treason, such a big stick can be wielded used by federal prosecutors to persuade a reluctant target such as Manafort to tell all that he knows about possible collusion between the Russians and the Trump team.
Manafort apparently was also unaware that U.S. agents were listening in on his phone conversations from at least 2014 until this year, and that to the extent he discussed his Russian contacts with President Trump, those conversations were also captured pursuant to warrants issued under the Foreign Intelligence Surveillance Act (FISA) during the period from 2014 until 2016, and then renewed during the Presidential campaign in the summer of 2016. The first FISA warrant was issued in early 2014 after the fall of the Yanukovich Regime in February-March 2014, when a treasure-trove of documents revealing the extent of Manafort’s pro-Russian and anti-American activities in Ukraine and Russia were recovered.
In addition, the FBI and Justice Department prosecutors had available to them information disclosed in a civil RICO case brought during the 2011 to 2014 time-frame by my law firm on behalf of former Ukraine Prime Minister Yulia Tymoshenko. This civil complaint, which was filed in federal court in Manhattan, was brought against Yanukovich, Firtash and Manafort, disclosing specific details regarding Manafort’s money laundering activities though New York and offshore bank accounts on behalf of Yanukovich, Firtash, Oleg Deripaska and Semion Mogilevich, the undisputed head of Russian organized crime. The documents disclosed in this civil RICO case, as well as other documents and information gathered by the FBI, were then used by the U. S. Attorneys’ Office for the Southern District of New York to launch a federal investigation of Manafort and provided part of the evidentiary basis to meet the high standards required for the issuance of the 2014 FISA warrant relating to Manafort.
After Trump fired Preet Bharara, the U.S. Attorney in New York whose office was handling the federal investigation of Manafort, and after Robert Mueller, Jr. was named as Special Counsel to the U.S. Justice Department following Trump’s firing of James Comey as FBI Director, the investigation of Manafort was transferred to the Office of the Special Counsel, where it is being pursued with even greater intensity.
Paul Manafort is only now learning the harsh reality that he never thought possible, which is that the U.S. Dept. of Justice would actually take a serious look at his previously unreported services for various foreign hostile powers, tax evasion and money laundering activities, and that he would be unable to work out an immunity deal with the federal prosecutors that would allow him to go scot-free. Only time will tell whether a Trump pardon can save him, which may not happen if the investigation by New York Attorney General Eric Schneiderman leads to completely separate tax evasion and money laundering charges against Manafort that are beyond the reach of Trump’s pardon powers.