Alexandria, Virginia (CNN)Former Trump campaign chairman Paul Manafort‘s longtime bookkeeper testified Thursday that Manafort was in serious financial trouble in 2016 after his lobbying business dried up, and he and his deputy Rick Gates sent several fake, inflated income business statements to banks.
The third day of the Manafort trial saw the prosecution shift from describing Manafort’s lavish lifestyle — new details Thursday included a $10,000 karaoke machine and the “biggest pond in the Hamptons” — to the core of their case: alleged tax and banking crimes committed when Manafort desperately needed money.
Bookkeeper Heather Washkuhn told jurors that Manafort sent a financial statement to Federal Savings Bank saying his company had made $3 million the first nine months of 2016, when his firm had actually lost more than $1 million the first 11 months of that year.
In another instance, Washkuhn said Manafort’s company made $400,000, but then Manafort told Banc of California it made almost $4.5 million.
“There’s a lot of changes,” Washkuhn said. “There’s about a $4 million difference.”
Washkuhn also said Rick Gates, Manafort’s business partner who is now a prosecution witness, repeatedly asked her to change old financial statements to show additional income, and requested copies of financial statements that could be edited. Gates became upset when Washkuhn said she couldn’t sent him pdf documents as Microsoft Word files, which are more easily altered, she testified.
Jurors also heard from an accountant who prepared Manafort’s taxes, who testified that Manafort never told them that he had foreign bank accounts. That’s a question asked on IRS tax forms, and it’s a crime to hide foreign bank accounts from the US government.
“We had asked the question, and the response was no,” said accountant Philip Ayliff.
Manafort is charged with 18 counts of tax and banking crimes, including failing to report foreign accounts on his tax forms.
He has pleaded not guilty to all charges, and the trial is clearly on the mind of his former boss, President Donald Trump, who tweeted several times about the case on Wednesday. While Manafort’s case isn’t about the 2016 campaign, he’s the first defendant Mueller’s team has taken to trial, and the outcome could affect public opinion of the special counsel investigation the President has called a “witch hunt.”