Superseding Indictment of Manafort and Gates
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
|
UNITED STATES OF AMERICA
PAUL J. MANAFORT, JR., and RICHARD W. GATES III,
|
Crim. No. 17-201 (ABJ) |
STATUS REPORT
The United States of America, by and through Special Counsel Robert S. Mueller, III, respectfully submits this status report to apprise the Court of a recent development related to this matter.
1. On Thursday, February 22, 2018, a grand jury sitting in the Eastern District of Virginia, filed a 32-count indictment charging defendants Paul J. Manafort, Jr., and Richard W. Gates III as follows:
| Count | Charge | Defendant |
| 1 | Subscribing to False United States Individual Income Tax Returns (2010) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Manafort |
| 2 | Subscribing to False United States Individual Income Tax Returns (2011) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Manafort |
| 3 | Subscribing to False United States Individual Income Tax Returns (2012) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Manafort |
| 4 | Subscribing to False United States Individual Income Tax Returns (2013) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Manafort |
| 5 | Subscribing to False United States Individual Income Tax Returns (2014) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Manafort |
| Count | Charge | Defendant |
| 6 | Assisting in the Preparation of False United States Individual Income (2010) (26 U.S.C. § 7206(2)) |
Gates |
| 7 | Assisting in the Preparation of False United States Individual Income (2011) (26 U.S.C. § 7206(2)) |
Gates |
| 8 | Assisting in the Preparation of False United States Individual Income (2012) (26 U.S.C. § 7206(2)) |
Gates |
| 9 | Assisting in the Preparation of False United States Individual Income (2013) (26 U.S.C. § 7206(2)) |
Gates |
| 10 | Assisting in the Preparation of False United States Individual Income (2014) (26 U.S.C. § 7206(2)) |
Gates |
| 11 | Failure To File Reports Of Foreign Bank And Financial Accounts (2011) (31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. § 2) |
Manafort |
| 12 | Failure To File Reports Of Foreign Bank And Financial Accounts (2012) (31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. § 2) |
Manafort |
| 13 | Failure To File Reports Of Foreign Bank And Financial Accounts (2013) (31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. § 2) |
Manafort |
| 14 | Failure To File Reports Of Foreign Bank And Financial Accounts (2014) (31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. § 2) |
Manafort |
| 15 | Subscribing to False United States Individual Income Tax Returns (2010) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Gates |
| 16 | Subscribing to False United States Individual Income Tax Returns (2011) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Gates |
| 17 | Subscribing to False United States Individual Income Tax Returns (2012) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Gates |
| 18 | Subscribing to False United States Individual Income Tax Returns (2013) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Gates |
| 19 | Subscribing to False United States Individual Income Tax Returns | Gates |
| Count | Charge | Defendant |
| (2014) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
||
| 20 | Subscribing to a False Amended United States Individual Income Tax Return (2011) (26 U.S.C. § 7206(1); 18 U.S.C. § 2) |
Gates |
| 21 | Failure To File Reports Of Foreign Bank And Financial Accounts (2011) (31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. § 2) |
Gates |
| 22 | Failure To File Reports Of Foreign Bank And Financial Accounts (2012) (31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. § 2) |
Gates |
| 23 | Failure To File Reports Of Foreign Bank And Financial Accounts (2013) (31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. § 2) |
Gates |
| 24 | Bank Fraud Conspiracy (Lender B/$3.4 million loan) (18 U.S.C. § 1349) |
Manafort Gates |
| 25 | Bank Fraud (Lender B/$3.4 million loan) (18 U.S.C. §§ 1344, 2) |
Manafort Gates |
| 26 | Bank Fraud Conspiracy (Lender C / $1 million loan) (18 U.S.C. § 1349) |
Manafort Gates |
| 27 | Bank Fraud (Lender C / $1 million loan) (18 U.S.C. § 1344, 2) |
Manafort Gates |
| 28 | Bank Fraud Conspiracy (Lender B / $5.5 million loan) (18 U.S.C. § 1349) |
Manafort Gates |
| 29 | Bank Fraud Conspiracy (Lender D / $9.5 million loan (18 U.S.C. § 1349) |
Manafort Gates |
| 30 | Bank Fraud (Lender D / $9.5 million loan) (18 U.S.C. §§ 1344, 2) |
Manafort Gates |
| 31 | Bank Fraud Conspiracy (Lender D / $6.5 million loan) (18 U.S.C. § 1349) |
Manafort Gates |
| 32 | Bank Fraud (Lender D / $6.5 million loan) (18 U.S.C. §§ 1344, 2) |
Manafort Gates |
2. A copy of the indictment returned in the Eastern District of Virginia is attached (redacted to omit the signature of the foreperson).
3. The Special Counsel’s Office proceeded before the Grand Jury in the Eastern District of Virginia because, based on our current evidence, venue for these charges does not exist in the District of Columbia. Prior to instituting this criminal action, the Special Counsel’s Office met with defense counsel to go over the proof underlying the bank fraud charges (the tax charges were already the subject of charges before this Court) and to provide counsel an opportunity to present any arguments as to why these charges should not be brought. The Special Counsel's Office also alerted defense counsel for each defendant that the government was prepared to bring all of the charges before a Grand Jury in the District of Columbia, if the defendants were willing to waive venue (since otherwise we could not do so legally). If venue had been waived, the defendants would have faced a single indictment in one district, and not two indictments in adjacent districts. One defendant elected, as is his right, not to waive venue. The Special Counsel's Office accordingly has proceeded in the Eastern District of Virginia.
Respectfully submitted,
ROBERT S. MUELLER III
Special Counsel
Dated: February 22, 2018
By:
Andrew Weissmann
Greg D. Andres (D.D.C. Bar No. 459221)
Kyle R. Freeny
U.S. Department of Justice
Special Counsel's Office
950 Pennsylvania Avenue NW
Washington, DC 20530
Telephone: (202) 616-0800
Attorneys for the United States of America
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
|
UNITED STATES OF AMERICA
PAUL J. MANAFORT, JR.,
RICHARD W. GATES III,
|
* |
|
|
|
* |
COUNT 26: 18 U.S.C. §§ 1349 and 3551 et seq. |
*****
SUPERSEDING INDICTMENT
February 2018 Term – At Alexandria, Virginia
THE GRAND JURY CHARGES THAT:
Introduction
At all times relevant to this Superseding Indictment:
1. Defendants PAUL J. MANAFORT, JR. (MANAFORT) and RICHARD W. GATES III (GATES) served for years as political consultants and lobbyists. Between at least 2006 and 2015, MANAFORT and GATES acted as unregistered agents of a foreign government and foreign political parties. Specifically, they represented the Government of Ukraine, the President of Ukraine (Victor Yanukovych, who was President from 2010 to 2014), the Party of Regions (a Ukrainian political party led by Yanukovych), and the Opposition Bloc (a successor to the Party of Regions after Yanukovych fled to Russia).
2. MANAFORT and GATES generated tens of millions of dollars in income as a result of their Ukraine work. From approximately 2006 through the present, MANAFORT and GATES engaged in a scheme to hide income from United States authorities, while enjoying the use of the money. During the first part of the scheme between approximately 2006 and 2015, MANAFORT, with GATES’ assistance, failed to pay taxes on this income by disguising it as alleged “loans” from nominee offshore corporate entities and by making millions of dollars in unreported payments from foreign accounts to bank accounts they controlled and United States vendors. MANAFORT also used the offshore accounts to purchase United States real estate, and MANAFORT and GATES used the undisclosed income to make improvements to and refinance their United States properties.
3. In the second part of the scheme, between approximately 2015 and at least January 2017, when the Ukraine income dwindled after Yanukovych fled to Russia, MANAFORT, with the assistance of GATES, extracted money from MANAFORT’s United States real estate by, among other things, using those properties as collateral to obtain loans from multiple financial institutions. MANAFORT and GATES fraudulently secured more than twenty million dollars in loans by falsely inflating MANAFORT’s and his company’s income and by failing to disclose existing debt in order to qualify for the loans.
4. In furtherance of the scheme, MANAFORT and GATES funneled millions of dollars in payments into numerous foreign nominee companies and bank accounts, opened by them and their accomplices in nominee names and in various foreign countries, including Cyprus, Saint Vincent & the Grenadines (Grenadines), and the Seychelles. MANAFORT and GATES hid the existence and ownership of the foreign companies and bank accounts, falsely and repeatedly reporting to their tax preparers and to the United States that they had no foreign bank accounts.
5. In furtherance of the scheme, MANAFORT used his hidden overseas wealth to enjoy a lavish lifestyle in the United States, without paying taxes on that income. MANAFORT, without reporting the income to his tax preparer or the United States, spent millions of dollars on luxury goods and services for himself and his extended family through payments wired from offshore nominee accounts to United States vendors. MANAFORT also used these offshore accounts to purchase multi-million dollar properties in the United States and to improve substantially another property owned by his family.
6. In furtherance of the scheme, GATES used millions of dollars from these offshore accounts to pay for his personal expenses, including his mortgage, children’s tuition, and interior decorating and refinancing of his Virginia residence.
7. In total, more than $75,000,000 flowed through the offshore accounts. MANAFORT, with the assistance of GATES, laundered more than $30,000,000, income that he concealed from the United States Department of the Treasury (Treasury), the Department of Justice, and others. GATES obtained more than $3,000,000 from the offshore accounts, income that he too concealed from the Treasury, the Department of Justice, and others.
Relevant Individuals And Entities
8. MANAFORT was a United States citizen. He resided in homes in Virginia, Florida, and Long Island, New York.
9. GATES was a United States citizen. He resided in Virginia.
10. In 2005, MANAFORT and another partner created Davis Manafort Partners, Inc. (DMP) to engage principally in political consulting. DMP had staff in the United States, Ukraine, and Russia. In 2011, MANAFORT created DMP International, LLC (DMI) to engage in work for foreign clients, in particular political consulting, lobbying, and public relations for the Government of Ukraine, the Party of Regions, and members of the Party of Regions. DMI was a partnership solely owned by MANAFORT and his spouse. GATES worked for both DMP and DMI and served as MANAFORT’s right-hand man.
11. The Party of Regions was a pro-Russia political party in Ukraine. Beginning in approximately 2006, it retained MANAFORT, through DMP and then DMI, to advance its interests in Ukraine, the United States, and elsewhere, including the election of its slate of candidates. In 2010, its candidate for President, Yanukovych, was elected President of Ukraine. In 2014, Yanukovych fled Ukraine for Russia in the wake of popular protests of widespread governmental corruption. Yanukovych, the Party of Regions, and the Government of Ukraine were MANAFORT, DMP, and DMI clients.
12. MANAFORT and GATES owned or controlled the following entities, which were used in the scheme (the MANAFORT–GATES entities):
Domestic Entities
| Entity Name | Date Created | Incorporation Location |
| Bade LLC (RG) | January 2012 | Delaware |
| Entity Name | Date Created | Incorporation Location |
| Daisy Manafort, LLC (PM) | August 2008 March 2011 |
Virginia Florida |
| Davis Manafort International LLC (PM) | March 2007 | Delaware |
| DMP (PM) | March 2005 March 2011 |
Virginia Florida |
| Davis Manafort, Inc. (PM) | October 1999 November 1999 |
Delaware Virginia |
| DMI (PM) | June 2011 March 2012 |
Delaware Florida |
| Global Sites LLC (PM, RG) | July 2008 | Delaware |
| Jemina LLC (RG) | July 2008 | Delaware |
| Jesand Investment Corporation (PM) | April 2002 | Virginia |
| Jesand Investment Corporation (PM) | March 2011 | Florida |
| John Hannah, LLC (PM) | April 2006 March 2011 |
Virginia Florida |
| Jupiter Holdings Management, LLC (RG) | January 2011 | Delaware |
| Lilred LLC (PM) | December 2011 | Florida |
| LOAV Ltd. (PM) | April 1992 | Delaware |
| MC Brooklyn Holdings, LLC (PM) | November 2012 | New York |
| MC Soho Holdings, LLC (PM) | January 2012 April 2012 |
Florida New York |
| Smythson LLC (also known as Symthson LLC) (PM, RG) | July 2008 | Delaware |
Cypriot Entities
| Entity Name | Date Created | Incorporation Location |
| Actinet Trading Limited (PM, RG) | May 2009 | Cyprus |
| Black Sea View Limited (PM, RG) | August 2007 | Cyprus |
| Bletilla Ventures Limited (PM, RG) | October 2010 | Cyprus |
| Cavenari Investments Limited (RG) | December 2007 | Cyprus |
| Global Highway Limited (PM, RG) | August 2007 | Cyprus |
| Leviathan Advisors Limited (PM, RG) | August 2007 | Cyprus |
| LOAV Advisors Limited (PM, RG) | August 2007 | Cyprus |
| Lucicle Consultants Limited (PM, RG) | December 2008 | Cyprus |
| Marziola Holdings Limited (PM) | March 2012 | Cyprus |
| Olivenia Trading Limited (PM, RG) | March 2012 | Cyprus |
| Peranova Holdings Limited (Peranova) | June 2007 | Cyprus |
| Serangon Holdings Limited (PM, RG) | January 2008 | Cyprus |
| Yiakora Ventures Limited (PM) | February 2008 | Cyprus |
Other Foreign Entities
| Entity Name | Date Created | Incorporation Location |
| Global Endeavour Inc. (also known as Global Endeavor Inc.) (PM) | Unknown | Grenadines |
| Jeunet Ltd. (PM) | August 2011 | Grenadines |
| Pompolo Limited (PM, RG) | April 2013 | United Kingdom |
The Tax Scheme
MANAFORT And GATES’ Wiring Money From Offshore Accounts Into The United States
14. In order to use the money in the offshore nominee accounts of the MANAFORT–GATES entities without paying taxes on it, MANAFORT and GATES caused millions of dollars in wire transfers from these accounts to be made for goods, services, and real estate. They did not report these transfers as income.
15. From 2008 to 2014, MANAFORT caused the following wires, totaling over $12,000,000, to be sent to the vendors listed below for personal items. MANAFORT did not pay taxes on this income, which was used to make the purchases.
| Payee | Transaction Date |
style="border-right:1px solid black;border-bottom:1px solid black;background-color: #a0a0a0;color: #000;padding-left:1em;padding-right:1em;"| Originating Account Holder ||style="border-right:1px solid black;border-bottom:1px solid black;background-color: #a0a0a0;color: #000;padding-left:1em;padding-right:1em;"| Country of Origination ||style="border-right:1px solid black;border-bottom:1px solid black;background-color: #a0a0a0;color: #000;padding-left:1em;padding-right:1em;"| Amount of Transaction | ||
| Vendor A (Home Improvement Company in the Hamptons, New York) | 6/10/2008 | LOAV Advisors Limited | Cyprus | $107,000 |
6/25/2008 7/7/2008 8/5/2008 9/2/2008 10/6/2008 10/24/2008 11/20/2008 12/22/2008 1/14/2009 1/29/2009 2/25/2009 4/16/2009 5/7/2009 5/12/2009 6/1/2009 6/18/2009 7/31/2009
Originating Account Holder
LOAV Advisors Limited LOAV Advisors Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited Yiakora Ventures Limited 8
Country of Origination Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus
Amount of Transaction $107,000 $23,500 $20,000 $59,000 $272,000 $109,000 $107,800 $77,400 $100,000 $9,250 $97,670 $108,100 $94,394 $54,000 $9,550 $86,650 $34,400 $106,000
| Payee | Transaction Date | Originating Account Holder | Country of Origination | Amount of Transaction |
| 8/28/2009 | Yiakora Ventures Limited | Cyprus | $37,000 | |
| 9/23/2009 | Yiakora Ventures Limited | Cyprus | $203,500 | |
| 10/26/2009 | Yiakora Ventures Limited | Cyprus | $38,800 | |
| 11/18/2009 | Global Highway Limited | Cyprus | $130,906 | |
| 3/8/2010 | Global Highway Limited | Cyprus | $124,000 | |
| 5/11/2010 | Global Highway Limited | Cyprus | $25,000 | |
| 7/8/2010 | Global Highway Limited | Cyprus | $128,000 | |
| 7/23/2010 | Leviathan Advisors Limited | Cyprus | $26,500 | |
| 8/12/2010 | Leviathan Advisors Limited | Cyprus | $138,900 | |
| 9/2/2010 | Yiakora Ventures Limited | Cyprus | $31,500 |
Global Highway Limited Yiakora Ventures Limited Leviathan Advisors Limited Global Highway Limited Global Highway Limited Leviathan Advisors Limited Leviathan Advisors Limited Global Highway Limited Leviathan Advisors Limited Leviathan Advisors Limited Leviathan Advisors Limited Leviathan Advisors Limited Global Highway Limited Global Highway Limited Global Highway Limited Global Highway Limited Global Highway Limited Leviathan Advisors Limited Global Highway Limited Global Highway Limited Global Highway Limited Global Highway Limited Global Highway Limited Peranova Lucicle Consultants Limited Lucicle Consultants Limited Lucicle Consultants Limited Lucicle Consultants Limited 9
Country of Origination Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus
Amount of Transaction $37,000 $203,500 $38,800 $130,906 $124,000 $25,000 $28,000 $26,500 $138,900 $31,500 $67,600 $107,600 $31,500 $46,160 $36,500 $26,800 $195,000 $95,000 $6,500 $70,000 $39,900 $95,000 $22,000 $9,300 $74,000 $22,300 $6,100 $17,800 $29,800 $42,600 $22,300 $75,000 $22,300 $37,500 $50,000 $79,000 $45,000 $11,860
Payee
Vendor B (Home Automation, Lighting and Home Entertainment Company in Florida)
Transaction Date 7/9/2012 7/18/2012 8/7/2012 9/27/2012 11/20/2012 12/20/2012 1/29/2013 3/12/2013 8/29/2013 11/13/2013 11/26/2013 12/6/2013 12/12/2013 4/22/2014 8/18/2014 3/22/2011 3/28/2011 4/27/2011 5/16/2011 11/15/2011 11/23/2011 2/28/2012 10/31/2012 12/17/2012 1/15/2013 1/24/2013 2/12/2013 2/26/2013 7/15/2013 11/5/2013
Vendor C (Antique Rug Store in Alexandria, Virginia)
10/7/2008 3/17/2009 4/16/2009 4/27/2009 5/7/2009
Originating Account Country of Holder Origination Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Global Endeavour Inc. Grenadines Global Endeavour Inc. Grenadines Global Endeavour Inc. Grenadines Global Endeavour Inc. Grenadines Grenadines Global Endeavour Inc. Global Endeavour Inc. Grenadines Grenadines Global Endeavour Inc. Vendor A Total Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Global Highway Limited Cyprus Global Highway Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus United Pompolo Limited Kingdom Global Endeavour Inc. Grenadines Vendor B Total Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus 10
Amount of Transaction $10,800 $88,000 $48,800 $100,000 $298,000 $55,000 $149,000 $375,000 $200,000 $75,000 $80,000 $130,000 $90,000 $56,293 $34,660 $5,434,793 $12,000 $25,000 $12,000 $25,000 $17,006 $11,000 $6,200 $290,000 $160,600 $194,000 $6,300 $51,600 $260,000 $175,575 $73,000 $1,319,281 $15,750 $46,200 $7,400 $65,000 $210,000
Payee
Vendor D (Related to Vendor C) Vendor E (Men’s Clothing Store in New York)
Transaction Originating Account Date Holder 7/15/2009 Yiakora Ventures Limited 3/31/2010 Yiakora Ventures Limited 6/16/2010 Global Highway Limited
2/28/2012 Global Highway Limited
11/7/2008 2/5/2009 4/27/2009 10/26/2009 3/30/2010 5/11/2010 6/28/2010 8/12/2010 11/17/2010 2/7/2011 3/22/2011 3/28/2011 4/27/2011 6/30/2011 9/26/2011 11/2/2011 12/12/2011 2/9/2012 2/28/2012 3/14/2012 4/18/2012 5/15/2012 6/19/2012 8/7/2012 11/20/2012 12/20/2012 1/15/2013 2/12/2013 2/26/2013 9/3/2013
Country of Origination Cyprus Cyprus Cyprus Vendor C Total Cyprus
Vendor D Total Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Global Highway Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Global Endeavour Inc. Grenadines 11
Amount of Transaction $200,000 $140,000 $250,000 $934,350 $100,000 $100,000 $32,000 $22,750 $13,500 $32,500 $15,000 $39,000 $5,000 $32,500 $11,500 $24,000 $43,600 $12,000 $3,000 $24,500 $12,000 $26,700 $46,000 $2,800 $16,000 $8,000 $48,550 $7,000 $21,600 $15,500 $10,900 $7,500 $37,000 $7,000 $39,000 $81,500
Payee
Transaction Date 10/15/2013 11/26/2013 4/24/2014 9/11/2014
Vendor F (Landscaper in the Hamptons, New York)
4/27/2009 5/12/2009 6/1/2009 6/18/2009 9/21/2009 5/11/2010 6/28/2010 7/23/2010 9/2/2010 10/6/2010 10/18/2010 12/16/2010 3/22/2011 5/3/2011 6/1/2011 7/27/2011 8/16/2011 9/19/2011 10/24/2011 11/2/2011
Vendor G (Antique Dealer in New York)
9/2/2010 10/18/2010 2/28/2012 3/14/2012 2/26/2013
Vendor H (Clothing Store in Beverly Hills, California)
6/25/2008 12/16/2008 12/22/2008 8/12/2009 5/11/2010 11/17/2010
Originating Account Holder Global Endeavour Inc. Global Endeavour Inc. Global Endeavour Inc. Global Endeavour Inc.
Country of Origination Grenadines Grenadines Grenadines Grenadines Vendor E Total Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Yiakora Ventures Limited Cyprus Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Global Highway Limited Cyprus Vendor F Total Yiakora Ventures Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Vendor G Total LOAV Advisors Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Global Highway Limited Cyprus Global Highway Limited Cyprus 12
Amount of Transaction $53,000 $13,200 $26,680 $58,435 $849,215 $34,000 $45,700 $21,500 $29,000 $21,800 $44,000 $50,000 $19,000 $21,000 $57,700 $26,000 $20,000 $50,000 $40,000 $44,000 $27,000 $13,450 $12,000 $42,000 $37,350 $655,500 $165,000 $165,000 $190,600 $75,000 $28,310 $623,910 $52,000 $49,000 $10,260 $76,400 $85,000 $128,280
Payee
Vendor I (Investment Company)
Transaction Originating Account Country of Date Holder Origination 5/31/2011 Leviathan Advisors Limited Cyprus 11/15/2011 Global Highway Limited Cyprus 12/17/2012 Lucicle Consultants Limited Cyprus Vendor H Total 9/3/2013 Global Endeavour Inc.
Vendor J (Contractor in Florida)
11/15/2011 12/5/2011 12/21/2011 2/9/2012 5/17/2012 6/19/2012 7/18/2012 9/19/2012 11/30/2012 1/9/2013 2/28/2013
Vendor K (Landscaper in the Hamptons, New York)
12/5/2011 3/1/2012 6/6/2012 6/25/2012 6/27/2012 2/12/2013 7/15/2013 11/26/2013
Vendor L (Payments Relating to Three Range Rovers) Vendor M
4/12/2012 5/2/2012
Grenadines
Vendor I Total Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Black Sea View Limited Cyprus Global Highway Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Vendor J Total Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus United Pompolo Limited Kingdom Grenadines Global Endeavour Inc. Vendor K Total Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus
6/29/2012 Lucicle Consultants Limited Cyprus Vendor L Total 11/20/2012 Lucicle Consultants Limited Cyprus 12/7/2012 Lucicle Consultants Limited Cyprus 13
Amount of Transaction $64,000 $48,000 $7,500 $520,440 $500,000 $500,000 $8,000 $11,237 $20,000 $51,000 $68,000 $60,000 $32,250 $112,000 $39,700 $25,600 $4,700 $432,487 $4,115 $50,000 $47,800 $17,900 $18,900 $3,300 $13,325 $9,400 $164,740 $83,525 $12,525 $67,655 $163,705 $45,000 $21,000
Payee (Contractor in Virginia)
Vendor N (Audio, Video, and Control System Home Integration and Installation Company in the Hamptons, New York)
Transaction Date 12/17/2012 1/17/2013 1/29/2013 2/12/2013 1/29/2009 3/17/2009 4/16/2009 12/2/2009 3/8/2010 4/23/2010
Originating Account Country of Holder Origination Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Lucicle Consultants Limited Cyprus Vendor M Total Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Yiakora Ventures Limited Cyprus Global Highway Limited Cyprus Global Highway Limited Cyprus Yiakora Ventures Limited Cyprus
7/29/2010 Leviathan Advisors Limited
Cyprus
Vendor N Total Vendor O (Purchase of Mercedes Benz)
10/5/2012 Lucicle Consultants Limited Cyprus Vendor O Total
Vendor P (Purchase of Range Rover) Vendor Q (Property Management Company in South Carolina)
12/30/2008 Yiakora Ventures Limited
9/2/2010 10/6/2010 10/18/2010 2/8/2011
Vendor P Total Yiakora Ventures Limited Cyprus Global Highway Limited Cyprus Leviathan Advisors Limited Cyprus Global Highway Limited Cyprus
2/9/2012 Global Highway Limited Vendor R (Art Gallery in Florida) Vendor S
Cyprus
2/9/2011 Global Highway Limited
Cyprus Vendor Q Total Cyprus
Amount of Transaction $21,000 $18,750 $9,400 $10,500 $125,650 $10,000 $21,725 $24,650 $10,000 $20,300 $8,500 $17,650 $112,825 $62,750 $62,750 $47,000 $47,000 $10,000 $10,000 $10,000 $13,500 $2,500 $46,000 $17,900
2/14/2013 Lucicle Consultants Limited Cyprus
$14,000
Vendor R Total 9/26/2011 Leviathan Advisors Limited Cyprus 9/19/2012 Lucicle Consultants Limited Cyprus
$31,900 $5,000 $5,000
14 Transaction Date
Payee (Housekeeping in New York)
16.
Originating Account Holder
Country of Origination
10/9/2013 Global Endeavour Inc.
Amount of Transaction
Grenadines
$10,000
Vendor S Total
$20,000
16. In 2012, MANAFORT caused the following wires to be sent to the entities listed below to purchase the real estate also listed below. MANAFORT did not report the money used to make these purchases on his 2012 tax return.
Property Purchased
Payee
Howard Street DMP Condominium International (New York) LLC Union Street Brownstone, (New York)
Attorney Account Of [Real Estate Attorney]
Arlington House (Virginia)
Real Estate Trust
Originating Account
Date
2/1/2012 Peranova Actinet Trading Limited Actinet Trading 11/29/2012 Limited 11/29/2012
8/31/2012
Lucicle Consultants Limited
Country of Origin
Amount
Cyprus
$1,500,000
Cyprus
$1,800,000
Cyprus
$1,200,000
Cyprus
$1,900,000
Total
17. MANAFORT and GATES also disguised, as purported “loans,” more than $10 million transferred from Cypriot entities, including the overseas MANAFORT–GATES entities, to domestic entities owned by MANAFORT. For example, a $1.5 million wire from Peranova to DMI that MANAFORT used to purchase real estate on Howard Street in Manhattan, New York, was recorded as a “loan” from Peranova to DMI, rather than as income. The following loans were shams designed to reduce fraudulently MANAFORT’s reported taxable income.
| Year | Payor / Ostensible “Lender” |
Payee / Ostensible “Borrower” |
Country of Origin |
Total Amount of “Loans” |
| 2008 | Yiakora Ventures Limited | Jesand Invesment Corporation | Cyprus $8,120,000 | |
| 2008 | Yiakora Ventures Limited | DMP | Cyprus | $500,000 |
| 2009 | Yiakora Ventures Limited | DMP | Cyprus | $694,000 |
| 2009 | Yiakora Ventures Limited | Daisy Manafort, LLC | Cyprus | $500,000 |
| 2012 | Peranova | DMI | Cyprus | $1,500,000 |
| 2014 | Telmar Investments Ltd. | DMI | Cyprus | $900,000 |
| 2015 | Telmar Investments Ltd. | DMI | Cyprus | $1,000,000 |
| Total | $13,214,000 | |||
18. From 2010 to 2014, GATES caused the following wires, totaling more than $3,000,000, to be sent to entities and bank accounts of which he was a beneficial owner or he otherwise controlled. GATES did not report this income on his tax returns.
| Payee | Transaction Date |
Originating Account Holder |
Country of Origination |
Amount of Transaction |
| Richard Gates<br /United Kingdom Bank Account A |
3/26/2010 | Serangon Holdings Limited | Cyprus | $85,000 |
| 4/20/2010 | Serangon Holdings Limited | Cyprus | $50,000 | |
| 5/6/2010 | Serangon Holdings Limited | Cyprus | $150,000 | |
| Richard Gates United Kingdom Bank Account A |
9/7/2010 | Serangon Holdings Limited | Cyprus | $160,000 |
| 10/13/2010 | Serangon Holdings Limited | Cyprus | $15,000 | |
| Richard Gates United States Bank Account C |
9/27/2010 | Global Highway Limited | Cyprus | $50,000 |
| 2010 Tax Year Total | $510,000 | |||
| Jemina LLC United States Bank Account D |
9/9/2011 | Peranova | Cyprus | $48,500 |
| Richard Gates United Kingdom Bank Account B |
12/16/2011 | Peranova | Cyprus | $100,435 |
| 2011 Tax Year Total | $148,935 | |||
| Richard Gates United Kingdom Bank Account B |
1/9/2012 | Global Highway Limited | Cyprus | $100,000 |
| 1/13/2012 | Peranova | Cyprus | $100,435 | |
| 2/29/2012 | Global Highway Limited | Cyprus | $28,500 | |
| 3/27/2012 | Bletilla Ventures Limited | Cyprus | $18,745 | |
| Payee | Transaction Date |
Originating Account Holder |
Country of Origination |
Amount of Transaction |
| 4/26/2012 | Bletilla Ventures Limited | Cyprus | $26,455 | |
| 5/30/2012 | Bletilla Ventures Limited | Cyprus | $15,000 | |
| 5/30/2012 | Lucicle Consultants Limited | Cyprus | $14,650 | |
| 6/27/2012 | Bletilla Ventures Limited | Cyprus | $18,745 | |
| 8/2/2012 | Bletilla Ventures Limited | Cyprus | $28,745 | |
| 8/30/2012 | Bletilla Ventures Limited | Cyprus | $38,745 | |
| 9/27/2012 | Bletilla Ventures Limited | Cyprus | $32,345 | |
| 10/31/2012 | Bletilla Ventures Limited | Cyprus | $46,332 | |
| 11/20/2012 | Bletilla Ventures Limited | Cyprus | $48,547 | |
| 11/30/2012 | Bletilla Ventures Limited | Cyprus | $38,532 | |
| 12/21/2012 | Bletilla Ventures Limited | Cyprus | $47,836 | |
| 12/28/2012 | Bletilla Ventures Limited | Cyprus | $47,836 | |
| 2012 Tax Year Total | $651,448 | |||
| Richard Gates United Kingdom Bank Account B |
1/11/2013 | Bletilla Ventures Limited | Cyprus | $47,836 |
| 1/22/2013 | Bletilla Ventures Limited | Cyprus | $34,783 | |
| 1/30/2013 | Bletilla Ventures Limited | Cyprus | $46,583 | |
| 2/22/2013 | Bletilla Ventures Limited | Cyprus | $46,233 | |
| 2/28/2013 | Bletilla Ventures Limited | Cyprus | $46,583 | |
| 3/1/2013 | Bletilla Ventures Limited | Cyprus | $42,433 | |
| 3/15/2013 | Bletilla Ventures Limited | Cyprus | $37,834 | |
| 4/15/2013 | Bletilla Ventures Limited | Cyprus | $59,735 | |
| 4/26/2013 | Bletilla Ventures Limited | Cyprus | $48,802 | |
| 5/17/2013 | Olivenia Trading Limited | Cyprus | $57,798 | |
| 5/30/2013 | Actinet Trading Limited | Cyprus | $45,622 | |
| 6/13/2013 | Lucicle Consultants Limited | Cyprus | $76,343 | |
| 8/7/2013 | Pompolo Limited | United Kingdom | $250,784 | |
| 9/6/2013 | Lucicle Consultants Limited | Cyprus | $68,500 | |
| 9/13/2013 | Cypriot Agent | Cyprus | $179,216 | |
| 7/8/2013 | Marziola Holdings | Limited Cyprus | $72,500 | |
| 9/4/2013 | Marziola Holdings | Limited Cyprus | $89,807 | |
| 10/22/2013 | Cypriot Agent | Cyprus | $119,844 | |
| 11/12/2013 | Cypriot Agent | Cyprus | $80,000 | |
| 12/20/2013 | Cypriot Agent | Cyprus | $90,000 | |
| 2013 Tax Year Total | $1,541,237 | |||
| Jemina LLC United States Bank Account D |
2/10/2014 | Cypriot Agent | Cyprus | $60,044 |
| 4/29/2014 | Cypriot Agent | Cyprus | $44,068 | |
| 10/6/2014 | Global Endeavour Inc. | Grenadines | $65,000 | |
| Payee | Transaction Date |
Originating Account Holder |
Country of Origination |
Amount of Transaction |
| Bade LLC United States Bank Account E |
11/25/2014 | Global Endeavour Inc. | Grenadines | $120,000 |
| 2014 Tax Year Total | $289,112 | |||
MANAFORT And GATES’ Hiding Foreign Bank Accounts And False Filings
19. United States citizens who have authority over certain foreign bank accounts—whether or not the accounts are set up in the names of nominees who act for their principals—have reporting obligations to the United States.
20. First, the Bank Secrecy Act and its implementing regulations require United States citizens to report to the Treasury any financial interest in, or signatory authority over, any bank account or other financial account held in foreign countries, for every calendar year in which the aggregate balance of all such foreign accounts exceeds $10,000 at any point during the year. This is commonly known as a foreign bank account report or “FBAR.” The Bank Secrecy Act requires these reports because they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings. The Treasury’s Financial Crimes Enforcement Network (FinCEN) is the custodian for FBAR filings, and FinCEN provides access to its FBAR database to law enforcement entities, including the Federal Bureau of Investigation. The reports filed by individuals and businesses are used by law enforcement to identify, detect, and deter money laundering that furthers criminal enterprise activity, tax evasion, and other unlawful activities.
21. Second, United States citizens also are obligated to report information to the IRS regarding foreign bank accounts. For instance, in 2010, Schedule B of IRS Form 1040 had a “Yes” or “No” box to record an answer to the question: “At any time during [the calendar year], did you have an interest in or a signature or other authority over a financial account in a foreign country, such as a bank account, securities account, or other financial account?" If the answer was "Yes," then the form required the taxpayer to enter the name of the foreign country in which the financial account was located.
22.For each year in or about and between 2008 through at least 2014, MANAFORT had authority over foreign accounts that required an FBAR filing. Specifically, MANAFORT was required to report to the Treasury each foreign bank account held by the foreign MANAFORT– GATES entities noted above in paragraph 12 that bears the initials PM. No FBAR filings were made by MANAFORT for these accounts.
23.For each year in or about and between 2010 through at least 2013, GATES had authority over foreign accounts that required an FBAR filing. Specifically, GATES was required to report to the United States Treasury each foreign bank account held by the foreign MANAFORT– GATES entities noted above in paragraph 12 that bears the initials RG, as well as United Kingdom Bank Accounts A and B noted in paragraph 18. No FBAR filings were made by GATES for these accounts.
24.Furthermore, in each of MANAFORT's tax filings for 2008 through 2014, MANAFORT, with the assistance of GATES, represented falsely that he did not have authority over any foreign bank accounts. MANAFORT and GATES had repeatedly and falsely represented in writing to MANAFORT's tax preparer that MANAFORT had no authority over foreign bank accounts, knowing that such false representations would result in false tax filings in MANAFORT's name. For instance, on October 4, 2011, MANAFORT's tax preparer asked MANAFORT in writing: "At any time during 2010, did you [or your wife or children] have an interest in or a signature or other authority over a financial account in a foreign country, such as a bank account, securities account or other financial account?"
On the same day, MANAFORT falsely responded "NO." Page:Manafort-indictment-22Feb2018.pdf/24 Page:Manafort-indictment-22Feb2018.pdf/25 Page:Manafort-indictment-22Feb2018.pdf/26 Page:Manafort-indictment-22Feb2018.pdf/27 Page:Manafort-indictment-22Feb2018.pdf/28 Page:Manafort-indictment-22Feb2018.pdf/29 support for the stated income, and the loan application was denied.
42. MANAFORT applied to a second bank, Lender D. Between approximately July 2016 and January 2017, MANAFORT, with the assistance of GATES, sought and secured approximately $16,000,000 in two loans from Lender D. MANAFORT used the Bridgehampton property as collateral for one loan, and the Union Street property for the other.
43. MANAFORT and GATES made numerous false and fraudulent representations to secure the loans. For example, MANAFORT provided the bank with doctored P&Ls for DMI for both 2015 and 2016, overstating its income by millions of dollars. The doctored 2015 DMI P&L submitted to Lender D was the same false statement previously submitted to Lender C, which overstated DMI's income by more than $4 million. The doctored 2016 DMI P&L was inflated by MANAFORT by more than $3.5 million. To create the false 2016 P&L, on or about October 21, 2016, MANAFORT emailed GATES a .pdf version of the real 2016 DMI P&L, which showed a loss of more than $600,000. GATES converted that .pdf into a "Word" document so that it could be edited, which GATES sent back to MANAFORT. MANAFORT altered that "Word" document by adding more than $3.5 million in income. He then sent this falsified P&L to GATES and asked that the "Word" document be converted back to a .pdf, which GATES did and returned to MANAFORT. MANAFORT then sent the falsified 2016 DMI P&L .pdf to Lender D.
44. In addition, Lender D questioned MANAFORT about a $300,000 delinquency on his American Express card, which was more than 90 days past due. The delinquency significantly affected MANAFORT's credit rating score. MANAFORT falsely represented to Lender D that he had lent his credit card to a friend, GATES, who had incurred the charges and had not reimbursed him. MANAFORT supplied Lender D a letter from GATES that falsely stated that GATES had borrowed MANAFORT's credit card to make the purchases at issue and would pay him back by a date certain.
Statutory Allegations
COUNTS ONE THROUGH FIVE
(Subscribing to False United States Individual Income
Tax Returns For 2010–2014 Tax Years)
45.Paragraphs 1 through 44 are incorporated here.
46. On or about the dates specified below, in the Eastern District of Virginia and elsewhere,
defendant PAUL J. MANAFORT, JR., willfully and knowingly did make and subscribe, and aid and abet and cause to be made and subscribed, United States Individual Income Tax Returns, Forms 1040 and Schedule B, for the tax years set forth below, which returns contained and were verified by the written declaration of MANAFORT that they were made under penalties of perjury, and which returns MANAFORT did not believe to be true and correct as to every material matter, in that the returns (a) claimed that MANAFORT did not have a financial interest in and signature and other authority over a financial account in a foreign country and (b) failed to report income, whereas MANAFORT then and there well knew and believed that he had a financial interest in, and signature and other authority over, bank accounts in a foreign country and had earned total income in excess of the reported amounts noted below:
| COUNT | TAX YEAR |
APPROX. FILING DATE |
FOREIGN ACCOUNT REPORTED (Sch. B, Line 7a) |
TOTAL INCOME REPORTED (Line 22) |
| 1 | 2010 | October 14, 2011 | None | $504,744 |
| 2 | 2011 | October 15, 2012 | None | $3,071,409 |
| 3 | 2012 | October 7, 2013 | None | $5,361,007 |
| 4 | 2013 | October 6, 2014 | None | $1,910,928 |
| 5 | 2014 | October 14, 2015 | None | $2,984,210 |
(26 U.S.C. § 7206(l); 18 U.S.C. §§ 2 and 3551 et seq.)
COUNTS SIX THROUGH TEN
(Assisting in the Preparation of
False United States Individual Income
Tax Returns For 2010–2014 Tax Years)
47. Paragraphs 1 through 44 are incorporated here.
48. On or about the dates specified below, in the Eastern District of Virginia and elsewhere, defendant RICHARD W. GATES III willfully and knowingly did aid and assist in, and procure, counsel, and advise the preparation and presentation to the Internal Revenue Service, of a United States Individual Income Tax Return, Form 1040 and Schedule B, of PAUL J. MANAFORT, JR., for the tax years set forth below, which returns were false and fraudulent as to a material matter, in that the returns (a) claimed that MANAFORT did not have a financial interest in, and signature and other authority over, a financial account in a foreign country and (b) failed to report income, whereas GATES then and there well knew and believed that MANAFORT had a financial interest in, and signature and other authority over, bank accounts in a foreign country and had earned total income in excess of the reported amounts noted below:
| COUNT | TAX YEAR |
APPROX. FILING DATE |
FOREIGN ACCOUNT REPORTED (Sch. B, Line 7a) |
TOTAL INCOME REPORTED (Line 22) |
| 6 | 2010 | October 14, 2011 | None | $504,744 |
| 7 | 2011 | October 15, 2012 | None | $3,071,409 |
| 8 | 2012 | October 7, 2013 | None | $5,361,007 |
| 9 | 2013 | October 6, 2014 | None | $1,910,928 |
| 10 | 2014 | October 14, 2015 | None | $2,984,210 |
(26 U.S.C. § 7206(2); 18 U.S.C. § 3551 et seq.)
COUNTS ELEVEN THROUGH FOURTEEN
(Failure To File Reports Of Foreign Bank And Financial
Accounts For Calendar Years 2011–2014)
49. Paragraphs 1 through 44 are incorporated here.
50. On the filing due dates listed below, in the Eastern District of Virginia and elsewhere, Case 1:17-cr-00201-ABJ Document 190-1 Filed 02/22/18 Page 29 of 37
defendant PAUL J. MANAFORT, JR., unlawfully, willfully, and knowingly did fail to file with the Treasury an FBAR disclosing that he had a financial interest in, and signature and other authority over, a bank, securities, and other financial account in a foreign country, which had an aggregate value of more than $10,000 in a 12-month period, during the years listed below:
| COUNT | YEAR | DUE DATE TO FILE FBAR |
| 11 | 2011 | June 29, 2012 |
| 12 | 2012 | June 30, 2013 |
| 13 | 2013 | June 30, 2014 |
| 14 | 2014 | June 30, 2015 |
(31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. §§ 2 and 3551 et seq.)
COUNTS FIFTEEN THROUGH NINETEEN
(Subscribing to False United States Individual Income
Tax Returns For 2010–2014 Tax Years)
51. Paragraphs 1 through 44 are incorporated here.
52. On or about the dates specified below, in the Eastern District of Virginia and elsewhere, defendant RICHARD W. GATES III willfully and knowingly did make and subscribe, and aid and abet and cause to be made and subscribed, United States Individual Income Tax Returns, Forms 1040 and Schedule B, for the tax years set forth below, which returns contained and were verified by the written declaration of defendant GATES that they were made under penalties of perjury, and which returns defendant GATES did not believe to be true and correct as to every material matter, in that the returns (a) claimed that GATES did not have a financial interest in, and signature and other authority over, a financial account in a foreign country and (b) failed to report income, whereas GATES then and there well knew and believed that he had a financial interest in, and signature and other authority over, a financial account in a foreign country and had earned total income in excess of the reported amounts noted below:
| COUNT | TAX YEAR |
APPROX. FILING DATE |
FOREIGN ACCOUNT REPORTED (Sch. B, Line 7a) |
TOTAL INCOME REPORTED (Line 22) |
| 15 | 2010 | July 26, 2011 | None | $194,257 |
| 16 | 2011 | October 11, 2012 | None | $250,307 |
| 17 | 2012 | October 15, 2013 | None | $365,646 |
| 18 | 2013 | October 15, 2014 | None | $307,363 |
| 19 | 2014 | October 14, 2015 | None | $292,892 |
(26 U.S.C. § 7206(l); 18 U.S.C. §§ 2 and 3551 et seq.)
COUNT TWENTY
(Subscribing to a False Amended United States Individual Income
Tax Return For 2013 Tax Year)
53. Paragraphs 1 through 44 are incorporated here.
54. On or about October 25, 2017, in the Eastern District of Virginia and elsewhere, defendant RICHARD W. GATES III willfully and knowingly did make and subscribe, and aid and abet and cause another to make and subscribe, a United States Individual Income Tax Return, Form 1040X, for the 2013 tax year, which return contained and was verified by the written declaration of defendant GATES that it was made under penalties of perjury, and which return defendant GATES did not believe to be true and correct as to every material matter, in that the return failed to report income, whereas GATES then and there well knew and believed that he had earned adjusted gross income in excess of the reported amount on Line 1C, to wit: $292,055.
(26 U.S.C. § 7206(l); 18 U.S.C. §§ 2 and 3551 et seq.)
COUNTS TWENTY-ONE THROUGH TWENTY-THREE
(Failure To File Reports Of Foreign Bank And Financial
Accounts For Calendar Years 2011–2013)
55. Paragraphs 1 through 44 are incorporated here.
56. On the filing due dates listed below, in the Eastern District of Virginia and elsewhere, defendant RICHARD W. GATES III unlawfully, willfully, and knowingly did fail to file with the Treasury an FBAR disclosing that he had a financial interest in, and signature authority over, a bank, securities, and other financial account in a foreign country, which had an aggregate value of more than $10,000 in a 12-month period, during the years listed below:
| COUNT | YEAR | DUE DATE TO FILE FBAR |
| 21 | 2011 | June 29, 2012 |
| 22 | 2012 | June 30, 2013 |
| 23 | 2013 | June 30, 2014 |
(31 U.S.C. §§ 5314 and 5322(a); 18 U.S.C. §§ 2 and 3551 et seq.)
COUNT TWENTY-FOUR
(Bank Fraud Conspiracy / Lender B / $3.4 million loan)
57. Paragraphs 1 through 44 are incorporated here.
58. On or about and between December 2015 and March 2016, both dates being approximate and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally conspire to execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender B, the deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits owned by and under the custody and control of such financial institution by means of materially false and fraudulent pretenses, representations, and promises, contrary to Title 18, United States Code, Section 1344.
(18 U.S.C. §§ 1349 and 3551 et seq.)
COUNT TWENTY-FIVE
(Bank Fraud / Lender B / $3.4 million loan)
59. Paragraphs 1 through 44 are incorporated here.
60. On or about and between December 2015 and March 2016, both dates being approximate and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally execute and attempt to execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender B, the deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits owned by and under the custody and control of such financial institution by means of materially false and fraudulent pretenses, representations, and promises.
(18 U.S.C. §§ 1344, 2, and 3551 et seq.)
COUNT TWENTY-SIX
(Bank Fraud Conspiracy / Lender C / $1 million loan)
61. Paragraphs 1 through 44 are incorporated here.
62. On or about and between March 2016 and May 2016, both dates being approximate and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally conspire to execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender C, the deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits owned by and under the custody and control of such financial institution by means of materially false and fraudulent pretenses, representations, and promises, contrary to Title 18, United States Code, Section 1344.
(18 U.S.C. §§ 1349 and 3551 et seq.)
COUNT TWENTY-SEVEN
(Bank Fraud / Lender C / $1 million loan)
63. Paragraphs 1 through 44 are incorporated here.
64. On or about and between December 2015 and March 2016, both dates being approximate and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally execute and attempt to execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender C, the deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits owned by and under the custody and control of such financial institution by means of materially false and fraudulent pretenses, representations, and promises.
(18 U.S.C. §§ 1344, 2, and 3551 et seq.)
COUNT TWENTY-EIGHT
(Bank Fraud Conspiracy / Lender B / $5.5 million loan)
65. Paragraphs 1 through 44 are incorporated here.
66. On or about and between March 2016 and August 2016, both dates being approximate and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally conspire to execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender B, the deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits owned by and under the custody and control of such financial institution by means of materially false and fraudulent pretenses, representations, and promises, contrary to Title 18, United States Code, Section 1344.
(18 U.S.C. §§ 1349 and 3551 et seq.)
COUNT TWENTY-NINE
(Bank Fraud Conspiracy / Lender D / $9.5 million loan)
67. Paragraphs 1 through 44 are incorporated here.
68. On or about and between April 2016 and November 2016, both dates being approximate and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally conspire to execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender D, the deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits owned by and under the custody and control of such financial institution by means of materially false and fraudulent pretenses, representations, and promises, contrary to Title 18, United States Code, Section 1344.
(18 U.S.C. §§ 1349 and 3551 et seq.)
COUNT THIRTY
(Bank Fraud / Lender D / $9.5 million loan)
69. Paragraphs 1 through 44 are incorporated here.
70. On or about and between April 2016 and November 2016, both dates being approximate and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally execute and attempt to execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender D, the deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits owned by and under the custody and control of such financial institution by means of materially false and fraudulent pretenses, representations, and promises.
(18 U.S.C. § 1344, 2, and 3551 et seq.)
COUNT THIRTY-ONE
(Bank Fraud Conspiracy / Lender D / $6.5 million loan)
71. Paragraphs 1 through 44 are incorporated here.
72. On or about and between April 2016 and January 2017, both dates being approximate and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally conspire to execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender D, the deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits owned by and under the custody and control of such financial institution by means of materially false and fraudulent pretenses, representations, and promises, contrary to Title 18, United States Code, Section 1344.
(18 U.S.C. §§ 1349 and 3551 et seq.)
COUNT THIRTY-TWO
(Bank Fraud / Lender D / $6.5 million loan)
73. Paragraphs 1 through 44 are incorporated here.
74. On or about and between April 2016 and January 2017, both dates being approximate and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally execute and attempt to execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender D, the deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits owned by and under the custody and control of such financial institution by means of materially false and fraudulent pretenses, representations, and promises.
(18 U.S.C. §§ 1344, 2, and 3551 et seq.)
FORFEITURE NOTICE
75. Pursuant to Fed. R. Crim. P. 32.2, notice is hereby given to the defendants that the United States will seek forfeiture as part of any sentence in accordance with Title 18, United States Code, Section 982(a)(2), in the event of the defendants’ convictions under Counts Twenty-Four through Thirty-Two of this Superseding Indictment. Upon conviction of the offenses charged in Counts Twenty-Four through Thirty-Two, defendants PAUL J. MANAFORT, JR., and RICHARD W. GATES III shall forfeit to the United States any property constituting, or derived from, proceeds obtained, directly or indirectly, as a result of such violation(s). Notice is further given that, upon conviction, the United States intends to seek a judgment against each defendant for a sum of money representing the property described in this paragraph, as applicable to each defendant (to be offset by the forfeiture of any specific property).
76. The grand jury finds probable cause to believe that the property subject to forfeiture by PAUL J. MANAFORT, JR., includes, but is not limited to, the following listed assets:
- a. All funds held in account number XXXXXX0969 at Lender D, and any property traceable thereto.
Substitute Assets
77. If any of the property described above as being subject to forfeiture, as a result of any act or omission of any defendant
- a. cannot be located upon the exercise of due diligence;
- b. has been transferred or sold to, or deposited with, a third party;
- c. has been placed beyond the jurisdiction of the court;
- d. has been substantially diminished in value; or
- e. has been commingled with other property that cannot be subdivided without difficulty;
it is the intent of the United States of America, pursuant to Title 18, United States Code, Section 982(b) and Title 28, United States Code, Section 2461(c), incorporating Title 21, United States Code, Section 853, to seek forfeiture of any other property of said defendant.
(18 U.S.C. § 982)
__________________________
Robert S. Mueller, III
Special Counsel
Department of Justice
A TRUE BILL:
__________________________
Foreperson
Date: February 22, 2018
This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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