WASHINGTON—Former Trump campaign manager Paul Manafort was living a “lavish” lifestyle financed by a network of foreign corporate entities and accounts designed to help him avoid paying taxes on income he earned while lobbying for the pro-Russian government of Ukraine between 2006 and 2016, according to a 31-page indictment made public Monday.

Wire transfers by Mr. Manafort included nearly $1 million to an antique rug store in Alexandria, Va., out of accounts in Cyprus, about $850,000 on men’s clothing, more than $650,000 in landscaping and about $275,000 on four Range Rovers and a Mercedes-Benz, according to the indictment.

Other accounts or corporations were used to buy property—including a condominium in the Soho neighborhood of Manhattan and a $3 million brownstone in Brooklyn that he bought using wire transfers from foreign entities. The charging document alleges that Mr. Manafort then generated fresh money by mortgaging some of those properties or using them as rentals, the record shows.

Mr. Manafort financed his spending through foreign accounts based in Cyprus, the Caribbean nation of St. Vincent and the Grenadines and the U.K., and prosecutors say he and his former business partner, Rick Gates, gave false information to their accountants and attorneys in order to try to conceal the money.

A veteran Washington political operative who helped guide President Donald Trump to an upset win in the Republican primaries, Mr. Manafort was indicted on Monday in what prosecutors allege was a scheme to conceal a major influence-peddling and lobbying operation performed on behalf of the government of Ukraine.

Mr. Manafort, 68, and Mr. Gates, 45, were both arraigned in U.S. District Court on Monday afternoon, pleading not guilty to a dozen charges stemming from lobbying work they performed between 2006 and 2015 for the ruling party of Ukraine as well as subsequent attempts to allegedly hide the payments from that work. Those charges include two counts of conspiracy to avoid income taxes and launder money, a number of lobbying and banking violations, and allegations of making false and misleading statements to investigators.


The White House on Monday distanced itself from Mr. Manafort and said news of the indictments would have no effect on the ability of the president to govern. “It doesn’t have anything to do with us,” said press secretary Sarah Huckabee Sanders, briefing reporters, adding that the president had had no significant reaction to the news as a result.

Mr. Manafort’s attorney, Kevin Downing, issued a statement Monday saying his client’s work in Ukraine was aimed at building stronger ties between it and the U.S. He also said the claim that “maintaining offshore accounts to bring all your funds into the United States, as a scheme to conceal from the United States government, is ridiculous.”

Through a spokesman, Mr. Gates said he “welcomes the opportunity to confront these charges in court” and asked for privacy.

Both men were senior officials on Mr. Trump’s presidential campaign, with Mr. Manafort serving on the campaign between March and August of 2016, taking over as campaign manager in June. He has said he wasn’t paid for his work. Federal Election Commission records don’t show any campaign payments to Mr. Manafort or any of his known entities.


Mr. Gates joined the campaign around the same time as Mr. Manafort, helping run Republican National Convention operations and rising to the rank of deputy campaign manager. He also helped organize the president’s inauguration, after Mr. Trump’s victory in November.

He received $70,000 in payments related to political work for the Trump campaign through a business entity listed in the indictment, FEC records show. The Republican National Committee’s coordinated spending account with the Trump campaign paid Mr. Gates’s Bade LLC three times from September 2016 to January 2017 for what is listed in FEC records as “political strategy services.”

Before joining the campaign, both men were high-powered lobbyists known for their international client roster.

Beyond allegedly hiding his foreign earnings, prosecutors also assert that Mr. Manafort defrauded banking officials by misrepresenting properties as owner-occupied, in order to lower his interest rate on the mortgages. Prosecutors said they would try to seize those homes under forfeiture rules, which allow the government to seize property believed to be tied to criminal activity. That threat is often used against defendants in order to compel cooperation or a plea agreement.

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In 2012, Paul Manafort allegedly used money from overseas entities to purchase this and two other properties without reporting it on his tax return, according to the Justice Department’s indictment. Photo: Pictometry

In January of 2016, as Mr. Manafort was seeking a lower-interest loan for the Soho condominium, he instructed his son-in-law “to remember” that a bank appraiser “believes you and [Manafort’s daughter] are living there,” the indictment asserts.


All told, prosecutors counted 17 domestic entities registered to the two men, a dozen Cypriot entities, two companies located in the Grenadines and one located in the U.K. with many allegedly used to help funnel money into the U.S. tax-free. The indictment also charges that both men failed to file the required disclosure reports concerning foreign entities and bank accounts to the Treasury Department.

Last October, when Mr. Manafort’s tax preparer emailed him to ask about “foreign bank accounts, etc?” He responded: “none,” according to the indictment.

Between 2006 and 2012, Mr. Manafort and Mr. Gates engaged in a multimillion-dollar lobbying campaign on behalf of Ukrainian President Viktor Yanukovych, who was seeking to burnish his image as a Europe-oriented leader despite close ties with Moscow.

As part of that work, the two men hired two well-known Washington, D.C., lobbying firms in 2012 to help. The firms weren’t named in the legal document but have previously been identified in filings as the Podesta Group and Mercury LLC. The two firms registered to lobby for a nonprofit entity called the European Centre for a Modern Ukraine rather than the government of Ukraine.


By registering to represent a nonprofit, Messrs. Manafort and Gates and the lobbying firms avoided the strict Justice Department registration and disclosure rules under a law called the Foreign Agents Registration Act. Both firms were paid out of offshore accounts controlled by Mr. Manafort, documents say.

The Podesta Group didn’t respond to a request for comment but the firm has said in April that it believed it had complied with all lobbying laws. It belatedly registered under the Foreign Agents act that month.

A partner for Mercury said in a statement: “Mercury takes its obligations to follow all laws, rules and regulations very seriously. Mercury has and will continue to fully cooperate with the Office of the Special Counsel in its investigation.”

—Julie Bykowicz contributed to this article.

Write to Byron Tau at byron.tau@wsj.com