Prosecutor Greg Andres said in court Thursday that the government fully intends to call Rick Gates (pictured), who cut a plea deal earlier this year and agreed to cooperate with the prosecution of Paul Manafort. | Susan Walsh/AP Photo Manafort trial Day 3: The bookkeeper speaks, a man-made waterfall and a Rick Gates guarantee

Paul Manafort’s bookkeeper testified Thursday that she was unaware of more than a dozen offshore accounts the former Trump campaign chairman allegedly controlled in Cyprus.

Testifying on the third day of special counsel Robert Mueller’s prosecution of the longtime GOP operative, who is facing bank- and tax-fraud charges, Heather Washkuhn of the Southern California-based accounting firm NKSFB said she handled Manafort’s books from 2011 to 2018, earning about $100,000 a year.


During that period, she managed the accounts for more than a half dozen Manafort properties in Florida, New York and Virginia, tracking money as it moved around his different bank accounts, helping pay his bills and manage rental properties, and creating annual statements for Manafort’s accountants to do his taxes.

“We try to have the full financial picture,” she testified, noting also that Manafort was closely monitoring her firm’s work, too. “He was very knowledgeable. He was very detail-oriented. He approved every penny of everything we paid.”

Under questioning from Mueller prosecutor Greg Andres, Washkuhn testified she was not aware of any holdings Manafort kept outside the U.S. She also acknowledged dealing frequently with Manafort's longtime associate Rick Gates, who cut a plea deal earlier this year and agreed to cooperate with the prosecution of Manafort and Mueller’s broader Trump-Russia probe.

Manafort has pleaded not guilty to charges of dramatically understating income on federal income tax returns, and he’s also fighting allegations of bank fraud totaling more than $20 million tied to five loans he applied for in connection with his homes.

With Washkuhn’s testimony, Mueller’s team started offering jurors an early glimpse of the bank fraud portion of its case. She said she wasn’t aware of Manafort’s loan efforts over the period, which coincided with a period when Manafort was beginning to fall behind in his bills, nearly lost his health insurance and maxed out his bank credit lines.

As his work as a political consultant with the Ukraine dried up, Manafort’s international lobbying company was going into the red. Washkuhn testified that the firm lost $630,000 in 2015 and $1.1. million in 2016, the same year Manafort linked up with Donald Trump’s presidential campaign.

While Washkuhn said she didn’t recall the terms of the loans Manafort was seeking, she said she would have used that information when filling out his annual financial statements.

Prompted by Mueller prosecutors who walked her through dozens of financial documents and email chains, Washkuhn acknowledged that Manafort gave banks several documents without her knowledge, including financial information that did not reflect her understanding of his monetary standing.

For example, one document from 2016 that Manafort produced for a loan with the Federal Savings Bank showed her client claiming $4 million more than her books showed he had in his reserves.

Washkuhn said Manafort drew a salary of $1.99 million in 2012, while Gates that year made $240,000. She said Gates made the same amount in 2013 and 2014, too. Manafort in 2013 also paid tens of thousands of dollars to Konstantin Kilimnik, an associate in the Ukraine, for “professional services.”

A lawyer for Manafort sought to get Washkuhn to concede that Gates sometimes unilaterally instructed her to make transactions related to the finances of Manafort or his political consulting firm, but the bookkeeper for what she called “high-net-worth individuals” insisted she never acted without Manafort’s direct authorization.

Ellis recessed the trial Thursday afternoon with Mueller’s prosecutors just getting started with their questioning of Philip Ayliff, a retired accountant who worked at the firm Manafort used for his taxes. Ayliff’s testimony so far has only covered the firm’s efforts to ensure their clients’ returns are accurate, which relies primarily on clients providing correct information.

Ayliff’s testimony will continue on Friday, with another accountant from the same tax firm, Cindy LaPorta, expected to follow.

As he brought the day’s proceedings to a close, Ellis again pressed Mueller’s team to say they could finish presenting their case by the end of next week. Andres confirmed that was the plan.

Admonishing the press

The federal judge presiding in Manafort’s criminal trial closed Thursday’s session with a rebuke of media coverage about the high-profile case, though he took some of the blame for inaccuracies.

“I’m not much for the press,” U.S. District Court Judge T.S. Ellis III said during brief remarks at the end of the third day in the bank and tax fraud trial against the former Trump campaign chairman.

“I never speak to any member of the press, but I’m sensitive to the fact the public understands what happens. I know many members of the press here work hard to bring that about,” he added.

Without naming any specific stories, Ellis said he had read some news accounts of the case that he called inaccurate. He said some reporters don’t appear to understand the nuances of the case.

“I’ve contributed to some extent to that with comments I’ve made,” Ellis added before concluding: “You all do your job. I’ll do mine.”

Ellis, a 78-year old Ronald Reagan appointee, has noted before the intense international media coverage dedicated to the Manafort trial, with all of the seats frequently full in his ninth-floor courtroom and the plaza outside the federal building crowded with television cameramen, photographers and satellite trucks.

During one of his many rejoinders earlier this week, Ellis told the 12 jurors and four alternates as they prepared to head home that they should take active measures to avoid the media reports about the trial.

“Simply go out of the room or turn it off,” the judge said on Tuesday. “That might even be more pleasant.”

Ellis is also presiding over a trial that is anything but friendly to the modern-day press corps. There are no cameras allowed in the entire courthouse, and reporters can’t enter the building with their laptops, phones or any other electronic equipment. Notes must be taken by hand in the courtroom.

A couple news organizations do have a small work space on the court’s third floor with computers that can reach the outside world, including CNN, The Associated Press and The Washington Post. But even those reporters and editors can’t bring phones into the building.

It’s amid those restrictive conditions that Ellis marveled on Wednesday when more than a dozen reporters raced for the elevators to file their stories after one of special counsel Robert Mueller’s prosecutors suggested that Gates, a star witness in the case, may not testify.

The reaction appeared to be overblown, as prosecutors quickly put an end to that notion on Thursday morning.

Vendors detail Manafort's odd wire transfers

Mueller’s prosecutors spent Thursday morning introducing witnesses who detailed the elaborate and unusual payment methods Manafort used to fund his lavish lifestyle.

Across several hours of testimony, multiple contractors spoke about how the former Trump campaign chairman used international wire transfers to pay for millions of dollars of services. The system, they said, was well outside the norm.

Michael Regolizio, the owner of New Leaf Landscape Maintenance, testified that Manafort spent about $450,000 on landscaping over five years on a 1.5-acre vacation home in the Hamptons.

The work, Regolizio explained, included a man-made waterfall — “One of the biggest ponds in the Hamptons” — and hundreds of flowers decorating the property, and one red flower bed in the shape of an “M.”

“That’s sufficient detail,” said Andres, the Mueller prosecutor, cutting off Regolizio as he went on about the property.

“I like to talk about our work,” Regolizio said.

Regolizio confirmed he received $164,740 from five different offshore companies over a roughly three-year period, and that Manafort personally called to explain when one of the payments was coming in this way. That was different from all his other clients, he said.

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The landscaper testified he also sent invoices and other communications directly to Manafort, but was instructed in the “later years” of his work to send copies of all communications to a Manafort bookkeeper. Regolizio was working on the property until as recently as last December.

Like other witnesses called on Wednesday, Regolizio also confirmed that an invoice he’d been shown by Mueller’s prosecutors in recent weeks purporting to come from his company wasn’t on the up and up. He said the document didn’t have his company’s full name or correct address, and he couldn’t speak to a signature on it.

Mueller’s team also brought in Joel Maxwell, the chief operating officer of a South Florida audio-visual company that worked with Manafort from 2011 through 2017.

Describing Manafort as one of his “top five” clients, Maxwell detailed work that included hooking up video networks and upgrading televisions and other equipment at the defendant’s various homes in New York, Virginia and Florida.

Manafort’s business with Maxwell’s company included $2.2 million in payments over a four year-period from 2011 to 2014.

He also confirmed he was paid through wires transfers from offshore accounts in Cyprus, an unusual practice that only happened with two or three other clients.

Mueller’s prosecutors also presented a $163,000 invoice that purported to be from Maxwell’s company, but he said the document had an incorrect address and mistakenly labeled the company as an LLC. He also said the services listed on the invoice were “not detailed like ours would be.” The document appeared to come from the Caribbean island chain St. Vincent and the Grenadines.

Maxwell said Manafort introduced him to Rick Gates, Manafort's associate, around 2013. He recalled that Gates handled billing issues after that period.

Emails introduced as evidence show that Maxwell’s company did have trouble getting payments, with Gates explaining at one point why it was difficult to move money via international wire.

Gates will take the stand

Speculation that Mueller’s team might not call Gates, its star witness, to testify against his former boss and business partner turns out to have been hot air.

Andres said in court Thursday morning that the government fully intends to call Gates.

“We put him on the witness list,” Andres said of Gates. “We have every intention of calling him as a witness.”

Another prosecutor, Uzo Asonye, caused a stir Wednesday when he told Ellis, the judge overseeing the case, that Gates might or might not be called in the tax- and bank-fraud case against Manafort. More than a dozen reporters — who aren't allowed to bring phones or laptops into the court — scrambled out of their seats and ran to the exits to file stories, which prompted widespread speculation about reasons the prosecution might drop Gates from the case.

However, the full context of Asonye’s remarks suggested that he interjected the uncertainty in a bid to get more leeway to question the FBI agent who was on the stand at the time. Ellis made clear at the time he was confident Gates would be called. On Thursday, the judge said he remained mystified by the reaction.

“I think Mr. Asonye walked that back pretty quickly,” the judge said. “My wife wasn’t fooled.”

During a brief court session Thursday morning before testimony resumed and before the jurors were brought in, Andres seemed to want to clear the air on the subject, especially after defense attorney Richard Westling suggested the uncertainty about Gates’ testimony could affect what evidence is admissible in the case. For example, if Gates admits on the stand that he was part of a criminal conspiracy, more of Manafort’s emails could go before the jury.

However, Andres complained that the initial discussion about Gates took place with the jury in the room.

“They were here when this issue came up,” the prosecutor said, seeming to fault Ellis for his statement Wednesday that prosecutors knew full well whom they planned to call.

“I’m not the one who raised the issue,” Ellis responded, noting that Asonye did so during the questioning of the FBI agent.

Andres acknowledged that, but said the matter shouldn’t have been elaborated on in front of the jury.

Will Manafort testify?

Ellis on Thursday broached one of the biggest questions Manafort and his attorneys still haven’t answered: whether the defendant himself will testify on his own behalf.

The topic came up while Ellis was discussing a motion from Mueller’s team aimed at blocking Manafort from discussing the fact the IRS had not conducted an audit of his taxes before he was charged with a crime.

“We don’t know whether he will testify. We don’t know what he wants to say,” Ellis said, noting as well that Manafort “will not be penalized for the right to remain silent.”

Rehashing Manafort’s lavish lifestyle

Ellis began Thursday’s trial session with another public explanation of why he was limiting some evidence of Manafort’s expensive taste in cars, homes, suits and watches. He said prosecutors are entitled to prove that Manafort’s expenses far exceeded the income he reported to the IRS, but may not dwell on his seemingly insatiable appetite for luxury.

The judge said he’d continue to allow evidence of expenses and payments, but not much in the way of photos that he said could “gild the lily.”

“Most of us don’t have [expensive] suits, don’t have pagodas. It kind of engenders resentment against rich people generally,” the judge said.

Despite the judge’s repeated references Thursday to “pagodas,” there’s been no testimony about such structures. However, a garden designer who testified Wednesday explained how he crafted plans for a “pergola” in the backyard of a $1.9 million home Manafort paid for in Arlington, Virginia, for his daughter Andrea.

Contractor Doug Deluca described the shade-giving feature as a trellis designed to allow climbing greenery to take it over to the point where the structure virtually disappears. He said the one he planned for the Manafort home was based on a pergola he'd seen in New York’s Central Park.

Jurors are expected to hear next from a couple more vendors for Manafort, including one who installed a home theater system for him. After that, prosecutors have said they plan to begin calling bookkeepers and tax preparers who worked with the veteran lobbyist and political operative.