The bank’s lawyers say it was the victim of a massive fraud perpetrated by Manafort and they want U.S. District Judge Amy Berman Jackson to declare that the bank and its holding company are “innocent owners” of property the government is seeking to seize.

Government lawyers fighting the bank’s claims have been vague about their objection, but it appears to be that the bank was not quite as innocent as it claims. Federal prosecutors contend that the bank’s former CEO and founder, Stephen Calk, managed to get Manafort approved for about $16 million in loans despite numerous “red flags” related to his finances.

In May, a federal grand jury in New York City indicted Calk for scheming to use the loan approvals to win an economic advisory post on the Trump 2016 presidential campaign and to seek a job in the Trump administration. Calk even suggested himself for a Cabinet position. He was ultimately interviewed for Secretary of the Army, but did not get nominated.

Calk has pleaded not guilty to a felony charge of soliciting a bribe in exchange for aid from a federally regulated financial institution. His defense attorney has claimed that, like the bank, the executive was a victim of Manafort’s fraud.

“TFSB…submits that what the bank officers and owners knew at the time they provided the loans to the Defendant about Defendant’s criminal conduct is irrelevant,” Justice Department lawyers wrote, arguing that the bank’s position was “wholly inconsistent” with federal law.

Getting additional testimony about the bank’s knowledge “may be further complicated” by the pending criminal prosecution of Calk, the government said.

However, legal submission from the Mueller team in both Virginia and D.C. federal courts identified the bank as one of Manafort’s victims. The Virginia judge even ordered $15.3 million in restitution for the bank.

The bank’s attorneys told Jackson that the legal issue at stake “does not require discovery, or even a hearing.”

The bank’s lawyers also claim Mueller’s prosecutors never established that the assets in dispute were actually the product of the crimes Manafort admitted to, as opposed to properties simply offered up to facilitate his plea deal.

It’s unclear if Calk would benefit financially if the bank prevails in its legal quest to claim an interest in the Manafort properties. Calk owned about two-thirds of the bank at the time the loans went to Manafort.

If Jackson grants the bank’s request for first dibs on as much as $15.5 million in Manafort assets, that could dramatically affect public accountings of the overall cost of Mueller’s investigation.

Mueller’s investigation ran up about $32 million in direct and indirect costs before wrapping up in May, according to a report issued in August by the Justice Department. President Donald Trump has used a higher figure of about $40 million, which appears to have been based on budget estimates.

Some Mueller backers and various press accounts have countered that Mueller’s investigation was ultimately a wash or even a net plus for the federal treasury, once the money he took in was accounted for.

“The cost of your investigation to the taxpayers approaches zero,” House Judiciary Chairman Jerry Nadler (D-N.Y.) said to Mueller during a July hearing. Nadler credited the special counsel with pulling in up to $42 million in fines and forfeitures.

Some news stories said Manafort alone could wind up surrendering as much as $46 million in cash, securities and property to the feds. But those figures seem wildly inflated.

Both the total cost of Mueller’s probe and the amount of money it should be credited with bringing in for the Treasury are open to dispute. One problem is that many reports simply tallied up the full value of Manafort’s properties, not his equity in them.

For instance, Manafort’s Trump Tower apartment recently went on the market for $3.6 million. But UBS Bank had a $3 million mortgage on the property which the U.S. Government agreed to recognize after that bank also went to court to enforce its rights.

The offering price for the Trump Tower condo was just cut to under $3.5 million, but so far it hasn’t been sold. Considering costs of sale, accumulating interest and late fees, it’s possible that in the end the feds see little or nothing from that high-profile Manafort property.

Prosecutors never argued that the Trump Tower apartment, which Manafort bought using a shell company in 2006, was acquired with ill-gotten funds. It was offered up during plea negotiations as Manafort’s lawyers sought to preserve assets for Manafort’s wife, Kathleen, and for the once notoriously high-living political consultant to subsist on when he gets out of prison.

In the end, Paul Manafort essentially traded the Trump Tower apartment for a Charles Schwab brokerage account prosecutors had frozen. He also agreed to give up a Chinatown apartment to prevent seizure of a home in Arlington, Virginia, owned by his daughter Andrea and her husband, Christopher Shand, that was purchased with money Manafort wired in from overseas.

Reports at the time said the deal allowed Manafort to keep both his condo on the Alexandria, Virginia, waterfront and his home in Palm Beach, Florida. However, Federal Savings Bank foreclosed on the Alexandria apartment and has it on the market for $3.2 million, according to Realtor.com. It’s unclear if that could reduce the debt the bank is seeking to cover in the fight with the feds.

Judges ordered Manafort to pay about $6 million in back taxes, while the forfeitures seem to have been aimed at netting about $11-12 million for the U.S. Government, representing profits from the illegal schemes Manafort admitted to. The plea deal simply lists the properties and the accounts to be surrendered, but does not value them.

There are also legitimate questions about what fines and payments can be attributed to Mueller’s probe. Former Trump lawyer Michael Cohen was fined $50,000 and sentenced to a mere two months on a lying-to-Congress charge brought by Mueller’s office.

However, the same judge ordered a three-year sentence for Cohen, another $500,000 in forfeiture for bank fraud, and $1.3 million in back taxes in a tax evasion and campaign-finance focused case that was technically handled by the U.S. Attorney’s Office in Manhattan but closely tied to the Mueller investigation.

Another example: Mueller’s interest in Manafort’s foreign ties led to an aggressive spinoff investigation of a high-powered law firm he commissioned for work related to Ukraine, Skadden Arps. That probe, focused on alleged violations of the Foreign Agents Registration Act, was also handed off to federal prosecutors in Manhattan. In January, the firm agreed to register for its work and to pay $4.6 million to the U.S. Treasury to resolve the issue.

That foreign-agent probe also led to a failed false-statement prosecution earlier this year against former Skadden lawyer and Obama White House Counsel Greg Craig. A judge dismissed one of those charges, while a jury acquitted him on another last month. The costs of those follow-on investigations are not included in Mueller’s financial reports.

Government lawyers say they recently made a new settlement proposal to the Chicago bank. The bank’s lawyers say the two sides are at an impasse.

While Justice Department attorneys say they need more information to resolve the bank’s claims, they also say they plan to ask the judge soon to approve the sale of both the Long Island and Brooklyn properties even as the legal fight with the bank continues. The bank says it will oppose such a sale.

Most of Manafort’s other properties and accounts were formally transferred to the feds in May.

The jury at Manafort’s trial in Alexandria, Virginia, last August could not reach a unanimous verdict on the four bank fraud charges related to the loans he took out during the Trump campaign and transition from the closely held, veteran-focused Chicago bank. A verdict sheet shows jurors split, 11-1, on those charges. Manafort was convicted there on eight other felony counts.

As part of the plea deal struck with prosecutors a few months later, Manafort acknowledged his guilt on all the charges he faced.

