A Status Report On the Manafort Cases and Trials

A Status Report on the Manafort Cases and Trials:
Two Federal Courthouses, Two Trials, and Two Very Different Judges

James S. Kurz

We posted in May 2018 on the Paul Manafort criminal cases pending in the E.D. Va. court (1:18cr0083—TSE) and in the D.C.D.C. court (1:17cr201-ABJ). See J. Kurz, “An Outsider’s Guide to the Manafort Cases,” EDVA Update Blog (posted May 10, 2018). These cases present the infrequent situation of similar federal criminal cases against the same defendant proceeding simultaneously in adjacent federal districts. The same core facts and issues underly both cases, and defendant’s pretrial motions are essentially the same.  As the cases approach trial, we are watching two very different federal judges rule on nearly identical motions.

In the D.C. case, the 7-count Superseding Indictment (the fourth iteration of the Indictment) charges Manafort with Conspiracy Against the United States and with Money Laundering Conspiracy. New charges added in June 2018 include Obstruction of Justice, and more specifically, Witness Tampering. Manafort is alleged to have used a series of offshore entities to hide income—the Indictment asserts that Manafort used “hidden overseas wealth to enjoy a lavish lifestyle … .” His co-defendant and former business partner entered a guilty plea in early 2018, and presumably has been cooperating with the Government. The E.D. Va. case accuses Manafort of failing to report millions in Ukrainian income on his U.S. tax returns, failure to report foreign bank accounts, and then making false statements about his income and assets on $16 million of domestic bank loan applications.

The cases are brought by Special Counsel Robert S. Mueller appointed to investigate possible coordination between the 2016 Trump Campaign and Russia.

1.  Status of Two Criminal Cases—Trials Set for July 25 and September 17

Recall that there are two cases because Manafort did not waive a venue issue when the Government sought to add tax evasion and bank fraud claims to the existing D.C. case. Logically, the two cases plug together. Because Manafort lived in Alexandria and presumably filed his tax returns from Alexandria, the claims had to be brought in the E.D. Va. court absent a waiver by Manafort. The Government obtained a separate indictment from an Alexandria grand jury, and has proceeded with the two cases in parallel. Even though the D.C. case was initiated four months earlier, the E.D. Va. case leap-frogged ahead to its scheduled July trial.

The E.D. Va. case is before Judge T.S. Ellis, III. Trial starts on July 25, 2018 (originally set for July 10, 2018, but moved to later in July to accommodate the judge’s personal schedule)—consistent with E.D. Va. practice, Judge Ellis has rejected any hint of a continuance. With the Alexandria trial about two weeks away, the parties have filed with the Court their proposed Voir Dire and Jury Instructions. Manafort and the Government have both filed motions in limine, and the Government has responded to Manafort’s motions. The D.C. case is assigned to Judge Amy Berman Jackson; trial is set in the D.C. federal court for September 17, 2018.

On July 6, 2018, Manafort moved for a continuance and also moved for a change to venue to Roanoke, Virginia.

As with most white collar criminal cases, the pretrial motions are part of the fabric of the case. Manafort moved in both cases to dismiss the claims against him on the ground that the Special Counsel did not have authority to investigate and bring criminal claims far removed from the 2016 campaign. He has also moved to suppress evidence from the FBI’s search of a storage unit and a subsequent pre-dawn search of his personal residence. The searches apparently yielded extensive financial records and electronic communications records that provide the bases in part for the multiple criminal counts against Manafort.
Manafort is now incarcerated under a ruling in the D.C. case. The Government brought forward evidence that Manafort was communicating with likely Government witnesses against him. Based on evidence of witness tampering, Judge Jackson ordered Manafort to jail. He is being held at the Northern Neck Regional Jail in Warsaw, Virginia, about 2 hours south of Alexandria. On June 28, 2018, Manafort appealed the incarceration ruling (D.C. Cir. Dkt. 18-5193). His first brief with the D.C .Circuit was filed on July 6, 2018.

2.  Manafort’s Challenges to the Special Counsel’s Authority

Manafort moved to dismiss the indictments in both cases. Both judges have now denied Manafort’s motions.

Judge Jackson in the D.C. Case.  In the D.C. case, the court’s Judge Jackson Order Denying Motion to Dismiss summarizes Manafort’s arguments:

[Manafort] contends that when the Acting Attorney General issued the Appointment Order, he exceeded limits imposed on his appointment authority by the Department of Justice Special Counsel Regulations, and that therefore, the Appointment Order, and the acts undertaken by the Special Counsel under its auspices, are invalid. Manafort also argues that even if the appointment was valid, the Special Counsel overstepped the authority he was granted when he investigated and prosecuted the particular charges in this case.

D.C. Order at 2. That is, Manafort does not challenge the Special Counsel statute but argues that the DoJ regulations implementing the statute have been violated.

Manafort’s argument continues that the Special Counsel’s “allegations have nothing to do with the 2016 presidential election or any alleged collusion with Russian officials.” Judge Jackson notes that the emphasis on “collusion” in the argument is misplaced—the word “collusion” does not appear in the Appointment Order or the Scope Memorandum. Judge Jackson summarizes the claims this way:

The Superseding Indictment arises out of the alleged connections between defendant and Russia through his Ukrainian client, and it is not simply limited to events that allegedly took place many years before the campaign. Paragraph 1 of the Superseding Indictment alleges that between at least 2006 and 2015, Manafort acted as an unregistered agent of a foreign government and foreign political parties, specifically, the Government of Ukraine; the former President of Ukraine, Viktor Yanukovych; the Party of Regions (a political party led by Yanukovych); and the Opposition Bloc, “a successor to the Party of Regions after Yanukovych fled to Russia in 2014.

D.C. Order at 14.

Judge Jackson concludes that Appointment Order is valid and comports with the DoJ regulations, and the Appointment Order and Scope Memorandum fully cover the Special Counsel’s investigation into Manafort’s past activity, even activity going back a decade or more.
Looking more broadly at Judge Jackson’s Order, not only are the criminal counts against Manafort within the Special Counsel’s authority, but other persons who were part of the Trump campaign and may be in the Special Counsel’s sights have to take notice that far-reaching indictments are likely within the Special Counsel’s authority as viewed by Judge Jackson.

Judge Ellis in the E.D. Va. Case.  In his (Judge Ellis Memo Denying Motion to Dismiss,) Judge Ellis denies Manafort’s Motion to Dismiss. While he reaches the same legal conclusions as does Judge Jackson, Judge Ellis is plainly uncomfortable with the Government’s prosecution of Manafort. At the May 4th hearing on Manafort’s motion, the judge was quoted by the Washington Post that the investigation and prosecution were targeted by the Special Counsel to “turn the screws and get the information you really want.” The information is what “Mr. Manafort can give you that would reflect on Mr. Trump and lead to his prosecution or impeachment.”

From the start of his opinion, Judge Ellis views the investigation through a different lens. He describes the tax and bank fraud counts as:

… brought by a Special Counsel appointed by the Acting Attorney General to investigate collusion between President Trump’s campaign for the presidency and the Russian government in connection with the 2016 Presidential election.

E.D. Va. Order at 1.

Manafort’s arguments to Judge Ellis, while first stated in broad and compelling terms, quickly focus on the specifics of the Special Counsel’s authority under the DoJ regulations and the delegation under those regulations. The argument seemingly resonated with Judge Ellis, but in Manafort’s case the authority for the Special Counsel’s investigative and prosecutorial authority comes from the May 17 Appointment Order supplemented by the August 2 Scope Memorandum. Judge Ellis concedes, “No interpretive gymnastics are necessary to determine that the investigation at issue here falls within this category of allegations described in the August 2 Scope Memorandum.” Id. at 16-17.

Manafort’s E.D. Va. case Motion to Dismiss is denied. But Judge Ellis cautions that his “conclusion should not be read as approval of the practice of appointing Special Counsel to prosecute cases of alleged high-level misconduct. …” Id. at 30. This cautionary language suggests that Judge Ellis might impose tighter limitations on the Special Counsel’s authority in other circumstances. The judge’s final paragraph summarizes his uneasiness with the overall process and where he believes it could be headed.

This case is a reminder that ultimately, our system of checks and balances and limitations on each branch’s powers, although exquisitely designed, ultimately works only if people of virtue, sensitivity, and courage, not affected by the winds of public opinion, choose to work within the confines of the law. Let us hope that the people in charge of this prosecution, including the Special Counsel and the Assistant Attorney General, are such people. Although this case will continue, those involved should be sensitive to the danger unleashed when political disagreements are transformed into partisan prosecutions.
Id. at 30-31.

3.  Manafort’s Motions to Suppress Evidence

Both courts have considered Manafort’s briefs and heard arguments to suppress evidence from the May 2017 search of a storage unit and the July 2017 search of Manafort’s personal residence. Judge Jackson in the D.C. case has (Judge Jackson Order Denying Motions to Suppress.) Judge Ellis heard arguments on June 29, 2018, and took the motions to suppress under advisement. His rulings are expected shortly.

The Government has explained that it learned of the storage unit from a series of press questions. The storage unit was rented by one of Manafort’s employees in the employee’s name. The FBI approached the former employee; permission to search the unit was quickly granted. The employee had retained a key to the unit—a cursory examination with the employee present followed. The agents then returned to the E.D. Va. court for a warrant authorizing the search of the contents of the multiple boxes and file cabinets in the unit. Judge Buchanan signed the warrant on May 27, 2017. The search followed almost immediately after the warrant was signed.

The FBI’s pre-dawn search of Manafort’s residence was widely reported in the news media. The FBI’s investigation apparently commenced in 2014, and a 41-paragraph affidavit accompanied the application for a search warrant.

4.  E.D. Va. Case to Trial Beginning on July 25

Absent a surprise continuance or venue change, trial before Judge Ellis starts at the Alexandria federal courthouse on Wednesday, July 25, 2018. A 2-week trial is projected. If the trial goes the full two weeks, a jury might return its verdict as late as August 8, 2018. Six weeks later, Manafort faces a second potentially lengthy criminal trial in the D.C. case.

Manafort’s E.D. Va. case motions in limine, filed on June 22, 2018, aim at (1) excluding evidence regarding the Trump campaign and alleged collusion, (2) pushing the D.C. case aside with no reference to that case, and (3) precluding evidence of the witness tampering allegations (which are now separate counts in the D.C. case) and of Manafort’s current incarceration. The Government also filed motions in limine on June 22, 2018. The Government seeks an order precluding Manafort from presenting defense argument or evidence that the prosecution of Manafort is selective or vindictive. The Government also seeks to close-off any argument that the investigation begun in 2014 ended with a decision not to prosecute Manafort.

Judge Ellis has denied the Government’s Motion for a Jury Questionnaire even though Manafort did not object to the request. The proposed Voir Dire from both the Government and from Manafort focus on the widespread reporting in the news media of Manafort’s legal issues, the searches, his arrest, the indictments, and most recently his incarceration.