Manafort trial: Cindy Laporta testifies it was 'wrong' to agree to loan increase on former Trump aide's tax returns

It is a crime in the US not to disclose transactions with or money kept in a foreign country to the American government.

Mr Manafort has denied all charges of such a crime. 

The tax documents preparer Philip Ayliff said he believed a number of foreign companies were clients of Paul Manafort’s; he did not think Mr Manafort controlled them.

“They never told us about any income that was deposited in foreign accounts,” he said.

Court is now on a break for another 20 minutes.

Philip Ayliff, the accountant, is still on the stand, but prosecution has finished its first round of questioning him. The defense team plans to cross-examine him after lunch for about 45 minutes. 

During the break, Paul Manafort’s lead attorney, Kevin Downing, offered a bit of the defense against charges of failure to report foreign bank accounts.

Essentially, Mr Downing argued that if Mr Manafort had known he was doing something illegal, he would not have been so easy to catch.

“Nobody intending to violate the law would leave the evidence around for his accountant to find it,” Mr Downing said in court.

Court is now back after the lunch break. After Mr Manafort's attorney cross-examines accountant Philip Ayliff, prosecutor Uzo Asonye has told the judge they will call Cindy La Porta, another member of the accounting firm.

Ms La Porta is one of the witnesses who has been granted immunity to testify. 

Judge TS Ellis said either side could raise the immunity issue before the jury as she testifies.

Accountant Cindy LaPorta, the first witness granted immunity from prosecution so she would testify in the Paul Manafort trial, has taken the stand.

Ms LaPorta inherited Manafort's account in 2014 from accountant Philip Ayliff, whom she worked with at the tax firm Kositzka, Wicks and Company. 

She is one of five witnesses with immunity on the prosecutors' roster for the trial. Without immunity, the individuals would be able to refrain from answering questions by asserting their Fifth Amendment protection from self-incrimination. 

Before Mr Ayliff finished his testimony, he told the jury he knew of no foreign entities —meaning companies or accounts — that Mr Manafort had in Cyprus. The prosecution has alleged that Mr Manafort used an account in Cyprus to hide money from the US government.

Mr Manafort denies all the charges against him.

Cindy LaPorta, like accountant Philip Ayliff before her, said Paul Manafort never told her about control over foreign companies and bank accounts or about any accountants and tax preparers he had in Cyprus.

Asked if the accountants would have wanted to know that information, Laporta confirmed that they would: “We would always want to know the full picture.”

As he did with Ayliff, Asonye went through a list of over a dozen foreign companies and asked if she knew Mr Manafort controlled them; she said no. 

Prosecutor Uzo Asonye has asked Paul Manafort’s former accountant Cindy LaPorta to detail financial arrangements that prosecutors allege Mr Manafort and his business partner, Rick Gates, used to evade paying taxes, including classifying income from foreign companies as “loans” to themselves.

Ms Laporta testified that she was suspicious of the documentation for loans

“Did you have concerns about representation you received about these foreign loans?” Asonye asked.

“Yes,” she said.

“Did you believe the representations about these foreign loans?”

“No,” she said.

Cindy Laporta has testified it was “wrong” to agree to increase the amount of a loan on Paul Manafort’s 2014 tax returns just before submitting them in 2015. The purported $900,000 loan came from an entity in Cyprus called Telmar Investments, which prosecutors have alleged Mr Manafort controlled.

“I had a couple of choices at that point,” she said.

She had just had a conference call with Rick Gates in which he said Mr Manafort could not afford to pay his taxes and so they had to be reduced, possibly by inflating the value of that loan.

“I could have refused to file the tax return,” which she said could lead to litigation with Mr Manafort’s firm.

“I could have called Mr. Manafort and Mr. Gates liars, but Mr. Manafort was a long-time client of the firm and I did not want to do that either,” she said.

Asked if she regretted her actions, she agreed; “I very much regret it.” She said she was taking responsibility now.

Prosecutors alleged Paul Manafort misled banks when applying for mortgages on two New York City properties, one on Howard Street and another on Union Street.

They showed the jury an email that Manafort sent to David Fallarino at Citizens Bank in January 2016, indicating that the Howard Street property was listed as a second home in his tax returns.

Accountant Cindy Laporta testified that she spoke with the banker from her office in Alexandria and told him the Howard Street property had been used as a second home.

She told the jury that it was "inconsistent" with Manafort's tax filings.