ALEXANDRIA, Va. -- Paul Manafort inflated his business income by millions of dollars and kept his bookkeeper in the dark about the foreign bank accounts he was using to buy luxury items and pay personal expenses, according to testimony and documents during his trial Thursday.
But he otherwise approved "every penny" of the personal bills bookkeeper Heather Washkuhn paid for him, she said during hours on the witness stand.
That testimony is important to special counsel Robert Mueller's team as it looks to rebut defence arguments that Manafort can't be responsible for financial fraud because he left the details of his spending to others. That includes his longtime associate Rick Gates, who pleaded guilty earlier this year and is expected to testify soon as the government's star witness.
"I would say he was very knowledgeable. He was very detail-oriented. He approved every penny of everything we paid," Washkuhn told jurors.
With Washkuhn on the stand, prosecutors showed jurors a series of documents submitted by Manafort to obtain bank loans, including one in which he appeared to inflate the net income of his business by roughly $4 million. Prosecutors say he tried to pass the documents off as coming from her accounting firm.
The fraudulent loan documents came after Manafort's political consulting work in the Ukraine had dried up and as he had begun to financially struggle, prosecutors say. Jurors saw a series of emails Washkuhn sent him in 2016 warning that he was behind on his payments, including to her, and that money was swiftly needed.
Manafort faces charges of bank fraud and tax evasion that could put him in prison for the rest of his life. It's the first courtroom test of Mueller's team, which is tasked with looking into Russia's efforts to interfere with the U.S. election and whether the Trump presidential campaign colluded with Moscow to sway voters.
While the question of collusion remains unanswered, Manafort's financial fraud trial has exposed the lucrative and secretive world of foreign lobbying that made Manafort rich.
Other witnesses testifying this week said Manafort paid them millions from the offshore accounts tied to foreign shell companies for landscaping, expensive clothing and even a karaoke machine.
When prosecutor Greg Andres read off some of the offshore companies to Manafort's bookkeeper, she said Manafort never told her about them. She said she would have documented them for tax purposes if he had.
On cross-examination, Manafort attorney Thomas Zehnle tried to get Washkuhn to say Gates was heavily involved in approving expenses. The Manafort legal team has been working to convince the jury that Gates is to blame rather than their client.
But Washkuhn said that while Gates dealt with some business matters for Manafort's consulting firm, "mainly Mr. Manafort was the approval source."
The federal judge overseeing the trial has questioned the hundreds of exhibits prosecutors want to submit as evidence of Manafort's lavish spending.
U.S. District Judge T.S. Ellis III said Thursday that while the money was relevant, he didn't see the need for prosecutors to "gild the lily," especially considering Manafort's lawyers have not disputed that their client spent his money on luxury items.
"This is a case in which the government has alleged that he underreported his income," Ellis said.
Prosecutors told Ellis they expect to rest their case next week, noting that they are ahead of schedule.
Manafort has a second trial scheduled for September in the District of Columbia. It would address allegations that he acted as an unregistered foreign agent for Ukrainian interests and made false statements to the U.S. government.
Associated Press writer Anne Flaherty contributed to this report.
