Paul Manafort's indictment in federal court in Alexandria

Paul Manafort, a onetime campaign chairman for President Trump, faces bank and tax charges in federal court in Alexandria. The case was brought by the office of Special Counsel Robert S. Mueller III.

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 1 of 37 PageID# 72
FILED

IN OPEN COURT

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTJUCT OF VIRGINIA
Alexandria Division

UNITED STATES OF AMERICA

CLERK, U.S. DISTRICT COURT
ALEXANDRIA. VIRGINIA

*

CRIMINAL NO. 1:18 Cr. 83 (TSE)(S-1)

*
*

COUNTS 1-5: 26U.S.C. ASS 7206(1); 18
U.S.C. ASSASS 2 and 3551 et seq.
Subscribing to False United States

*

V.

*
*

PAUL J. MANAFORT, JR.,

*

(Counts 1 through 5,11 through 14,and

*

24 through 32)

Individual Income Tax Returns

COUNTS 6-10: 26 U.S.C. ASS 7206(2); 18
U.S.C. ASS 3551 et seq.

*

*

and

*

Assisting in the Preparation of False

*

United States Individual Income

RICHARD W. GATES III,

*

(Counts 6 through 10and 15 through 32)

*
*

Defendants.

COUNTS 11-14: 31 U.S.C. ASSASS 5314 and
5322(a); 18 U.S.C. ASSASS 2 and 3551 et seq.

*

Failure To File Reports Of Foreign Bank

*

And Financial Accounts

*
*

*
*
*

COUNTS 15-19: 26 U.S.C. ASS 7206(1);
18 U.S.C. ASSASS 2 and 3551 etsea.
Subscribing to False United States
Individual Income Tax Returns

*
*
*

COUNT 20: 26 U.S.C. ASS 7206(1); 18
U.S.C. ASSASS 2 and 3551 et seq.

*

Subscribing to a False Amended United

*

States Individual Income Tax Return

*
*
*

*
*

COUNTS 21-23: 31 U.S.C. ASSASS 5314 and
5322(a); 18 U.S.C. ASSASS 2 and 3551 et seq.
Failure To File Reports Of Foreign Bank
And Financial Accounts

*

*

COUNT 24: 18 U.S.C. ASSASS 1349 and 3551

*

et seq.

*

Bank Fraud Conspiracy

*
*

COUNT 25: 18 U.S.C. ASSASS 1344, 2, and

*

3551 et seq.

*

Bank Fraud

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 2 of 37 PageID# 73

*
*
*

COUNT 26:18 U.S.C. ASSASS 1349 and 3551
et seq.
Bank Fraud Conspiracy

*

*

COUNTS 27: 18 U.S.C. ASSASS 1344, 2, and

*

3551 et seq.

*

Bank Fraud

*

*
*
*

COUNT 28-29: 18 U.S.C. ASSASS 1349 and
3551 et seq.
Bank Fraud Conspiracy

*

*

COUNT 30: 18 U.S.C. ASSASS 1344,2, and

*

3551 et seq.

*

Bank Fraud

Sf!

*

COUNT 31: 18 U.S.C. ASSASS 1349 and 3551

*

et seq.

*

Bank Fraud Conspiracy

*

*
*

COUNT 32: 18 U.S.C. ASSASS 1344,2, and
3551 et seq.

*

Bank Fraud

*

*

FORFEITURE NOTICE

*
*

SUPERSEDING INDICTMENT

February 2018 Term - At Alexandria. Virginia

THE GRAND JURY CHARGES THAT:
Introduction

At all times relevant to this Superseding Indictment:
1.

Defendants PAUL J. MANAFORT, JR. (MANAFORT) and RICHARD W. GATES III

(GATES) served for years as political consultants and lobbyists. Between at least 2006 and2015,

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 3 of 37 PageID# 74

MANAFORT and GATES acted as unregistered agents of a foreign government and foreign
political parties. Specifically, they represented the Government of Ukraine, the President of
Ukraine (Victor Yanukovych, who was President from 2010 to 2014), the Party of Regions (a
Ukrainian political party led by Yanukovych), and the Opposition Bloc (a successor to the Party

of Regions after Yanukovych fled to Russia).
2.

MANAFORT and GATES generated tens ofmillions ofdollars in income as a result oftheir

Ukraine work. From approximately 2006 through the present, MANAFORT and GATES engaged
in a scheme to hide income from United States authorities, while enjoying the use of the money.
During the first part of the scheme between approximately 2006 and 2015, MANAFORT, with
GATES' assistance, failed to pay taxes on this income by disguising it as alleged "loans" from

nominee offshore corporate entities and by making millions of dollars in unreported payments

from foreign accounts to bank accounts they controlled and United States vendors. MANAFORT
also used the offshore accounts to purchase United States real estate, and MANAFORT and
GATES used the undisclosed income to make improvements to and refinance their United States
properties.

3.

In the second part of the scheme, between approximately 2015 and at least January 2017,

when the Ukraine income dwindled after Yanukovych fled to Russia, MANAFORT, with the

assistance of GATES, extracted money from MANAFORT's United States real estate by, among
other things, using those properties as collateral to obtain loans from multiple financial institutions.
MANAFORT and GATES fraudulently secured more than twenty million dollars in loans by
falsely inflating MANAFORT's and his company's income and by failing to disclose existing debt
in order to qualify for the loans.
4.

In furtherance of the scheme, MANAFORT and GATES funneled millions of dollars in
3

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 4 of 37 PageID# 75

payments intonumerous foreign nominee companies andbankaccounts, opened by themandtheir
accomplices in nominee names and in various foreign countries, including Cyprus, SaintVincent
& the Grenadines (Grenadines), and the Seychelles. MANAFORT and GATES hid the existence

and ownership of the foreign companies and bank accounts, falsely and repeatedly reporting to
their tax preparers and to the United Statesthat they had no foreign bank accounts.

5.

In furtherance of the scheme, MANAFORT used his hidden overseas wealth to enjoy a

lavishlifestyle in the United States, without paying taxes on that income. MANAFORT, without

reporting the income to his tax preparer or the United States, spent millions of dollars on luxury
goods and services for himself and his extended family through payments wired from offshore
nominee accounts to United States vendors. MANAFORT also used these offshore accounts to

purchase multi-million dollar properties in the United States andto improve substantially another
property owned by his family.
6.

In furtherance ofthe scheme, GATES used millions of dollars from these offshore accounts

to pay for his personal expenses, including his mortgage, children's tuition, and interior decorating
and refinancing of his Virginia residence.

7.

In total, morethan $75,000,000 flowed through the offshore accounts. MANAFORT, with

the assistance of GATES, laundered more than $30,000,000, income that he concealed from the

United States Department of the Treasury (Treasury), the Department of Justice, and others.
GATES obtained more than $3,000,000 from the offshore accounts, income that he too concealed
from the Treasury, the Department of Justice, and others.

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 5 of 37 PageID# 76

Relevant Individuals And Entities

8.

MANAFORT was a United States citizen. He resided in homes in Virginia, Florida, and

Long Island, New York.

9.

GATES was a United States citizen. He resided in Virginia.

10.

In 2005, MANAFORT andanother partner created Davis Manafort Partners, Inc. (DMP) to

engage principally in political consulting. DMP had staff in the United States, Ukraine, and

Russia. In 2011, MANAFORT created DMP International, LLC (DMI) to engage in work for
foreign clients, in particular political consulting, lobbying, and publicrelations for the Government

of Ukraine, the Party of Regions, and members of the Party of Regions. DMI was a partnership
solely owned by MANAFORT and his spouse. GATES worked for both DMP and DMI and
served as MANAFORT's right-hand man.

11.

The Party of Regions was a pro-Russia political party in Ukraine.

Beginning in

approximately 2006, it retained MANAFORT, through DMP and then DMI, to advance its

interests in Ukraine, the United States, and elsewhere, including the election of its slate of
candidates. In 2010, its candidate for President, Yanukovych, was elected President of Ukraine.

In 2014, Yanukovych fled Ukraine for Russia in the wake of popular protests of widespread
governmental corruption. Yanukovych, the Party of Regions, and the Government of Ukraine
were MANAFORT, DMP, and DMI clients.

12.

MANAFORT and GATES owned or controlled the following entities, which were used in

the scheme (the MANAFORT-GATES entities):
Domestic Entities

"it

-

' <

' -'"-J

' 7?*aC/ . '

'' :

^Incorporation; LocationgE^>: - .

Bade LLC (RG)

January 2012

Delaware

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 6 of 37 PageID# 77

Enlll^Paiher
August 2008

Virginia

March 2011

Florida

March 2007

Delaware

March 2005

Virginia

March 2011

Florida

October 1999

Delaware

November 1999

Virginia

June 2011

Delaware

March 2012

Florida

Global Sites LLC (PM, RG)

July 2008

Delaware

Jemina LLC (RG)

July 2008

Delaware

Jesand Investment Corporation (PM)

April 2002

Virginia

Jesand Investments Corporation (PM)

March 2011

Florida

April 2006

Virginia

March 2011

Florida

Jupiter Holdings Management, LLC
(RG)

January 2011

Delaware

Lilred, LLC (PM)

December 2011

Florida

LOAV Ltd. (PM)

April 1992

Delaware

MC Brooklyn Holdings, LLC (PM)

November 2012

New York

January 2012

Florida

April 2012

New York

July 2008

Delaware

Daisy Manafort, LLC (PM)

Davis Manafort International LLC

(PM)

DMP (PM)

Davis Manafort, Inc. (PM)

DMI (PM)

John Hannah, LLC (PM)

MC Soho Holdings, LLC (PM)
Smythson LLC (also known as
Symthson LLC) (PM, RG)

6

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 7 of 37 PageID# 78

Cvpriot Entities

Entity Name

Date Created

Incorporation Location

Actinet Trading Limited (PM, RG)

May 2009

Cyprus

Black Sea View Limited (PM, RG)

August 2007

Cyprus

Bletilla Ventures Limited (PM, RG)

October 2010

Cyprus

Cavenari Investments Limited (RG)

December 2007

Cyprus

Global Highway Limited (PM, RG)

August 2007

Cyprus

Leviathan Advisors Limited (PM, RG)

August 2007

Cyprus

LOAV Advisors Limited (PM, RG)

August 2007

Cyprus

Lucicle Consultants Limited (PM, RG)

December 2008

Cyprus

Marziola Holdings Limited (PM)

March 2012

Cyprus

Olivenia Trading Limited (PM, RG)

March 2012

Cyprus

Peranova Holdings Limited (Peranova)
(PM, RG)

June 2007

Cyprus

Serangon Holdings Limited (PM, RG)

January 2008

Cyprus

Yiakora Ventures Limited (PM)

February 2008

Cyprus

Other Foreign Entities

Entity Name

Date Created

Incorporation Location

Global Endeavour Inc. (also known as
Global Endeavor Inc.) (PM)

Unknown

Grenadines

Jeunet Ltd. (PM)

August 2011

Grenadines

Pompolo Limited (PM, RG)

April 2013

United Kingdom

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 8 of 37 PageID# 79

13.

The Internal Revenue Service (IRS) was a bureau in the Treasury responsible for

administering the tax laws of the United States andcollecting taxes owed to the Treasury.
The Tax Scheme

MANAFORT And GATES' Wiring Monev From Offshore Accounts Into The United States

14.

In order to use the money in the offshore nominee accounts of the MANAFORT-GATES

entities without paying taxes on it, MANAFORT and GATES caused millions of dollars in wire

transfers from these accounts to be made for goods, services, and real estate. They did not report
these transfers as income.

15.

From 2008 to 2014, MANAFORT caused the following wires, totaling over $12,000,000,

to be sent to the vendors listed below for personal items. MANAFORT did not pay taxes on this
income, which was used to make the purchases.
Payee

Transaction

Originating Account

Date

Holder

Vendor A

6/10/2008

LOAV Advisors Limited

(Home
Improvement
Company in the
Hamptons, New
York)

6/25/2008

LOAV Advisors Limited

7/7/2008

LOAV Advisors Limited

8/5/2008

Yiakora Ventures Limited

9/2/2008

Yiakora Ventures Limited

10/6/2008

Yiakora Ventures Limited

10/24/2008

Yiakora Ventures Limited

11/20/2008

Yiakora Ventures Limited

12/22/2008

Yiakora Ventures Limited

1/14/2009

Yiakora Ventures Limited

1/29/2009

Yiakora Ventures Limited

2/25/2009

Yiakora Ventures Limited

4/16/2009

Yiakora Ventures Limited

5/7/2009

Yiakora Ventures Limited

5/12/2009

Yiakora Ventures Limited

6/1/2009

Yiakora Ventures Limited

6/18/2009

Yiakora Ventures Limited

7/31/2009

Yiakora Ventures Limited

Country of
Origination
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus

Amount of

Transaction

$107,000
$23,500
$20,000
$59,000
$272,000
$109,000
$107,800
$77,400
$100,000
$9,250
$97,670
$108,100
$94,394
$54,000
$9,550
$86,650
$34,400
$106,000

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 9 of 37 PageID# 80

Payee

Transaction

Originating Account

Amount of

Date

Holder

Transaction

Country of
Origination
8/28/2009 Yiakora Ventures Limited
Cyprus
9/23/2009 Yiakora Ventures Limited
Cyprus
10/26/2009 Yiakora Ventures Limited
Cyprus
11/18/2009 Global Highway Limited
Cyprus
3/8/2010 Global Highway Limited
Cyprus
5/11/2010 Global Highway Limited
Cyprus
7/8/2010 Global Highway Limited
Cyprus
7/23/2010 Leviathan Advisors Limited Cyprus
8/12/2010 Leviathan Advisors Limited Cyprus
9/2/2010 Yiakora Ventures Limited
Cyprus
10/6/2010 Global Highway Limited
Cyprus
10/14/2010 Yiakora Ventures Limited
Cyprus
10/18/2010 Leviathan Advisors Limited Cyprus
12/16/2010 Global Highway Limited
Cyprus
2/7/2011 Global Highway Limited
Cyprus
3/22/2011 Leviathan Advisors Limited Cyprus
4/4/2011 Leviathan Advisors Limited Cyprus
5/3/2011 Global Highway Limited
Cyprus
5/16/2011 Leviathan Advisors Limited Cyprus
5/31/2011 Leviathan Advisors Limited Cyprus
6/27/2011 Leviathan Advisors Limited
Cyprus
7/27/2011 Leviathan Advisors Limited Cyprus
10/24/2011 Global Highway Limited
Cyprus
10/25/2011 Global Highway Limited
Cyprus
11/15/2011 Global Highway Limited
Cyprus
11/23/2011 Global Highway Limited
Cyprus
11/29/2011 Global Highway Limited
Cyprus
12/12/2011 Leviathan Advisors Limited Cyprus
1/17/2012 Global Highway Limited
Cyprus
1/20/2012 Global Highway Limited
Cyprus
2/9/2012 Global Highway Limited
Cyprus
2/23/2012 Global Highway Limited
Cyprus
2/28/2012 Global Highway Limited
Cyprus
3/28/2012 Peranova
Cyprus
4/18/2012 Lucicle Consultants Limited Cyprus
5/15/2012 Lucicle Consultants Limited Cyprus
6/5/2012 Lucicle Consultants Limited Cyprus
6/19/2012 Lucicle Consultants Limited Cyprus

$37,000
$203,500
$38,800
$130,906
$124,000
$25,000
$28,000
$26,500
$138,900
$31,500
$67,600
$107,600
$31,500
$46,160
$36,500
$26,800
$195,000
$95,000
$6,500
$70,000
$39,900
$95,000
$22,000
$9,300
$74,000
$22,300
$6,100
$17,800
$29,800
$42,600
$22,300
$75,000
$22,300
$37,500
$50,000
$79,000
$45,000
$11,860

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 10 of 37 PageID# 81

Payee

Transaction

Originating Account

Amount of

Date

Holder

Transaction

Country of
Origination
7/9/2012 Lucicle Consultants Limited Cyprus
7/18/2012 Lucicle Consultants Limited Cyprus
8/7/2012 Lucicle Consultants Limited Cyprus
9/27/2012 Lucicle Consultants Limited Cyprus
11/20/2012 Lucicle Consultants Limited Cyprus
12/20/2012 Lucicle Consultants Limited Cyprus
1/29/2013 Lucicle Consultants Limited Cyprus
3/12/2013 Lucicle Consultants Limited C3^rus
8/29/2013

Global Endeavour Inc.

Grenadines

11/13/2013

Global Endeavour Inc.

Grenadines

11/26/2013

Global Endeavour Inc.

Grenadines

12/6/2013

Global Endeavour Inc.

Grenadines

12/12/2013

Global Endeavour Inc.

Grenadines

4/22/2014

Global Endeavour Inc.

Grenadines

8/18/2014

Global Endeavour Inc.

Grenadines

Vendor A Total
Vendor B

Cyprus
3/28/2011 Leviathan Advisors Limited Cyprus
4/27/2011 Leviathan Advisors Limited Cyprus
5/16/2011 Leviathan Advisors Limited Cyprus
11/15/2011 Global Highway Limited
Cyprus
11/23/2011 Global Highway Limited
Cyprus
2/28/2012 Global Highway Limited
Cyprus
10/31/2012 Lucicle Consultants Limited Cyprus
12/17/2012 Lucicle Consultants Limited Cyprus
1/15/2013 Lucicle Consultants Limited Cyprus
1/24/2013 Lucicle Consultants Limited Cyprus
2/12/2013 Lucicle Consultants Limited Cyprus
2/26/2013 Lucicle Consultants Limited Cyprus
3/22/2011

Leviathan Advisors Limited

7/15/2013

Pompolo Limited

11/5/2013

Global Endeavour Inc.

Vendor C

10/7/2008

Yiakora Ventures Limited

(Antique Rug

3/17/2009

Yiakora Ventures Limited

Store in

4/16/2009

Yiakora Ventures Limited

Alexandria,

4/27/2009

Yiakora Ventures Limited

5/7/2009

Yiakora Ventures Limited

(Home
Automation,
Lighting and
Home

Entertainment

Company in
Florida)

United

Kingdom
Grenadines

Vendor B Total

Virginia)

10

Cyprus
Cyprus
Cyprus
Cyprus
Cyprus

$10,800
$88,000
$48,800
$100,000
$298,000
$55,000
$149,000
$375,000
$200,000
$75,000
$80,000
$130,000
$90,000
$56,293
$34,660
$5,434,793
$12,000
$25,000
$12,000
$25,000
$17,006
$11,000
$6,200
$290,000
$160,600
$194,000
$6,300
$51,600
$260,000
$175,575

$73,000
$1,319,281
$15,750
$46,200
$7,400
$65,000
$210,000

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 11 of 37 PageID# 82

Payee

Transaction

Originating Account

Date

Holder

7/15/2009

Yiakora Ventures Limited

3/31/2010

Yiakora Ventures Limited

6/16/2010

Global Highway Limited

Country of
Origination
Cyprus
Cj^rus
Cyprus
Vendor C Total

Amount of
Transaction

$200,000
$140,000
$250,000
$934,350

Vendor D

(Related to
Vendor C)

2/28/2012

Global Highway Limited

Cyprus
Vendor D Total

Vendor E

(Men's Clothing
Store in New

York)

8/7/2012

Lucicle Consultants Limited

11/20/2012

Lucicle Consultants Limited

12/20/2012

Lucicle Consultants Limited

1/15/2013

Lucicle Consultants Limited

2/12/2013

Lucicle Consultants Limited

2/26/2013

Lucicle Consultants Limited

Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
C5^rus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus

Global Endeavour Inc.

Grenadines

11/7/2008

Yiakora Ventures Limited

2/5/2009

Yiakora Ventures Limited

4/27/2009

Yiakora Ventures Limited

10/26/2009

Yiakora Ventures Limited

3/30/2010

Yiakora Ventures Limited

5/11/2010

Global Highway Limited

6/28/2010

Leviathan Advisors Limited

8/12/2010

Leviathan Advisors Limited

11/17/2010

2/7/2011

Global Highway Limited
Global Highway Limited

3/22/2011

Leviathan Advisors Limited

3/28/2011

Leviathan Advisors Limited

4/27/2011

Leviathan Advisors Limited

6/30/2011

Global Highway Limited

9/26/2011

Leviathan Advisors Limited

11/2/2011

Global Highway Limited

12/12/2011

Leviathan Advisors Limited

2/28/2012

Global Highway Limited
Global Highway Limited

3/14/2012

Lucicle Consultants Limited

4/18/2012

Lucicle Consultants Limited

5/15/2012

Lucicle Consultants Limited

6/19/2012

Lucicle Consultants Limited

2/9/2012

9/3/2013

11

$100,000
$100,000
$32,000
$22,750

$13,500
$32,500
$15,000
$39,000
$5,000
$32,500
$11,500
$24,000
$43,600
$12,000
$3,000
$24,500
$12,000
$26,700
$46,000
$2,800
$16,000
$8,000
$48,550
$7,000
$21,600
$15,500
$10,900
$7,500
$37,000
$7,000
$39,000
$81,500

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 12 of 37 PageID# 83

Payee

Transaction

Originating Account

Date

Holder

10/15/2013

Global Endeavour Inc.

Grenadines

11/26/2013

Global Endeavour Inc.

Grenadines

4/24/2014

Global Endeavour Inc.

Grenadines

9/11/2014

Global Endeavour Inc.

Grenadines

Vendor F

4/27/2009

(Landscaper in
the Hamptons,
New York)

5/12/2009
6/1/2009
6/18/2009

9/21/2009
5/11/2010

6/28/2010
7/23/2010

9/2/2010
10/6/2010
10/18/2010
12/16/2010
3/22/2011
5/3/2011

6/1/2011

7/27/2011
8/16/2011
9/19/2011
10/24/2011

11/2/2011

Vendor G

(Antique Dealer
in New York)

9/2/2010
10/18/2010
2/28/2012
3/14/2012
2/26/2013

VendorH

(Clothing Store
in Beverly Hills,
California)

Country of
Origination

6/25/2008
12/16/2008

12/22/2008

8/12/2009
5/11/2010

11/17/2010

Vendor E Total
Yiakora Ventures Limited
Cyprus
Yiakora Ventures Limited
Cyprus
Yiakora Ventures Limited
Cyprus
Yiakora Ventures Limited
Cyprus
Yiakora Ventures Limited
Cyprus
Global Highway Limited
Cyprus
Leviathan Advisors Limited Cyprus
Leviathan Advisors Limited Cyprus
Yiakora Ventures Limited
Cyprus
Global Highway Limited
Cyprus
Leviathan Advisors Limited Cyprus
Global Highway Limited
Cyprus
Leviathan Advisors Limited Cyprus
Global Highway Limited
Cyprus
Leviathan Advisors Limited Cyprus
Leviathan Advisors Limited Cyprus
Leviathan Advisors Limited Cyprus
Leviathan Advisors Limited Cyprus
Global Highway Limited
Cyprus
Global Highway Limited
Cj^rus
Vendor F Total
Yiakora Ventures Limited
Cyprus
Leviathan Advisors Limited Cyprus
Global Highway Limited
Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Vendor G Total
LOAV Advisors Limited
Cyprus
Yiakora Ventures Limited
Cyprus
Yiakora Ventures Limited
Cyprus
Yiakora Ventures Limited
Cyprus
Global Highway Limited
Cyprus
Global Highway Limited
Cyprus
12

Amount of
Transaction

$53,000
$13,200
$26,680
$58,435
$849,215
$34,000
$45,700
$21,500
$29,000
$21,800
$44,000
$50,000
$19,000
$21,000
$57,700
$26,000
$20,000
$50,000
$40,000
$44,000
$27,000
$13,450
$12,000
$42,000
$37,350
$655,500
$165,000
$165,000
$190,600
$75,000
$28,310
$623,910
$52,000
$49,000
$10,260
$76,400
$85,000
$128,280

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 13 of 37 PageID# 84

Payee

Transaction

Originating Account

Amount of

Date

Holder

Transaction

Country of
Origination
5/31/2011 Leviathan Advisors Limited Cyprus
11/15/2011 Global Highway Limited
Cyprus
12/17/2012 Lucicle Consultants Limited Cyprus
Vendor H Total

$64,000
$48,000
$7,500
$520,440

Vendor I

(Investment
Company)
Vendor J

(Contractor in
Florida)

9/3/2013

2/12/2013
7/15/2013

Pompolo Limited

11/15/2011

12/5/2011

12/21/2011

5/17/2012

6/19/2012
7/18/2012
9/19/2012

11/30/2012
1/9/2013

2/28/2013

(Landscaper in
the Hamptons,
New York)

12/5/2011
3/1/2012
6/6/2012
6/25/2012

6/27/2012

11/26/2013

Vendor L

(Payments
Relating to Three
Range Rovers)
Vendor M

Grenadines

Vendor I Total
Global Highway Limited
Cyprus
Leviathan Advisors Limited Cyprus
Black Sea View Limited
Cyprus
Global Highway Limited
Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Vendor J Total
Leviathan Advisors Limited Cyprus
Global Highway Limited
Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus

2/9/2012

VendorK

Global Endeavour Inc.

Global Endeavour Inc.

United

Kingdom
Grenadines

Vendor K Total
4/12/2012 Lucicle Consultants Limited Cyprus
5/2/2012 Lucicle Consultants Limited Cyprus
6/29/2012

Lucicle Consultants Limited

11/20/2012

Lucicle Consultants Limited

12/7/2012

Cyprus

Vendor L Total
Cyprus
Lucicle Consultants Limited Cyprus
13

$500,000
$500,000
$8,000
$11,237
$20,000
$51,000
$68,000
$60,000
$32,250
$112,000
$39,700
$25,600
$4,700
$432,487
$4,115
$50,000
$47,800
$17,900
$18,900
$3,300

$13,325
$9,400
$164,740
$83,525
$12,525
$67,655

$163,705
$45,000
$21,000

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 14 of 37 PageID# 85

Payee
(Contractor in
Virginia)

Transaction

Originating Account

Date

Holder

4/23/2010

Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Lucicle Consultants Limited Cyprus
Vendor M Total
Yiakora Ventures Limited
Cyprus
Yiakora Ventures Limited
Cyprus
Yiakora Ventures Limited
Cyprus
Global Highway Limited
Cyprus
Global Highway Limited
Cyprus
Yiakora Ventures Limited
Cyprus

7/29/2010

Leviathan Advisors Limited

12/17/2012
1/17/2013
1/29/2013
2/12/2013

Vendor N

1/29/2009

(Audio, Video,

3/17/2009

and Control

4/16/2009

System Home
Integration and

12/2/2009

Installation

Company in the
Hamptons, New
York)

Country of
Ongination

3/8/2010

Lucicle Consultants Limited

Cyprus

Vendor N Total

Amount of
Transaction

$21,000
$18,750
$9,400
$10,500
$125,650
$10,000
$21,725
$24,650
$10,000
$20,300
$8,500
$17,650
$112,825

Vendor O

(Purchase of
Mercedes Benz)

10/5/2012

Lucicle Consultants Limited

Cyprus

Vendor O Total

$62,750

$62,750

Vendor P

(Purchase of
Range Rover)
Vendor Q
(Property
Management
Company in
South Carolina)

12/30/2008

Vendor P Total
9/2/2010 Yiakora Ventures Limited
Cyprus
10/6/2010 Global Highway Limited
Cyprus
10/18/2010 Leviathan Advisors Limited Cyprus
2/8/2011 Global Highway Limited
Cyprus
2/9/2012

Vendor R

Cyprus

Yiakora Ventures Limited

2/9/2011

Global Highway Limited

Global Highway Limited

Cyprus
Vendor Q Total
Cyprus

(Art Gallery in
Florida)

2/14/2013

Vendor S

Vendor R Total
9/26/2011 Leviathan Advisors Limited Cyprus
9/19/2012 Lucicle Consultants Limited Cyprus

Lucicle Consultants Limited

14

Cyprus

$47,000

$47,000
$10,000
$10,000
$10,000
$13,500
$2,500

$46,000
$17,900
$14,000

$31,900
$5,000
$5,000

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 15 of 37 PageID# 86

Payee

Transaction

Originating Account

Date

Holder

(Housekeepmg
in New York)

16.

10/9/2013

Country of
Origination

Global Endeavour Inc.

Amount of
Transaction

Grenadines

$10,000

Vendor S Total

$20,000

In 2012, MANAFORT caused the following wires to be sent to the entities listed below to

purchase the real estate also listed below. MANAFORT did not reportthe money used to make
these purchases on his 2012 tax return.

Property
Purchased

Payee

Howard Street

DMP

Condominium

International

(New York)

LLC

Union Street

Brownstone,
(New York)

Arlington
House

(Virginia)

Attorney
Accoimt Of

[Real Estate
Attorney]
Real Estate
Trust

Originating

Date

2/1/2012

11/29/2012
11/29/2012

8/31/2012

Account

Peranova

Actinet Trading
Limited

Actinet Trading
Limited

Lucicle Consultants
Limited

Country of
Origin

Amount

Cyprus

$1,500,000

Cyprus

$1,800,000

C)^rus

$1,200,000

Cyprus

$1,900,000

Total

17.

$6,400,000

MANAFORT and GATES also disguised, as purported "loans," more than $10 million

transferred from Cypriot entities, including the overseas MANAFORT-GATES entities, to
domestic entities owned by MANAFORT. For example, a $1.5 million wire from Peranova to
DMI that MANAFORT used to purchase real estate on Howard Street in Manhattan, New York,

was recorded as a "loan" from Peranova to DMI,ratherthan as income. The following loanswere
shams designed to reduce fraudulently MANAFORT's reported taxable income.

15

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 16 of 37 PageID# 87

Year

Payor / Ostensible

Payee / Ostensible

"Lender"

"Borrower"

Jesand Investment

2008

Yiakora Ventures Limited

2008

Yiakora Ventures Limited

DM?

2009

Yiakora Ventures Limited

DMP

Corporation

2009

Yiakora Ventures Limited

Daisy Manafort, LLC

2012

Peranova

DMI

2014

Telmar Investments Ltd.

DMI

2015

Telmar Investments Ltd.

DMI

Country of
Origin

of "Loans"

Cyprus

$8,120,000

Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus

$500,000
$694,000
$500,000
$1,500,000
$900,000
$1,000,000

Total

18.

Total Amount

$13,214,000

From 2010 to 2014, GATES caused the following wires, totaling more than $3,000,000, to

be sent to entities and bank accounts ofwhich he was a beneficial owner or he otherwise controlled.

GATES did not report this income on his tax returns.

Payee

Transaction

Originating Account

Date

Holder

Serangon Holdings Limited
Serangon Holdings Limited
5/6/2010 Serangon Holdings Limited
9/7/2010 Serangon Holdings Limited

Richard Gates

3/26/2010

United Kingdom

4/20/2010

Bank Account A

Richard Gates

United Kingdom
Bank Account B

Richard Gates
United States

10/13/2010

9/27/2010

Country of
Origination
Cyprus
Cyprus
Cyprus
Cyprus

Amount of
Transaction

$85,000
$50,000
$150,000
$160,000

Serangon Holdings Limited

Cyprus

$15,000

Global Highway Limited

Cyprus

$50,000

2010 Tax Year Total

$510,000

Bank Account C

Jemina LLC
United States

9/9/2011

Peranova

Cyprus

$48,500

12/16/2011

Peranova

Cyprus

$100,435

Bank Account D
Richard Gates

United Kingdom
Bank Account B

Richard Gates

United Kingdom
Bank Account B

2011 Tax Year Total
1/9/2012 Global Highway Limited
Cyprus
1/13/2012 Peranova
Cyprus
2/29/2012 Global Highway Limited
Cyprus
3/27/2012 Bletilla Ventures Limited
Cyprus
16

$148,935
$100,000
$100,435
$28,500
$18,745

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 17 of 37 PageID# 88

Payee

Transaction
Date

4/26/2012

5/30/2012
5/30/2012
6/27/2012
8/2/2012
8/30/2012
9/27/2012
10/31/2012
11/20/2012
11/30/2012
12/21/2012
12/28/2012

Richard Gates

1/11/2013

United Kingdom

1/22/2013

Bank Account B

1/30/2013
2/22/2013

2/28/2013
3/1/2013
3/15/2013

4/15/2013
4/26/2013

5/17/2013
5/30/2013
6/13/2013
8/7/2013

Jemina LLC
United States
Bank Account D

Country of
Origination
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Lucicle Consultants Limited Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
2012 Tax Year Total
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Bletilla Ventures Limited
Cyprus
Olivenia Trading Limited
Cyprus
Actinet Trading Limited
Cyprus
Lucicle Consultants Limited Cyprus
Holder

Pompolo Limited

United

Kingdom

Cyprus
9/13/2013 Cypriot Agent
Cyprus
7/8/2013 Marziola Holdings Limited
Cyprus
9/4/2013 Marziola Holdings Limited
Cyprus
10/22/2013 Cypriot Agent
Cyprus
11/12/2013 Cypriot Agent
Cyprus
12/20/2013 Cypriot Agent
Cyprus
2013 Tax Year Total
2/10/2014 Cypriot Agent
Cyprus
4/29/2014 Cypriot Agent
Cyprus
9/6/2013

Jemina LLC
United States
Bank Account D

Originating Account

10/6/2014

Lucicle Consultants Limited

Global Endeavour Inc.
17

Grenadines

Amount of
Transaction

$26,455
$15,000
$14,650
$18,745
$28,745
$38,745
$32,345
$46,332
$48,547
$38,532
$47,836
$47,836
$651,448
$47,836
$34,783
$46,583
$46,233
$46,583
$42,433
$37,834
$59,735
$48,802
$57,798
$45,622
$76,343

$250,784
$68,500
$179,216
$72,500
$89,807
$119,844
$80,000
$90,000
$1,541,237
$60,044
$44,068
$65,000

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 18 of 37 PageID# 89

Payee

Transaction

Originating Account

Date

Holder

Countiyof
Origination

Amount of
Transaction

Bade LLC
United States
Bank Account E

11/25/2014

Global Endeavour Inc.

Grenadines

2014 Tax Year Total

$120,000

$289,112

MANAFORT And GATES' Hiding Foreign Bank Accounts And False Filings

19.

United States citizens who have authority over certainforeign bank accountsa^whether or

notthe accounts are setup in thenames of nominees who act for their principalsa^have reporting
obligations to the United States.

20.

First, the Bank Secrecy Act and its implementing regulations require United States citizens

to reportto the Treasury any financial interest in, or signatory authority over,any bank account or

other financial account held in foreign countries, for every calendar year in which the aggregate
balance of all such foreign accounts exceeds $10,000 at any point during the year. This is
commonly known as a foreign bank account report or "FBAR." The Bank Secrecy Act requires

these reports because they have a high degree of usefiilness in criminal, tax, or regulatory
investigations or proceedings. The Treasury's Financial Crimes Enforcement Network (FinCEN)
is the custodian for FBAR filings, and FinCEN provides access to its FBAR database to law

enforcement entities, including the Federal Bureau of Investigation.

The reports filed by

individuals and businesses are used by law enforcement to identify, detect, and deter money
laundering that furthers criminal enterprise activity, tax evasion, and other unlawful activities.

21.

Second, United States citizens also are obligated to report information to the IRS regarding

foreign bank accounts. For instance, in 2010, Schedule B of IRS Form 1040 had a "Yes" or "No"

boxto record an answer to the question: "At anytime during [the calendar year], did you have an
interest in or a signature or otherauthority overa financial account in a foreign country, suchas a
18

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 19 of 37 PageID# 90

bank account, securities account, or other financial account?" If the answer was "Yes," then the
form required the taxpayer to enterthe name of the foreign country in which the financial account
was located.

22.

For each year in or about and between 2008 through at least 2014, MANAFORT had

authority over foreign accounts that required an FBAR filing. Specifically, MANAFORT was
required to report to the Treasury each foreign bank account held by the foreign MANAFORT-

GATES entities noted above in paragraph 12 that bears the initials PM. No FBAR filings were
made by MANAFORT for these accounts.

23.

For each year in or about and between 2010 through at least 2013, GATES had authority

over foreign accounts that required an FBAR filing. Specifically, GATES was required to report
to the United States Treasury each foreign bank account held by the foreign MANAFORTGATES entities notedabove in paragraph 12that bearsthe initials RG, as wellas United Kingdom
Bank AccountsA and B noted in paragraph 18. No FBAR filings were made by GATES for these
accounts.

24.

Furthermore, in each of MANAFORT's tax filings for 2008 through 2014, MANAFORT,

with the assistance of GATES, represented falsely that he did not have authority over any foreign

bank accounts. MANAFORT and GATES had repeatedly and falsely represented in writing to
MANAFORT's tax preparer that MANAFORT had no authority over foreign bank accounts,
knowing that such false representations would result in false tax filings in MANAFORT's name.

Forinstance, on October 4,2011, MANAFORT's taxpreparer asked MANAFORT in writing: "At
any time during 2010, did you [or your wife or children] have an interest in or a signatureor other
authority over a financial account in a foreign country, such as a bank account, securities account

or other financial account?"

On the same day, MANAFORT falsely responded "NO."
19

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 20 of 37 PageID# 91

MANAFORT responded the same way as recently as October 3, 2016, when MANAFORT's tax

preparer again emailed the question in connection with the preparation of MANAFORT's tax

returns: "Foreign bank accounts etc.?" MANAFORT responded on or about the same day:
"NONE."

25.

In each of GATES' tax filings for 2010 through 2013, GATES represented falsely that he

did not have authority over any foreign bank accounts, GATES had repeatedly and falsely
represented to histaxpreparers that hehad no authority over foreign bank accounts, knowing that
such false representations would result in false tax filings. As recently as October 2017, in

preparation for hisamended 2013 taxfiling, GATES was asked byhistaxpreparer: "Did you have
any foreign assets/bank accounts during 2013 or 2014?"to which he responded "no."
The Financial Institution Scheme

26.

Between in or around 2015 andthe present, both dates being approximate andinclusive, in

the Eastern District of Virginia and elsewhere, MANAFORT, GATES, and others devised and

intended to devise, and executed and attempted to execute, a scheme and artifice to defraud, and
to obtain money and property, by means of false and fraudulent pretenses, representations, and
promises, from banks and other financial institutions. As part of the scheme, MANAFORT and
GATES repeatedly provided and caused to be provided false information to banks and other
lenders, among others.
MANAFORT And GATES' Fraud To Access Offshore Monev

27.

When they were flush with Ukraine funds, MANAFORT, with the assistance of GATES,

used their offshore accounts to purchase and improve real estate in the United States. When the

income from Ukraine dwindled in 2014 and 2015, MANAFORT, with the assistance of GATES,

obtained millions of dollars in mortgages on the United States properties, thereby allowing
20

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 21 of 37 PageID# 92

MANAFORTto have the benefits of liquid income without paying taxes on it. MANAFORT and
GATES defrauded the lenders in various ways, including by lying about MANAFORT's and

DMI's income, lyingabouttheir debt, and lying about MANAFORT's use of the property andthe

loan proceeds. For example, MANAFORT and GATES submitted fabricated profit and loss
statements (P&Ls) that inflated income, and they caused others to provide doctored financial
documents.

A. The Loan From Lender A On The Union Street Prooertv

28.

In 2012, MANAFORT, through a corporate vehicle called"MC Brooklyn Holdings, LLC"

owned by him and his family, bought a brownstone on Union Street in the Carroll Gardens section

of Brooklyn, New York. He paid approximately $3,000,000 in cashfor the property. All of that
money came from a MANAFORT-GATES entity in Cyprus. After purchase of the property,

MANAFORT began renovations to transform it from a multi-family dwelling into a single-family
home. MANAFORT used proceeds of a 2015 loan obtained from a financial institution to make

the renovations. In order to obtain that loan, MANAFORT falsely represented to the bank that he
did not derive more than 50% of his income/wealth from a country outside the United States.

29.

In late 2015 through early 2016, MANAFORT sought to borrow cash against the Union

Street property from Lender A. Lender A provided greater loan amounts for "construction

loans"a^that is, loans that required the loan funds to be used to pay solely for constructionon the
property and thus increase the value ofthe property serving as the loan's collateral. The institution

would thus loan money against the expected completedvalue ofthe property, which in the case of
the Union Street property was estimated to be $8,000,000. In early 2016, MANAFORT was able

to obtain a loan of approximately $5,000,000, after promising Lender A that approximately

$1,400,000 of the loan would be used solely for construction on the Union Street property.
21

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 22 of 37 PageID# 93

MANAFORT never intended to limit use of the proceeds to construction as required bythe loan
contracts and never did. In December 2015, before the loan was made, MANAFORT wrote his

tax preparer, among others, that the "construction mortgage will allow me to pay back [another
Manafort apartment] mortgage in full. . . ." Further, when the construction loan closed,
MANAFORT used hundreds of thousands of dollars for purposes unrelated to the construction of
the property.
B. The Loan From Lender B On The Howard Street Prooertv

30.

In 2012, MANAFORT, through a corporate vehicle called "MC Soho Holdings, LLC"

owned by himandhis family, bought a condominium on Howard Street in the Soho neighborhood

of Manhattan, New York. He paid approximately $2,850,000. All the money used to purchase
the condominium came from MANAFORT-GATES entities in Cyprus. MANAFORT used the

property from at least January 2015 through at least August 2017 as an income-generating rental
property, charging thousands of dollarsa weekon Airbnb, among otherplaces. On his tax returns,

MANAFORT tookadvantage of the beneficial tax consequences of owning this rental property.
31.

In late 2015 through early 2016, MANAFORT applied for a mortgageon the Howard Street

condominium from Lender B for approximately $3.4 million. Because the bank would permit a
greater loanamount if the property wereowner-occupied, MANAFORT falsely represented to the

lender and its agents that it was a secondary home used as such by his daughter and son-in-law
and was not held as a rental property. In an email on January 6,2016, MANAFORT noted: "[i]n
order to have the maximum benefit, I am claiming Howard St. as a second home. Not an

investment property." Later, on January 26,2016, MANAFORT wrote to his son-in-law to advise
him that when the bank appraiser came to assess the condominium, his son-in-law should

"[r]emember, he believes that you and [MANAFORT's daughter] are living there."
22

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 23 of 37 PageID# 94

32.

MANAFORT, with GATES' assistance, also made a series of false and fraudulent

representations to the bank in order to secure the millions of dollars in financing. For example,
MANAFORT falsely represented the amount of debthe had by failing to disclose on his loan

application the existence of the Lender A mortgage onhis Union Street property. That liability
wouldhaveriskedhis qualifying for the loan. Through its own due diligence. Lender B found
evidence ofthe existing mortgage on the Union Streetproperty. As a result, Lender B wrote to

MANAFORT and GATES that the "application has the following properties as beingownedfree

& clear... Union Street," but"[b]ased onthe insurance binders thatwereceived last night, we
are showing thatthere are mortgages listed on these properties, can you please clarify[?]"
33.

To cover up the falsity of the loan application, GATES, on MANAFORT's behalf, caused

an insurance broker to provide Lender B false information, namely, an outdated insurance report
thatdidnotlistthe Union Street loan. MANAFORT and GATES knew such a representation was
fraudulent. After GATES contacted the insurance broker andasked herto provide Lender B with

false information, heupdated MANAFORT byemail onFebruary 24,2016. MANAFORT replied
to GATES, on the same day: "good job on the insurance issues."
34.

MANAFORT and GATES submitted additional false and fraudulent statements to Lender

B. For example, MANAFORT submitted 2014 DMI tax returns to support his 2016 loan

application to Lender B. Those tax returns included as a purported liability a $1.5 million loan
from Peranova. Peranova was a Cypriot entity controlled by MANAFORT and GATES. On or

aboutFebruary 1, 2012, Peranova transferred $1.5 million to a DMIaccount in the United States,

denominating thetransfer as a loan so thatMANAFORT would nothave to declare themoney as
income. MANAFORT usedthe "loan" to acquire the Howard Street property.
35.

When MANAFORT needed to obtain a loan from Lender B, the existence of the Peranova
23

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 24 of 37 PageID# 95

"loan" undermined hiscreditworthiness. As a result of the listed Peranova liability, Lender B was
not willing to make the loan to MANAFORT. To circumvent this issue, MANAFORT and
GATES caused MANAFORT's tax accountant to send to Lender B back-dated documentation that

falsely stated that the $1.5 million Peranova loan had been forgiven in 2015, and falsely inflated
income for 2015 to mask MANAFORT's 2015 drop in income.

36.

In March 2016, Lender B approved the loan in the amount of approximately $3.4 million

(the $3.4 million loan).
C. The Loan From Lender C

37.

In approximately February 2016, MANAFORT applied for a business loan from Lender C.

MANAFORT made a series of false statements to Lender C. For example, MANAFORT
submitted a false statement of assets and liabilities that failed to disclosed the Lender A loan on

theUnion Street property andmisrepresented, among other things, the amount ofthe mortgage on
the Howard Street property.
38.

Further, in approximately March 2016, MANAFORT and GATES submitted a doctored

2015 DMI P&L that overstated DMI's 2015 income by more than $4 million. GATES asked

DMI's bookkeeper to sendhim a "WordDocument version of the 2015 P&L for [DMI]" because
MANAFORT wanted GATES "to add the accrual revenue which we have not received in order to

send to [Lender C]." The bookkeeper said she could send a .pdf version ofthe P&L. GATES then

asked the bookkeeper to increase the DMI revenue, falsely claiming that: "[w]e have $2.4m in

accrued revenue that [MANAFORT] wants added to the [DMI] 2015 income. Can you make
adjustments on your endandthenjust send mea newscanned version[?]" The bookkeeper refused

since the accounting method DMI used did not permit recording income before it was actually
received.
24

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 25 of 37 PageID# 96

39.

Having failed to secure a falsified P&L from the bookkeeper, GATES falsified the P&L.

GATES wrote to MANAFORT and another conspirator, "I am editing Paul's 2015 P&L
statement." GATES then sent the altered P&L to Lender C, which claimed approximately $4.45
million in net income, whereas the true P&L had less than $400,000 in net income.
D. The Loan From Lender B On The Union Street Property

40.

In March 2016, MANAFORT, with the assistance of GATES and others, applied fora $5.5

million loan from Lender B on the Union Street property. As part of the loan process,
MANAFORT submitted a false statement of assets and liabilities that hid his prior loan from

Lender A on the Union Street property, among other liabilities. In addition, another conspirator
on MANAFORT's behalf submitted a falsified 2016 DMI P&L. The falsified 2016 DMI P&L

overstated DMI's income by more than $2 million, which was the amount that Lender B told
MANAFORT he needed to qualify for the loan. When the document was first submitted to Lender

B, a conspirator working at Lender B replied: "Looks Dr'd. Can't someone just do a clean excel
doc and pdf to me??" A subsequent version was submitted to the bank.
E. The Loans From Lender D On The Bridgehampton And Union Street Properties

41.

In 2016, MANAFORT soughta mortgage on property in Bridgehampton, New York from

a financial institution. In connection with hisapplication, MANAFORT falsely represented to the
bank that DMI would be receiving $2.4 million in income later in the year for work on a
"democratic development consulting project."

To support this representation, GATES, on

MANAFORT's behalf, provided the bank with a fake invoice for $2.4 million, directed "To Whom

It May Concern," for "[s]ervices rendered per the consultancy agreement pertaining to the
parliamentary elections." The bank, unwilling to rely on the invoice to support MANAFORT's

stated 2016 income, requested additional information. The bank was unable to obtain satisfactory
25

Case 1:18-cr-00083-TSE Document 9 Filed 02/22/18 Page 26 of 37 PageID# 97

supportfor the stated income, and the loan application was denied.

42.

MANAFORT applied to a second bank, Lender D. Between approximately July 2016 and

January 2017, MANAFORT, with the assistance of GATES, sought and secured approximately

$16,000,000 in two loans from Lender D. MANAFORT used the Bridgehampton property as
collateral for one loan, and the Union Streetproperty for the other.

43.

MANAFORT and GATES made numerous false and fraudulent representations to secure

the loans. For example, MANAFORT provided the bank with doctored P&Ls for DMI for both
2015 and 2016, overstating its income by millions of dollars. The doctored 2015 DMI P&L

submitted to Lender D was the same false statement previously submitted to Lender C, which

overstated DMI's income bymore than $4million. The doctored 2016 DMI P&L was inflated by
MANAFORT by more than $3.5 million. To create the false 2016 P&L, on or about October 21,
2016, MANAFORT emailed GATES a .pdf version of the real 2016 DMI P&L, which showed a

loss of more than $600,000. GATES converted that .pdf into a "Word" document so that it could
be edited, which GATES sent back to MANAFORT. MANAFORT altered that "Word" document
by adding more than $3.5 million in income. He then sent this falsified P&L to GATES and asked

that the "Word" document be converted back to a .pdf, which GATES did and returned to

MANAFORT. MANAFORT then sent the falsified 2016DMI P&L .pdfto Lender D.

44.

In addition. Lender D questioned MANAFORT about a $300,000 delinquency on his

American Express card, which was more than 90 days past due. The delinquency significantly
affected MANAFORT's credit rating score. MANAFORT falsely represented to Lender D that

he had lent his credit card to a friend, GATES, who had incurred the charges and had not
reimbursed him. MANAFORT supplied Lender D a letter from GATES that falsely stated that

26

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GATES had borrowed MANAFORT's credit card to make the purchases at issue and would pay
him back by a date certain.
Statutory Allegations
COUNTS ONE THROUGH FTVR

(Subscribing to False United States Individual Income

Tax Returns For 2010-2014 Tax Years)
45.

Paragraphs 1 through 44 are incorporated here.

46.

On or about the dates specified below, in the Eastern District of Virginia and elsewhere,

defendant PAUL J. MANAFORT, JR., willfully and knowingly did make and subscribe, and aid

and abet and cause to be made and subscribed. United States Individual Income Tax Returns,
Forms 1040 and Schedule B, for the tax years set forth below, which returns contained and were

verified bythe written declaration ofMANAFORT that they were made under penalties ofpeijury,
and which returns MANAFORT didnotbelieve to betrue and correct as to every material matter,

inthat the returns (a) claimed that MANAFORT did not have a fmancial interest in and signature
and other authority over a financial account in a foreign country and (b) failed to report income,
whereas MANAFORT then and there well knew and believed that he had a financial interest in,
and signature and other authority over, bank accounts in a foreign country and had earned total
income in excess of the reported amounts noted below:

COUNT

TAX

APPROX. FILING

FOREIGN ACCOUNT

TOTAL INCOME

YEAR

DATE

REPORTED

REPORTED

(Sch. B, Line 7a)

(Line 22)
$504,744
$3,071,409
$5,361,007
$1,910,928
$2,984,210

1

2010

2

2011

3

2012

4

2013

5

2014

October 14,2011
October 15, 2012
October 7,2013
October 6,2014
October 14,2015

None

None
None

None
None

(26 U.S.C. ASS 7206(1); 18 U.S.C. ASSASS 2 and 3551 etsea.^
27

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COUNTS SIX THROUGH TEN

(Assisting in the Preparation of
False United States Individual Income

Tax Returns For 2010-2014 Tax Years)
47.

Paragraphs 1 through 44 are incorporated here.

48.

On or about the dates specified below, in the Eastern District of Virginia and elsewhere,

defendant RICHARD W. GATES III willfully and knowingly did aid and assist in, and procure,
counsel, and advise the preparation and presentation to the Internal Revenue Service, of a United

States Individual Income Tax Return, Form 1040 and Schedule B, of PAUL J. MANAFORT, JR.,
for the tax years set forth below, which returns were false and fraudulent as to a material matter,

inthat the returns (a) claimed that MANAFORT did not have a financial interest in, and signature
and other authority over, a financial account in a foreign country and (b) failed to report income,
whereas GATES then and there well knew and believed that MANAFORT had a financial interest

in, andsignature andother authority over, bank accounts in a foreign country andhadearned total
income in excess of the reported amounts noted below:
COUNT

TAX

APPROX. FILING

YEAR

DATE

6

2010

7

2011

8

2012

9

2013

10

2014

FOREIGN ACCOUNT
REPORTED

TOTAL INCOME
REPORTED

(Sch. B, Line 7a)

(Line 22)
$504,744
$3,071,409
$5,361,007
$1,910,928
$2,984,210

October 14, 2011
October 15, 2012
October 7, 2013
October 6, 2014
October 14, 2015

None
None
None
None
None

(26 U.S.C. ASS 7206(2); 18 U.S.C. ASS 3551 etsea.)
COUNTS ELEVEN THROUGH FOURTEEN

(Failure To File Reports Of Foreign Bank And Financial
Accounts For Calendar Years 2011-2014)
49.

Paragraphs 1 through 44 are incorporated here.

50.

On the filing due dates listed below, in the Eastern District of Virginia and elsewhere,
28

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defendant PAUL J. MANAFORT, JR., unlawfully, willfully, and knowingly did fail to file with

the Treasury an FBAR disclosing that he had a financial interest in, and signature and other
authority over, a bank, securities, and other financial account in a foreign country, which had an
aggregate value of more than $10,000 in a 12-month period, during the years listed below:
COUNT

YEAR

11

2011

12

2012

13

2013

14

2014

DUE DATE TO FILE FBi^
June
June
June
June

29,2012
30,2013
30,2014
30, 2015

(31 U.S.C. ASSASS 5314 and 5322(a); 18 U.S.C. ASSASS 2 and 3551 etseo.^
COUNTS FIFTEEN THROUGH NINETEEN

(Subscribing to False United States Individual Income

Tax Returns For 2010-2014 Tax Years)
51.

Paragraphs 1 through 44 are incorporated here.

52.

On or about the dates specified below, in the Eastern District of Virginia and elsewhere,

defendant RICHARD W. GATES III willfully and knowingly did makeand subscribe, and aidand

abet and cause to be made and subscribed, United States Individual Income Tax Returns, Forms
1040 and Schedule B, for the tax years set forth below, which returns contained and were verified

by the written declaration of defendant GATES that they were made under penalties of perjury,
and which returns defendant GATES did not believe to be true and correct as to every material
matter, inthatthereturns (a)claimed thatGATES did nothave a financial interest in,and signature
and other authority over, a financial account in a foreign country and (b) failed to report income,
whereas GATES then and there well knew and believed that he had a financial interest in, and
signature and other authority over, a financial account in a foreign country and had earned total
income in excess of the reported amounts noted below:

29

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COUNT

TAX

APPROX. FILING

FOREIGN ACCOUNT

YEAR

DATE

REPORTED

TOTAL INCOME
REPORTED

(Sch. B, Line 7a)
15

2010

16

2011

17

2012

18

2013

19

2014

July 26, 2011
October 11,2012
October 15, 2013
October 15, 2014
October 14,2015

None
None
None
None
None

(Line 22)
$194,257
$250,307
$365,646
$307,363
$292,892

(26 U.S.C. ASS 7206(1); 18 U.S.C, ASSASS 2 and 3551 et sea.)
COUNT TWENTY

(Subscribing to a False Amended United States Individual Income
Tax Retum For 2013 Tax Year)

53.

Paragraphs 1 through 44 are incorporated here.

54.

On or about October 25,2017, in the Eastern District of Virginia and elsewhere, defendant

RICHARD W. GATES III willfully and knowingly did make and subscribe, and aid and abet and

cause another to make andsubscribe, a United States Individual Income Tax Retum, Form 1040X,
for the 2013 tax year, which retum contained and was verified by the written declaration of
defendant GATES that it was madeunderpenalties of perjury, and whichretum defendant GATES

did not believe to be tme and correct as to every material matter, inthat the retum failed to report
income, whereas GATES then and there well knew and believed that hehad eamed adjusted gross
income in excess of the reported amount on Line IC, to wit: $292,055.
(26 U.S.C. ASS 7206(1); 18 U.S.C. ASSASS 2 and 3551 etseq.)
COUNTS TWENTY-ONE THROUGH TWENTY-THREE

(Failure To File Reports Of Foreign Bank And Financial
Accounts For Calendar Years 2011-2013)
55.

Paragraphs 1 through 44 are incorporated here.

56.

On the filing due dates listed below, in the Eastem District of Virginia and elsewhere,

defendant RICHARD W. GATES III unlawfully, willfully, and knowingly did fail to file with the
30

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Treasury an FBAR disclosing that he had a financial interest in, and signature authority over, a
bank, securities, and other financial account in a foreign country, which had an aggregate value of
more than $10,000 in a 12-month period, during the years listedbelow:

COUNT

YEAR

DUE DATE TO FILE FBAR

21

2011

June 29, 2012

22

2012

June 30,2013

23

2013

June 30, 2014

(31 U.S.C. ASSASS 5314 and 5322(a); 18 U.S.C. ASSASS 2 and 3551 et sea.^
COUNT TWENTY-FOUR

(Bank Fraud Conspiracy / Lender B / $3.4million loan)
57.

Paragraphs 1 through 44 are incorporated here.

58.

On or about and between December 2015 and March 2016, both dates being approximate

and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J.

MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally conspire to
execute a scheme and artifice to defraud one or more financial institutions, to wit: Lender B, the

deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain
moneys, funds, and credits owned by and under the custody and control ofsuch financial institution

by means of materially false and fraudulent pretenses, representations, and promises, contrary to
Title 18, United States Code, Section 1344.

(18 U.S.C. ASSASS 1349 and 3551 et sea.^
COUNT TWENTY-FIVE

(Bank Fraud / Lender B / $3.4 million loan)
59.

Paragraphs 1 through 44 are incorporated here.

60.

On or about and between December 2015 and March 2016, both dates being approximate
31

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and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J.

MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally execute and
attempt to execute a scheme and artifice to defraud one or more financial institutions, to wit:

Lender B, the deposits ofwhich were insured by the Federal Deposit Insurance Corporation, and
toobtain moneys, funds, and credits owned by and under the custody and control ofsuch financial

institution by means ofmaterially false and fraudulent pretenses, representations, and promises.
(18 U.S.C. ASSASS 1344,2, and 3551 et sea.)
COUNT TWENTY-SIX

(Bank Fraud Conspiracy / Lender C / $1 million loan)
61.

Paragraphs 1 through 44 are incorporated here.

62.

On or about and between March 2016 and May 2016, both dates being approximate and

inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT,
JR., and RICHARD W. GATES IIIdidknowingly and intentionally conspire to execute a scheme

and artifice to defi-aud one or more financial institutions, to wit: Lender C, the deposits ofwhich
were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and
credits owned by and under the custody and control of such financial institution by means of
materially false and fi-audulent pretenses, representations, and promises, contrary to Title 18,
United States Code, Section 1344.

(18 U.S.C. ASSASS 1349 and 3551 etseq.)
COUNT TWENTY-SEVEN

(Bank Fraud/ LenderC / $1 million loan)
63.

Paragraphs 1 through 44 are incorporated here.

64.

On or about and between December 2015 and March 2016, both dates being approximate

and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J.
32

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MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally execute and
attempt to execute a scheme and artifice to defraud one or more financial institutions, to witi

Lender C, the deposits ofwhich were insured by the Federal Deposit Insurance Corporation, and
to obtain moneys, funds, and credits owned byand under the custody and control ofsuch financial

institution by means ofmaterially false and fraudulent pretenses, representations, and promises.
(18 U.S.C. ASSASS 1344,2, and 3551 etsea.^
COUNT TWENTY-EIGHT

(Bank Fraud Conspiracy / Lender B / $5.5 million loan)
65.

Paragraphs 1 through44 are incorporated here.

66.

On orabout and between March 2016 and August 2016, both dates being approximate and

inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT,
JR., and RICHARD W. GATES IIIdidknowingly and intentionally conspire to execute a scheme

and artifice to defiraud one or more financial institutions, to wit: Lender B, the deposits of which
were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and

credits owned by and under the custody and control of such financial institution by means of
materially false and fraudulent pretenses, representations, and promises, contrary to Title 18,
United States Code, Section 1344.

(18 U.S.C. ASSASS 1349 and 3551 etseq.^
COUNT TWENTY-NINE

(Bank Fraud Conspiracy / Lender D / $9.5 million loan)
67.

Paragraphs 1 through 44 are incorporated here.

68.

On or about and between April 2016 and November 2016, both dates being approximate

and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J.

MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally conspire to
33

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execute a scheme and artifice to dejfraud one or more financial institutions, to wit: Lender D, the
deposits of which were insured by the Federal Deposit Insurance Corporation, and to obtain
moneys, funds, and credits owned byand under thecustody and control ofsuch financial institution

by means ofmaterially false and fi-audulent pretenses, representations, and promises, contrary to
Title 18, United States Code, Section 1344.

(18 U.S.C. ASSASS 1349 and 3551 et seq.")
COUNT THIRTY

(Bank Fraud / Lender D / $9.5 million loan)
69.

Paragraphs 1 through 44 are incorporated here.

70.

On or about and between April 2016 and November 2016, both dates being approximate

and inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J,

MANAFORT, JR., and RICHARD W. GATES III did knowingly and intentionally execute and
attempt to execute a scheme and artifice to defraud one or more financial institutions, to wit:

Lender D, the deposits of which were insured by the Federal Deposit Insurance Corporation, and
to obtain moneys, funds, andcredits owned byand under thecustody and control of such financial

institution by means ofmaterially false and firaudulent pretenses, representations, and promises.
(18 U.S.C. ASS 1344, 2, and 3551 et sea.^
COUNT THIRTY-ONE

(Bank Fraud Conspiracy / Lender D / $6.5 million loan)
71.

Paragraphs 1 through 44 are incorporated here.

72.

On or about and between April 2016 and January 2017, both dates being approximate and

inclusive, in the Eastern District of Virginia and elsewhere, defendants PAUL J. MANAFORT,
JR., and RICHARD W. GATES IIIdidknowingly and intentionally conspire to execute a scheme

and artifice to defraud one or more financial institutions, to wit: Lender D, the deposits of which
34

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were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds, and
credits owned by and under the custody and control of such financial institution by means of
materially false and fraudulent pretenses, representations, and promises, contrary to Title 18,
United States Code, Section 1344.

(18 U.S.C. ASSASS 1349 and 3551 et seq.)
COUNT THIRTY-TWO

(Bank Fraud / Lender D / $6.5 million loan)
73.

Paragraphs 1 through 44 are incorporated here.

74.

On or about and between April 2016 and January 2017, both dates being approximate and

inclusive, in the Eastern District ofVirginia and elsewhere, defendants PAUL J. MANAFORT,
JR., and RICHARD W. GATES III did knowingly and intentionally execute and attempt to execute

ascheme and artifice to defraud one or more financial institutions, to wit: Lender D, the deposits
ofwhich were insured by the Federal Deposit Insurance Corporation, and to obtain moneys, funds,
and credits owned by and under the custody and control ofsuch financial institution by means of
materially false and fraudulent pretenses, representations, and promises.
(18 U.S.C. ASSASS 1344,2, and3551 et seq.'^
FORFEITURE NOTICF

75.

Pursuant to Fed. R. Crim. P. 32.2, notice is hereby given to the defendants that the United

States will seek forfeiture as part ofany sentence in accordance with Title 18, United States Code,

Section 982(a)(2), in the event ofthe defendants' convictions under Counts Twenty-Four through
Thirty-Two ofthis Superseding Indictment. Upon conviction ofthe offenses charged in Counts
Twenty-Four through Thirty-Two, defendants PAUL J. MANAFORT, JR., and RICHARD W.

GATES III shall forfeit to the United States any property constituting, or derived from, proceeds
35

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obtained, directly or indirectly, as aresult ofsuch violation(s). Notice is further given that, upon
conviction, the United States intends to seek ajudgment against each defendant for asum ofmoney
representing the property described in this paragraph, as applicable to each defendant (to be offset
by the forfeiture ofany specific property).

76. The grand jury finds probable cause to believe that the property subject to forfeiture by
PAUL J. MANAFORT, JR., includes, but is not limited to, the following listed assets.*

a. All funds held in account number XXXXXX0969 at Lender D, and any property
traceable thereto.
Substitute Assets

77.

Ifany ofthe property described above as being subject to forfeiture, as aresult ofany act or

omission of any defendant

a.

cannot be located upon the exercise of due diligence;

b.

has been transferred or sold to, or deposited with, athird party;

c.

has been placed beyond thejurisdiction of thecourt;

d.

has beensubstantially diminished in value; or

e.

has been commingled with other property thatcannot besubdivided without
difficulty;

itis the intent ofthe United States ofAmerica, pursuant to Title 18, United States Code, Section
982(b) and Title 28, United States Code, Section 2461(c), incorporating Title 21, United States
Code, Section 853, to seek forfeiture of any other property of said defendant.
(18U.S.C. ASS982)

36

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Robert S. Mufeller, ffl
Special Counsel
Department ofJustice
A TRUE BILL:
eE-G(

hispat

illicCWsOfficc:
Foreperson

Date: February 22,2018

37