Bank official recalls red flags on Manafort loan application

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Mueller's team hinted in a sidebar conference with Ellis and Manafort's lawyers Friday that Calk is facing more scrutiny than the allegations heard so far at Manafort's trial.

The defense attorneys' decision means that the closely watched case is expected to go to the 12-person jury late Wednesday, after prosecutors and Manafort's lawyers make their closing arguments and instructions are issued to the jury.

The trial is the first to emerge from Mueller's investigation into Russian meddling in the presidential election, but neither Manafort nor Gates have been charged in connection with their Trump campaign work. The case stands as the first major test for special counsel Robert Mueller, who is now leading the probe into allegations of Russian interference in the 2016 presidential election - including whether there was any collusion between President Donald Trump campaign associates and the Kremlin.

The bank knew and documented the financial red flags that came with Manafort's loan applications - from hidden debt to shaky professional income. Gates was also forced to admit embezzling a fortune from Manafort and having an extramarital affair.

Prosecutors have spent more than two weeks presenting evidence they say shows how Manafort hid millions of dollars in offshore accounts from the IRS.

U.S. District Judge T.S. Ellis III says the proceedings and the motion will be kept secret until after Manafort's case concludes. The admittedly impatient judge has pushed the government to speed up its case.

Members of the defense team for Paul Manafort, including Thomas Zehnle, left, Brian Ketcham, and Kevin Downing, leave federal court during a break of the trial of former Donald Trump campaign chairman Paul Manafort, in Alexandria, Va., Tuesday, Aug. 14, 2018.

James Brennan, a vice president at Federal Savings Bank, says Manafort failed to disclose mortgages on his loan application.

Brennan, who testified under an immunity deal, said the bank found several problems with the information Manafort provided that should have raised questions about his character and whether he was providing inaccurate information to obtain the loans.

When asked by prosecutors why the loan received a 4 rating, Brennan said it was because of "Mr. Calk", referring to the bank's founder, Stephen Calk.

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Other witnesses have said Calk pushed the loans through because he wanted a plum post in the Trump administration.

"The 3 indivituals (sic) are people who I believe advance DT agenda. They will be totally reliable and responsive to the Trump White House".

Brennan said the Chicago-based bank lost at least $11.8 million because it had to write off the two loans, which he said were the two largest loans the bank had made at that time.

Manafort is facing a potential life sentence if he is convicted on 18 counts of financial charges, including money laundering and tax fraud.

Senior special agent Paula Liss said the Treasury Department had no record of DMP International or Davis Manafort Partners filing such reports between 2011 and 2014.

Manafort made millions of dollars working for pro-Russian Ukrainian politicians before he took an unpaid position with Trump's campaign that lasted five months.

Ellis made this clear during his brief conversation with Manafort.

Also Tuesday, Ellis rejected a defense motion that the case should be dismissed on those same grounds.

The closed hearing came after the judge delayed Manafort's trial for hours last Friday without explanation.

Ellis closed the courtroom at the end of the day to hear arguments on a sealed motion that was filed earlier in the day.

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