Revisiting Paul Manafort’s lost New York

The accused wore an olive-green jailhouse jumpsuit. His collar was rumpled. For the most part, he appeared grim and unsmiling.

That shouldn’t come as a surprise: Paul Manafort’s circumstances had changed from the days he donned hand-tailored $7,500 suits from the Boutique of Bespoke Atelier on West 56th Street off Fifth Avenue.

The scene was the federal courthouse in Virginia on July 23 where the former chairman of Donald Trump’s presidential campaign had been transported from an Alexandria detention center for a pre-trial hearing.

Among other charges, Manafort is alleged to have funneled millions in unreported overseas cash into offshore accounts – and tapped the funds to buy Manhattan property, haberdashery, cigars and other ill-gotten goods. Meanwhile, he lived in high style in Trump Tower.

Now, he’s facing 18 counts of bank fraud, tax fraud, money laundering and failing to report foreign transactions, most of which derived from his work as an unregistered lobbyist for a Ukrainian political party, federal prosecutors say.

Attorneys for Manafort, who has pleaded not guilty, asked U.S. District Court Judge T. S. Ellis III to delay the trial until the fall, after a separate but related money-laundering and witness-tampering trial he faces in September stemming from lobbying on behalf of the pro-Russian party.

Ellis nixed that request. But he pushed the start of the first trial back a week to give defense counsel time to review a trove of newly released government documents relevant to the case. Jury selection for the trial is now set to begin on July 31.

A version of the story that follows was initially published on November 7, 2017. It has been revised and updated to reflect subsequent events.The court proceedings, among other things, are expect to spotlight one great truism: That New Yorkers will go to extraordinary lengths to obtain, maintain – and of course, profit, from – their own sliver of Manhattan real estate.

The tradition dates to the Astors, Stuyvesants, Vanderbilts, Roosevelts, Rhinelanders and Rockefellers, and typically, a lot of corner-cutting has been involved.

But the city’s great land-owning families were lucky: Special Counsel Robert S. Mueller III wasn’t around back then to police their property purchases, flips, mortgages and other transactions.

Manafort, who for decades plied his trade as a Republican lobbyist, wasn’t so fortunate.

Thus, an opaque and suspicious SoHo real estate play figured in his indictment by the U.S. Justice Department’s designated prosecutor on October 30, 2017.

It’s the first major case that Mueller will bring to trial in pursuit of his investigation into Russian efforts to boost Trump’s prospects in the 2016 presidential election, although most of the crimes alleged predate the race by several years.

The original 12-count charging document alleged conspiracy, money laundering, false filings, tax fraud and a scheme to conceal millions in income Manafort raked in as an unregistered Ukrainian government agent. Six counts were subsequently added to the indictment, bringing the tally to 18.

The accusations provide a window into the lifestyle of a super-lobbyist-cum-part-time-Manhattanite, of the 1 percent variety, who plowed millions into trophy properties and hundreds of thousands into high-end creature comforts, like his bespoke suits from the Fifth Avenue boutique.

The only problem: It wasn’t kosher, Mueller alleges. Manafort, he says, deployed offshore accounts to evade taxes and wire vast sums into the U.S., buying everything from housekeeping services to pricey antiques.

“Manafort used his hidden overseas wealth to enjoy a lavish lifestyle in the U.S. without paying taxes on that income,” Mueller wrote. All told, the indictment calculates, he laundered $18 million from abroad.

Of that amount, roughly $4.5 million in offshore funds, 25 percent of the total, was used to purchase luxury goods, services and real property in Manhattan from 2008 to 2014, a Straus News analysis of the charges found.

The cash helped Manafort cut a wide swath across the island, where he periodically worked, played, politicked, patronized an exclusive cigar club, shopped for $7,500 custom-tailored suits and $8,500 silk sport coats – and dined with Russians and Ukrainians.

His expenditures have already resonated in Chelsea. One enterprising family-owned business, Aronson’s Floor Covering, at 135 West 17th St., took note of the indictment, referenced a mega-purchase he made in Alexandria, Virginia, and used it for a bit of savvy street-marketing:

On the sidewalk by its picture windows, the 150-year-old firm placed a large signboard proclaiming, “PAUL MANAFORT spent $934,350 at an antique rug store – & no money with us…”

This portrait of Manafort’s New York was gleaned from the indictments, which doesn’t include his five months running the Trump campaign, the ongoing Congressional probes of a Trump-Russia connection, and legal filings in separate civil cases.

Since 2006, the 69-year-old international political consultant has owned a 43rd floor aerie in Trump Tower, a condo unit 25 stories below Donald Trump’s gilded triplex penthouse. Current value: $6 million, according to Manafort’s initial bail package.

From apartment 43-G, it was just an 18-story elevator ride down to the 25th-floor office of Donald Trump Jr., where on June 9, 2016 the two men and Trump son-in-law Jared Kushner held their now-infamous meeting with several Russians, some with apparent ties to the Kremlin and Russian spy services, who offered to “bring dirt” on Hillary Clinton.

While the encounter didn’t figure in the indictment, both Mueller and Congress have been scrutinizing it for months.

Manafort’s real estate portfolio also went under the special counsel’s microscope, with special attention paid to his two-bedroom, two-bath, 2,150-square-foot, fourth-floor loft condo at 29 Howard St. in SoHo’s cast-iron district.

To purchase it in 2012, he turned to Cyprus, the Mediterranean tax haven and traditional transfer point for Russian funds. The entire $2.85 million cost was wired from offshore Cypriot entities, which he controlled but never reported as taxable income, Mueller alleges.

The plot thickens: Manafort rented the SoHo loft for tens of thousands of dollars on Airbnb, took advantage of favorable rental tax breaks, then applied for a mortgage – falsely telling his bank that condo unit # 4-D was owner-occupied by his daughter and son-in-law, enabling him to tap a larger loan at a cheaper rate than would otherwise have been available, the indictment says.

There’s more. He allegedly compounded the bank fraud by instructing his son-in-law in January 2016 to lie to a bank appraiser who assessed the condo. “Remember, he believes you and [Manafort’s daughter] are living there,” Manafort wrote, according to Mueller’s account.

“He had the benefits of liquid income without paying taxes on it,” the special counsel noted. The feds are seeking forfeiture of the Howard Street home.

“I’ve never seen a property transaction more murky or convoluted in 17 years in the business,” said Michael Rose, a retired independent real estate agent who sold downtown properties.

Just as sketchy was Manafort’s $849,125 purchases of hand-tailored suits and other items between 2008 and 2014 from a men’s clothing store Mueller called “Vendor E.” A chunk of those wares came from the Boutique of Bespoke Atelier, at 3 West 56th St., The Associated Press reported last year.

In what could be a first in the history of haberdashery, Manafort stands accused of using 34 wire transfers, from undisclosed offshore accounts in Cyprus and the Grenadines in the Caribbean, to pull together his wardrobe.

All told, Mueller dryly notes, Manafort wired a $12 million windfall to multiple vendors to buy “personal items,” adding, “He did not pay taxes on this income, which was used to make the purchases.”

The Bespoke Atelier, which once advertised in Trump Magazine, has since closed. Manafort tailor Eugene Venanzi, now operating from a shop in Greenwich, Pitagora & Venanzi, didn’t return calls.

Even a $20,000 payment to his unidentified New York housekeeper, “Vendor S,” was allegedly sourced to Cypriot and Grenadian wire transfers. And Mueller says a local antiques dealer, “Vendor G,” was wired $623,910 from abroad.

Manafort’s original attorney, Kevin Downing, pooh-poohed the transfers, arguing in court papers last year, “It goes without saying that in an international scheme to conceal assets, individuals generally move them offshore, not to the U.S.”

But there was an odd typo in Downing’s filings: Referring to Cyprus, the island, he confused it with cypress, the tree: All the “funds deposited in the Cypress accounts were from legal sources,” he wrote.

invreporter@strausnews.com