New York Has Prepared Paul Manafort Charges If Trump Pardons Him

(Bloomberg) -- New York state prosecutors have put together a criminal case against Paul Manafort that they could file quickly if the former chairman of Donald Trump's 2016 campaign receives a presidential pardon.

New York County District Attorney Cyrus Vance Jr. is ready to file an array of tax and other charges against Manafort, according to two people familiar with the matter, something seen as an insurance policy should the president exercise his power to free the former aide. Skirting laws that protect defendants from being charged twice for the same offense has been one of Vance's challenges.

Manafort was convicted of eight felonies, pleaded guilty to two more and is scheduled to be sentenced next month for those federal crimes. Prosecutors working for Special Counsel Robert Mueller have recommended as long as 24 years, a virtual life sentence, for the 69-year-old political consultant.

The president, who has bemoaned Manafort's treatment at the hands of Mueller, said in November that he has not ruled out a pardon. He has frequently talked of his broad pardon power, possibly extending even to himself, and acted to liberate two political allies previously.

A spokesman for Vance's office declined to comment, as did Jason Maloni, a spokesman for Manafort. The White House didn't respond to a request to comment.

Prosecutors in Vance's office began investigating Manafort in 2017, months before Mueller charged him with conspiracy, failure to file reports of foreign bank accounts and failure to register as an agent of a foreign country, activities stemming from his earlier work for Ukraine. Mueller's team followed up with more charges of bank fraud, filing false tax returns and failure to file reports of foreign bank accounts in early 2018.

From November 2017: Manafort Bankers, Associates Summoned to Talk to Manhattan D.A.

At the state level, Vance is preparing an array of criminal charges. While their full extent isn't clear, they would include evasion of New York taxes and violations of state laws requiring companies to keep accurate books and records, according to one of the people, who asked not to be identified because the investigation is confidential.

Much of the evidence against Manafort has emerged through Mueller's prosecutions. But Vance's office can't cut and paste Mueller's charges into a state indictment. It must avoid New York's double jeopardy law, which provides protections for defendants even stronger than those guaranteed by the U.S. Constitution's Fifth Amendment.

Former New York Attorney General Eric Schneiderman anticipated this concern last year when he urged Albany lawmakers to tweak the state's robust double jeopardy protections to allow local prosecutors to charge individuals convicted of federal crimes but pardoned by the president. The state legislature didn't follow through on his request.

Nevertheless, Vance's office has identified several areas where it believes Manafort can be charged with state offenses without triggering double jeopardy protections.

For example, New York law allows defendants who have already been convicted of evading federal taxes to be charged with the same conduct as it applies to state taxes. As a part-time resident of New York, Manafort has some exposure.

Mueller's court filings also contain evidence of Manafort's manipulation of his business records as part of efforts to secure bank loans. While Mueller charged bank fraud based on this conduct, Vance could hit Manafort with state charges of falsifying books and records, according to one of the people.

Manafort's legal team would almost certainly challenge the state's efforts, invoking constitutional protections. New York's double jeopardy provisions have frustrated state authorities in the past, said John Moscow, who prosecuted global bank fraud and money laundering cases under Vance's predecessor Robert Morgenthau.

“My suggestion is to change the double jeopardy statute in New York to permit prosecutions with this kind of conduct in mind,” said Moscow, who is now at Lewis Baach LLC and isn't involved in the matter. “As interpreted, the statute is too broad and needs to be rethought.”

If convicted of state crimes, Manafort would face confinement in notoriously tough prisons. L. Dennis Kozlowski, the former Tyco International Ltd. chief executive officer convicted in 2005 of securities fraud, grand larceny and falsifying business records, served part of his 8 1/3-to-25 year sentence at a medium-security prison.

Along with commuting some sentences, Trump has issued seven pardons, several of them to staunch political allies including Sheriff Joe Arpaio of Arizona and conservative commentator Dinesh D'Souza. At times he has seemed to relish his clemency power, musing about a possible pardon for Martha Stewart and commuting the sentence of former Illinois Governor Rod Blagojevich.

Matthew Whitaker, who was acting attorney general until last week, told lawmakers on February 8 that he hadn't had discussions about potential pardons. But asked by U.S. Representative Veronica Escobar, a Texas Democrat, what he knew of any pardon documents that had been prepared, Whitaker responded: “I am aware of documents relating to pardons of individuals, yes.”

Escobar's time then expired, and no follow-up question was asked.

--With assistance from Alyza Sebenius.

To contact the reporter on this story: Greg Farrell in New York at gregfarrell@bloomberg.net

To contact the editors responsible for this story: Winnie O'Kelley at wokelley@bloomberg.net;Jeffrey D Grocott at jgrocott2@bloomberg.net

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