Prosecutors Challenge Judge’s Ideas About Banker’s Awareness of Alleged Manafort Fraud
Just because a bank CEO was aware that Paul Manafort was committing bank fraud doesn’t make Manafort’s conduct any less fraudulent, special counsel Robert Mueller’s prosecutors argued in a court filing Monday morning.
The filing appeared to be prompted by a bench discussion the attorneys had with the defense and Judge T.S. Ellis on Friday, pertaining to Steve Calk, the CEO of The Federal Savings Bank (TFSB) who served as a Trump campaign advisor.
Federal Savings Bank was one of a number of lenders that prosecutors say were misled by false representations made by Manafort in applying for millions of dollars in loans in late 2015 and 2016. Manafort was approved for a Federal Savings Bank loan the day after Calk expressed to the Trump campaign chair interest in working for Trump, a bank employee testified last week. The prosecution presented other evidence that Calk was promised campaign and administration positions while negotiating Manafort’s loans.
During Friday’s bench conversation about whether statements by Calk could be admitted, Ellis “expressed concern about the notion that TFSB could be defrauded when Calk, who ultimately approved these loans for TFSB, was going to approve the loans for personal reasons,” according to Monday’s filing.
“The Court questioned whether Manafort’s fraudulent representations could be material if the bank’s chairman and CEO, and a significant shareholder of the bank’s holding company, intended to grant Manafort the loans regardless,” the filing said. “Picking up on the Court’s comments, the defense suggested that Manafort could not have defrauded the bank if Calk knew Manafort’s representations were false. …The Court agreed that it did not ‘see the materiality.'”
In the filing, prosecutors went on to argue that the fact that “Calk apparently intended to approve the loans for personal reasons has no bearing on the materiality of Manafort’s misrepresentations.”
The prosecutors are asking that Ellis “recognize the lack of merit in any defense argument that Stephen Calk’s complicity in or awareness of Manafort’s fraud on TFSB renders immaterial as a matter of law Manafort’s false and fraudulent representations to TFSB for purposes of obtaining loans.”
Read the full filing below: