A former top executive at Federal Savings Bank told a federal court on Friday that its chief executive was uncharacteristically involved in the processing and approval of two loans extended to Paul Manafort, and made it clear during the loan process that he wanted a high-level position in the Trump administration.
Dennis Raico, the former senior vice president at the bank, testified that Manafort received two loans totaling $16 million from Federal Savings Bank. He said its CEO, Stephen Calk, was involved in negotiations for both loans.
Raico was one of five witnesses to receive immunity from the government in exchange for his testimony.
The first loan Manafort obtained from Federal Savings Bank, for $9.5 million, was related to a property Manafort owned in Bridgehampton, New York, and finalized days after the 2016 presidential election. The second, for $6.5 million, was related to his property on Union Street in Brooklyn and finalized just before President Trump was inaugurated.
Raico told the court he began working on the loans with Manafort and his then-son-in-law Jeffrey Yohai in April 2016. He alerted Calk to Manafort’s involvement because Raico knew he was interested in politics.
Calk told Raico he “wanted to meet” Manafort.
Raico said he, Manafort, Calk, and several others met at The Capital Grille in New York in May 2016, when Manafort was serving as Trump’s campaign chairman, and discussed politics and the loans. Raico said he believes Calk and Manafort talked privately and sat close by each other.
Calk knew Manafort was involved with the Trump campaign, Raico testified. And on July 27, 2016, Manafort, Calk, and Raico talked again to discuss Manafort’s financial information.
At the end of the discussion, Calk “indicated that he would be interested in serving the Trump Organization,” Raico said.
One of the loans was submitted for approval the day of the meeting and approved the following day.
On Aug. 3, 2016, Manafort sent an email to Raico with the subject line “Need Steve Calk resume,” according to documents presented by prosecutors Friday.
Raico told the jury he was “uncomfortable” at times during the process and was sometimes asked to pass on messages between Calk and Manafort. Raico also said Calk and Manafort would sometimes meet separately without any other bank personnel.
In one instance, on Nov. 11, 2016, Calk told Raico in a phone call he hadn’t spoken with Manafort in a few days and wanted Raico to call Manafort because he thought he would be up for secretary of the Treasury or another job with the new administration.
“It made me very uncomfortable,” Raico said of the discussion.
He did not pass along Calk’s request.
Raico was also worried about some of Manafort’s financial information during the loan process, and told the court some “discrepancies” arose, including differences between what was reported on Manafort’s tax returns and financial statements for his firm, Davis Manafort Partners International.
“A plus B didn’t equal C all the time,” Raico said.
Among the issues raised by the bank was a balance of more than $200,000 on Manafort’s American Express card related to the purchase of New York Yankees season tickets.
Manafort told Federal Savings Bank he lent the card to a friend — his former business associate Rick Gates — who ran up the balance but would repay it.
Raico said the loan process involving Manafort differed from others he was involved in at Federal Savings Bank, but not only because of Calk’s involvement.
Manafort, he said, sought the change the structure of the $9.5 million loan on the day it was being finalized, which required the bank to restart the underwriting process.
After making his recommendation, Manafort emailed Raico a document that detailed his framework for the new deal, a move that was inconsistent with the bank’s policies, Raico said.
“I hadn’t seen a loan restructured at the closing table before, and I hadn’t seen Steve Calk approve restructuring of a loan,” Raico said.
He also said Manafort emailed Calk about a “major issue”—the revelation there was a $3.5 million loan outstanding on Manafort’s Bridgehampton property. The full amount of the mortgage was not initially disclosed to Federal Savings Bank.
“I look to your cleverness in how to manage the underwriting,” Manafort wrote in his email to Calk.
Federal Savings Bank’s President Javier Ubarri told Raico and others not to proceed with the $9.5 million loan. However, Raico said Calk called him and informed him it was approved.
Manafort obtained the first $9.5 million loan on Nov. 16, 2016.
The second loan, $6.5 million for the Union Street property, was finalized Jan. 4, 2017.
The testimony was part of the second week in which a federal court in Alexandria, Va., was hearing testimony in a case related to charges that Manafort broke the law in a bid to secure loans and hide income from the IRS.
The 12-member jury also heard from the senior director of ticket operations for the New York Yankees, Irfan Kirimca.
Kirimca said Manafort was a season ticket holder from at least 2010 to 2017.
Refencing the tickets Manafort said Gates purchased, Kirimca said he was never told that Gates would be paying for Manafort’s season tickets.
Kirimca also said that season tickets were never shipped to Gates, who also was not listed in the Yankees system as a season ticket holder and did not have any ticket accounts.
Manafort also told the team’s ticket operations staff in November 2011 they would be received a $226,800 payment for his 2012 season tickets from Global Highway Limited, an entity located in Cyprus that prosecutors say Manafort controlled.
The government says Manafort hid millions of dollars in income he made from political consulting work in Ukraine in offshore bank accounts, some located in Cyprus, and underreported his income to the Internal Revenue Service.
Prosecutors initially expected to rest their case against Manafort on Friday, but bench conferences between lawyers for both parties and several lengthy recesses delayed the timeline.
Mueller’s team expects to call at least one more witness Monday and will rest their case then.
Friday’s testimony concluded the second week of Manafort’s trial, during which the 12-member jury heard from Gates and several representatives from other banks that extended Manafort loans.
The representatives from Citizens Bank in New York City and Banc of California indicated that had Manafort accurately represented his income on loan applications, his loans would likely not have been approved.
The trial will reconvene Monday at 1 p.m.
