The Manafort trial: Guilty on 8 counts

Jurors were presented with what appeared to be a falsified invoice from one of the home improvement companies that did business with Paul Manafort. 

Joel Maxwell, chief operative officer of Big Picture Solutions, testified that Manafort paid his company more than $2.2 million over several years for various home technology improvements, including installation of wireless networks and audio/visual systems. 

Most of the payments came from Manafort's offshore accounts, Maxwell said. 

After prosecutors detailed the invoices, they showed Maxwell another document that purported to be an $163,000 invoice from his company to one of Manafort's overseas companies.

But there were problems with the document: For one, the document misidentified the name of the company as an LLC, and parts of the address were incorrect. "We're not an LLC," Maxwell said, and the documents are "not detailed like ours would be." 

The mystery document originated from St. Vincent and the Grenadines, a Caribbean island chain where Manafort kept some of his offshore accounts. Prosecutors haven't yet explained why they spent two days presenting these documents and highlighting apparent inconsistencies.

But they could have been used by Manafort to hide or falsify financial documents. 

There was a brief moment of levity in the courtroom when Judge T.S. Ellis noticed that his binder, containing exhibits and documents, was swapped with one of the prosecutors' binders. 

In response, prosecutor Greg Andres joked that Ellis now had a sneak peek at their strategy.

"It was pretty clear," Ellis replied. " I didn't need to have it." 

The binders were quickly switched back.

Manafort's lawyers got a chance to look at the page that Ellis saw from Andres' binder, which had some red markings and handwritten notes on the page. 

Day 3 of Paul Manafort's trial is poised to feature more talk of his lavish lifestyle, while Special counsel Robert Mueller's team also plans to dive into the nuts and bolts of its case against the former Trump campaign chairman.

Manafort is charged with 18 counts of tax and banking violations, and the special counsel is preparing to call Manafort's bookkeepers and accounts to the witness stand on Thursday. And while Manafort's case isn't about the 2016 campaign, he's the first defendant Mueller's team has taken to trial.

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Prosecutors plan to call Paul Manafort's former deputy Rick Gates to testify, prosecutor Greg Andres said Thursday morning in court without the jury in the room.

This comes a day after prosecutors opened the door to the possibility that Gates might not testify.

Why this matters: Gates is perceived by the defense and court-watchers as the star witness for the prosecution, after he agreed to cooperate in February. 

Andres added that prosecutors could prove Manafort's guilt whether or not Gates testifies.

Gates is expected to take the stand as early as Friday or Monday.

Judge T.S. Ellis used a discussion of whether Manafort's team could discuss the lack of an IRS audit before Paul Manafort was charged with a crime to bring up the elephant in the room at any criminal trial -- whether Manafort himself will testify.

Ellis said Thursday morning he did not yet know if Manafort would testify in his own defense, and didn't want to force a decision from the defense team until they begin their side of the case, after the prosecution's case rests, likely next week.

"He will not be penalized for the right to remain silent," Ellis said. 

However, Ellis added that if Manafort does testify, the judge may allow testimony about whether Manafort tried to comply with IRS policy and offered to be audited before he was charged. 

The Justice Department released photos as part of the evidence entered at Paul Manafort's trial on Wednesday.

Manafort spent over $900,000 with the custom men's clothing store Alan Couture, one witness who ran the store told prosecutors. In total, the six vendors on the witness stand Wednesday described more than $6 million in payments Manafort sent to them for luxury items and services.

Manafort appears to have purchased not just an $15,000 ostrich jacket, but also a $9,500 ostrich vest. And the cost of that Python jacket? $18,500, according to invoices from Alan Couture entered into the case's evidence collection.

Here's one of them:

We don't know which of the Manafort jacket photos released by DOJ is the $15,000 jacket "made from an ostrich," as the prosecution team says the reference in the opening statement came from the invoices, not the evidence photographed in Manafort’s home. 

All we know is that the ostrich jacket is one of the Alan Couture clothing items.

The purchases appear to have hit a note with the wider public. After prosecutors first spoke about a $15,000 jacket "made from an ostrich" in the trial's first minutes, the anti-animal cruelty group PETA published a letter Wednesday to Manafort's lawyer.

The group asked Manafort to donate the ostrich jacket to them so they can teach children it was "cruelly obtained." Manafort could receive a tax deduction, PETA added.

Take a look at some photos of Manafort's various jackets and suits below.

Mueller team’s is now formally arguing to Judge T.S. Ellis that they should be able to show proof to the jury of Manafort’s lavish lifestyle, including photos of his high-end custom jacket, his real estate expenditures, and other extravagant purchases. 

Ellis has so far stopped the prosecutors from showing photos of Manafort’s luxury purchases to the jury. The defense has wanted them kept out of the trial too. Ellis has reminded the lawyers and Northern Virginia jurors multiple times that it’s not a crime for a person to be rich. 

But Mueller’s team says evidence of what Manafort spent his Ukrainian lobbying proceeds on IS evidence of the crime itself, and shows how he personally benefited from allegedly defrauding the government. 

“That Manafort had an expensive lifestyle that required lots of money to maintain is important proof as to why he would commit the bank frauds” after his lobbying work declined in 2014, prosecutors wrote.

Prosecutors in the trial of former Trump campaign chairman Paul Manafort argued overnight Thursday that the defense's assertion that Manafort was never audited by the Internal Revenue Service shouldn't factor into the jury's determination of whether he committed a crime.

Generally, both prosecutors and defense during a trial can attempt to curtail the opposite sides' arguments by asking the judge to decide whether he will allow certain types of evidence to be presented to the jury.

In his opening statement Tuesday, defense lawyer Tom Zehnle told the jury they should expect to hear how Manafort never faced a federal inquiry about his taxes, making it suspicious that prosecutors brought this case. 

Special counsel Robert Mueller's team, however, said in a court filing after midnight Thursday morning that the point about whether Manafort shouldn't matter. An IRS audit is a civil procedure and not part of the criminal inquiry, prosecutors say.

Manafort is currently fighting in court charges of 18 financial crimes, including submitting false income tax returns to the IRS.

Manafort's "argument that a civil audit should have been conducted and the fact that one was not creates a substantial risk of misleading the jury, prejudicing the government, and inviting jury nullification," prosecutor Van Grack wrote, referring to the outcome in which jurors believe a defendant committed crimes but vote not to convict because they believe the person was not fairly prosecuted. 

In his opening statement to the jury, Zehnle criticized what he said was the government's "rush to judgment" in the case.

"You're going to learn that Mr. Manafort was never audited by the IRS, nor were any of his companies. So as you consider this, as you hear all the evidence come in, the documents and the testimony, you might ask yourself whether the government knew enough to initiate the audit. Did they have enough evidence?" Zehnle said.

It's likely on Thursday that Judge T.S. Ellis will address this issue during the trial proceedings without the jury in the room.

Ellis has already decided one other argument from Manafort's team out of trial. The defense lawyers are not allowed to suggest to the jury that an earlier federal investigation that started before the special counsel's office formed ended with a decision not to prosecute Manafort. 

The second day of testimony in the Paul Manafort trial has just wrapped up. Here's everything you need to know: