Manafort pleads not guilty to New York mortgage fraud charges

Former Trump campaign chairman Paul Manafort, already serving seven-and-one-half years in federal prison, pleaded not guilty in a New York mortgage fraud case — state charges that are beyond the reach of a presidential pardon.

After being led into the courthouse in handcuffs and a blue prison jumpsuit, Manafort appeared for the first time in a Manhattan courtroom to face an indictment brought in March by Manhattan District Attorney Cyrus Vance Jr. Surrounded by courtroom guards, Manafort had none of his trademark swagger. His hair was unkempt, he walked with a limp, and he was noticeably heavier than he was at his federal trial a year ago.

Manafort is accused of making false statements on mortgage applications to banks about a property on Howard Street in Manhattan’s SoHo neighborhood, and understating his debts by falsely claiming that a $200,000 purchase of New York Yankees tickets was made by an associate. But the charges also send a message to President Donald Trump that his power to protect his allies through pardons is limited.

Paul Manafort

Bloomberg News

“Not guilty,’ Manafort told State Supreme Court Justice Maxwell Wiley.

Manafort got the longest prison sentence of any defendant in Special Counsel Robert Mueller’s Russia investigation of Russian meddling. The president has criticized Manafort’s treatment and publicly weighed a pardon for his former campaign chairman. Trump has already pardoned other political allies.

The state case faces its own challenges. Some of the charges touch on conduct for which Manafort was already tried and convicted in federal court. New York has a strong law protecting defendants from being prosecuted twice for the same crime, and Manafort’s defense lawyers will seek to have the state case dismissed on those grounds.

“We will soon move to dismiss the indictment based upon New York double jeopardy,” Manafort’s lawyer, Todd Blanche, told reporters outside court after the hearing. “In our view the law of New York does not allow the people to do what they did in this case.”

Manafort remains in federal custody while facing the state charges, housed at the Metropolitan Correctional Center in lower Manhattan, with U.S. authorities expressing concern he could suffer in the harsh New York jail system given his age and health. He suffers from gout and other maladies.

His custody arrangements during the state proceeding have already been the subject of a battle between Vance, the Justice Department and Manafort’s lawyers. Manafort may have been headed to the notorious Rikers Island jail complex while his case is pending, specifically to an isolated unit often used as protective custody for high-profile detainees, according to a report in the New York Times.

The Justice Department intervened, assigning him to a high-security federal lockup in lower Manhattan instead. While he will remain in federal custody during the duration of the state case, it isn’t clear whether he will remain there or return to the low-security prison in Pennsylvania where he has been serving his federal sentence.

The New York investigation began in March 2017, well after Manafort had left Trump’s campaign amid questions about his work on behalf of pro-Russian leaders in Ukraine, but before he was indicted by Mueller.

Manafort was prosecuted in two related cases by Mueller’s team. One involved a secret-influence campaign in the U.S. on behalf of the then-Ukrainian government; the other was for bank and tax fraud over his efforts to hide tens of millions of dollars in income in offshore bank accounts. He used the funds to finance an opulent lifestyle that included custom suits and a $15,000 ostrich jacket.

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