Paul Manafort Goes from Frying Pan to Fryer: Understanding Manafort’s Manhattan Arrest and Indictment Alleging Residential Mortgage Fraud and Other Crimes

Some may deem Paul Manafort’s roughly seven and a half year sentence in Federal Court as light, but should the Manhattan District Attorney’s Office prevail in its prosecution of Manafort, the former Trump campaign chairman, lobbyist and jet-setter will likely not be so fortunate the second time around. While there may be Double Jeopardy grounds that the criminal defense team can explore to dismiss the indictment if close enough to the Federal case, if convicted of First Degree Residential Mortgage Fraud or the lesser offense of Attempted First Degree Residential Mortgage Fraud as reflected in New York Penal Law sections 187.25 and 110/187.25 respectively, Manafort’s days (years?) of yearning for the penthouse will be that much longer as he cools his heels in the Big House.  Whether or not he is deemed a “predicate felon” for his Federal conviction, meaning New York views his plea and sentence as a prior felony in this state, Manafort would face up to 25 years in prison and no less than 1 to 3  years for the class B felony of Residential Mortgage Fraud in the First Degree. In the event he is deemed a “predicate felon,” his minimum sentence would be 4.5 to 9 years “upstate.” All of this ignores the lesser, but nonetheless serious crimes of Attempted First Degree Mortgage Fraud, a class C felony, and the class E felonies of First Degree Falsifying Business Records, Fourth Degree Conspiracy and First Degree Scheme to Defraud. If convicted, as a predicate, Manafort’s sentencing judge would be mandated to incarcerate him to no less than 3 to 6 years and 1.5 to 3 years on these two respective felony classes and a corresponding maximum of 15 and 4 years as a temporary leasee of an 8 by 8 SRO with unobstructed views of New York’s finest concrete and iron construction.

Understanding Residential Mortgage Fraud

New York Penal Law 187.00 defines Residential Mortgage Fraud, irrespective of its degree, as well as Residential Mortgage Loan and Residential Real Property. In lieu of boring you too much with uninteresting legal jargon, understand that if Manafort knowingly intended to defraud, presented (or even caused to be presented), or prepared a written statement with the simple belief it would be used to solicit an applicant for, applying for, underwriting or closing a residential mortgage loan, then he would be on his way for violating NY PL 187.25. Additionally, prosecutors must also prove beyond a reasonable doubt that the written statement in question contained materially false information concerning any fact material to the same or the statement purposefully concealed information concerning this material fact. Confused? I apologize (sorta’).  Another way to look at this is  – don’t bullshit on the materials you submit and do so knowingly with the objective of misleading or misrepresenting a particular fact material to the transaction and paperwork. In order to elevate the crime from a misdemeanor or lesser felony, prosecutors must establish that Manafort pocketed north of $1 million. Keep in mind, even if they fail to reach this monetary threshold, if the unjust enrichment is in excess of $50,000, the crime is a class C felony and punishable as reflected above. Similarly, an attempt to commit First Degree Mortgage Fraud, even if you fail, is a class C felony and punishable in the same manner as the lesser Second Degree offense.

Understanding Falsifying Business Records

Far more simple, Manafort is guilty of First Degree Falsifying Business Records, New York Penal Law 175.10, if he knowingly makes a false entry, alters, omits, deletes or causes such an entry to be made in the business records of an enterprise such as a bank or mortgage company. Assuming his intent in doing so was to defraud as required by statute and it was done with an intent to violate any other criminal law or conceal that he was doing so, then Manafort committed this class E felony offense.

Understanding Scheme to Defraud

New York Penal Law 190.65(1)(b) is also a class E felony offense. To run afoul of the First Degree Scheme to Defraud statute, a New York County Grand Jury, and ultimately a trial jury or presiding judge, must find that Manafort engaged in an ongoing scheme that was both systematic and premised on his intent to defraud (notice how many times this term keeps popping up?) at least two people. He must have facilitated this fraud through bogus representations or false pretenses and as a result secured property valued more than $1,000.00 from one of the individuals.

Understanding Conspiracy

Arguably the least sexy in terms of statutes, however alluring and provocative the criminal code can ever be, Manafort is guilty of Fourth Degree Conspiracy pursuant to New York Penal Law 105.10(1) if when he intended to commit the class B or C felonies of Residential Mortgage Fraud in the First Degree or Attempted First Degree Mortgage Fraud, he agreed with at least one other person to engage in or cause the performance of that crime.

Ultimately, the indictment does not set forth enough evidence or information to fully understand Manafort’s alleged conduct. In time District Attorney Vance will share this information and narrative. However, a quick review of the indictment reveals that among other things, Manhattan prosecutors are going to hang their proverbial hats on the intentional misrepresentations Manafort made or facilitated on the business records of a particular lender or lenders and the signing of a Uniform Residential Loan Application or other documents when he allegedly perpetrated his scheme.

Its worth noting, and in fact quite important to recognize, that no matter how angry President Trump tweets at 3:37 am tomorrow, our Covfefe-in-Chief will not be able to pardon his former buddy for violating the New York State Penal Law. Sucks for him.

As more information comes to light, I will update this blog with the factual allegations to better understand the indictment.

Crotty Saland PC is a New York criminal defense firm founded by two former Manhattan prosecutors. The criminal lawyers at Crotty Saland PC represent clients throughout the NYC area.

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