The FBI Is Investigating Paul Manafort For His Role In A Possible Real-Estate Ponzi Scheme

06.23.17 4 weeks ago 4 Comments

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Paul Manafort is involved in another FBI investigation, but this time it doesn’t involve the Russia, or his right hand man lurking around the Trump Hotel. Now he’s in hot water over potential involvement in a real estate ponzi scheme with his son in law, Jeffrey Yohai. The new brouhaha is a tale of luxury, wealth and celebrity connections like Dustin Hoffman. It’s also a tale of family drama amongst the Manaforts, who despite pulling big checks for real estate and lobbying deals, have some not-insignificant financial problems that are a tangle of shell companies and Ukranian financial connections.

The New York Times reported back in April that the same day that Manafort resigned from managing the Trump campaign, he created a shell company called Summerbreeze that quickly received loans from “two businesses with ties to Mr. Trump, including one that partners with a Ukrainian-born billionaire and another led by a Trump economic adviser.” Now a new Times story indicates that other loans tied to Summerbreeze were backed by some of Manafort’s other real estate developments, and are now under investigation. The Summerbreeze package was likely designed as a bulwark to protect the Manafort family assets from Mr. Yohai’s flunked business dealings. That’s simple enough and wouldn’t necessarily involve the FBI. But there is a strong whiff of scandal that follows many of Yohai’s business dealings and Manafort’s, too.

Take, for example, the October, 2016 accusations that Yohai and his wife, Jennifer Manafort, were illegally renting out their Manhattan properties on AirBnb for $600 a night, adding up to a total of about $30,000 a month. They responded that instead the landlord was trying to retaliate against them for complaining about the unsatisfactory condition of the apartments. So goes the world of high stakes New York real estate, no? But there are the string of huge down payments and even bigger defaults on various California and New York properties that have followed Yohai and his wife since 2015, as outlined by Entity magazine. The loans were taken out by LLCs often named after the streets the properties were on, and it was always the LLC that defaulted on the loan, rather than Yohai himself.

One can understand why Paul Manafort was not Yohai’s biggest fan when he and Jennifer first got married. Ukrainian hackers released the text messages of Manafort’s other daughter Andrea in 2016, and they reveal that initially Manafort wholeheartedly opposed the union, in part because Yohai always seemed to be in financial trouble. But Manafort was making his own real estate deals, at that time, as well as working for the Russia-backed Party of Regions in Ukraine and Russian Oligarch Oleg Deripaska. The New York Times reports that the funds he received from the Ukrainians and Russians were funneled through shell companies in Cyprus and Belize. He was also creating shell companies in the United States tied to Yohai. Whatever reservations he had about his daughter’s choice of husband, he seemed to swallow long enough to make several deals, including some with high profile clients including Dustin Hoffman.

Now the feds want Manafort’s financial records from Citizens Financial Group and the Summerbreeze LLC, on top of the accusations of laundering Ukrainian money and the U.S. Treasury probe of his offshore funds. With so many eyes on Manafort, you’d think he’d start to worry. Perhaps he is. But on the surface he’s simply carrying on with his international business deals with Shanghai billionaires, trying to leverage his past connections to the Trump campaign. It’s just business as usual.

(Via New York Times)

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