Trump pardon unwinds some Manafort forfeitures

Justice Department drops efforts to seize 3 properties of former Trump campaign manager at center of Mueller probe.

Former Trump campaign manager Paul Manafort arrives for a hearing at the E. Barrett Prettyman U.S. Courthouse.
The Justice Department has abandoned its efforts to seize three properties owned by Paul Manafort, who received a pardon from President Donald Trump in December. | Mark Wilson/Getty Images

By JOSH GERSTEIN

02/26/2021 06:37 PM EST

The Justice Department has abandoned its efforts to seize three properties owned by Donald Trump’s former campaign chairman, Paul Manafort, who received a pardon from the former president in December.

The real estate includes Manafort’s 10-bedroom, 6-bath home at Bridgehampton, Long Island, valued at $11 million on Zillow, as well as an apartment in New York’s Chinatown and a townhouse in Brooklyn.

“The department has determined that due to President Trump’s full and unconditional pardon of Paul Manafort, it is necessary to dismiss the criminal forfeiture proceedings involving the four assets which were the subject of the on-going forfeiture ancillary proceedings,” a Justice Department spokesman said Friday afternoon, following a court filing announcing the decision.

It is unclear what portion, if any, of the assets will return to Manafort as a result of the Justice Department’s conclusion that Trump’s pardon effectively nullified forfeitures that were not complete at the time he issued it late last year. Most or all of the property is likely to be sold to repay his debts and it is unclear how much money will be left over, if any.

A Manafort associate welcomed the development, but said it was unclear whether the longtime lobbyist and political consultant would benefit financially from the action.

“The government did what it had to do. It’s the law,” said the associate, who asked not to be named. “To Paul, it’s not a windfall. The question is whether it actually worth anything to him at the end of the day. All these creditors have offsets.”

The three properties as well as a Manafort bank account had been tangled in litigation long after Manafort was convicted on eight felony charges in federal court in Virginia in 2018 and later pleaded guilty to other charges as part of a plea deal with prosecutors from special counsel Robert Mueller’s office.

U.S. District Court Judge Amy Berman Jackson dismissed the forfeiture litigation and ended the associated forfeitures in an order issued shortly after the government’s filing Friday.

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The total value of the assets Manafort agreed to forfeit in his plea deal is hard to assess. Some press accounts put the total at $26 million or more, but those figures were wildly inflated because the related mortgages were not accounted for. One court order referred to $11 million in forfeiture, but the real value would rise or fall depending on the value of the real estate.

A Trump Tower apartment Manafort agreed to give up may have netted little or nothing for the government because of a mortgage on that property. The feds do appear to have successfully completed their seizure of one bank account Manafort maintained as well as a life insurance policy.

The legal wrangling over the other Manafort assets was not pursued by him, but by a Chicago-based bank that was one of his biggest lenders — The Federal Savings Bank — and by another more obscure lender. Usually, lenders with a mortgage get priority even when the federal government sweeps in to seize ill-gotten gains.

However, the Justice Department resisted those claims, suggesting that the Chicago bank may have been privy to Manafort’s activities as an unregistered foreign agent, tax evasion or other crimes he admitted to in the 2018 deal.

The bank’s founder and former CEO, Stephen Calk, was indicted on a bank bribery charge for allegedly getting Manafort’s loan approved in exchange for consideration for a post on the Trump campaign and a job in the administration. Calk was named to campaign economic board, but never got an administration job.

After Trump issued the pardon, the Justice Department asked for a series of continuances to assess its impact on the forfeitures. Some legal experts said that any forfeitures that had been completed before the pardon would be irreversible without an act of Congress, but that those still being litigated were nullified by the president’s act of clemency.

Former Mueller prosecutor Andrew Weissmann said the way Manafort’s plea deal was structured, the government could seize his assets through civil proceedings, but the Justice Department filing Friday made no mention of that.

Manafort was sentenced to a total of seven-and-a-half years in prison on the various charges he was found guilty of or pleaded guilty to. However, under a coronavirus-related program to reduce prison populations, he was released to home detention last May, after less than two years in custody. Trump’s pardon followed on Dec. 23.

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