Paul Manafort, the former Donald Trump campaign manager who resigned over his lobbying work in Ukraine for the pro-Russian government, has taken out over $19 million in home equity loans in New York City in the past five years, in an escalating series of transactions that includes one particularly large and unusual loan from a banker on Trump’s Economic Advisory Council.
The loan data was compiled from public sources by two New York attorneys, Julian Russo and Matthew Termine, who published it on a blog. It’s not clear what Manafort is up to, but it’s almost certainly not what home equity loans are designed for, which is home improvement. “It feels like we’re seeing a small piece of the bigger picture here,” Russo told The Intercept.
The raw facts stand out for their strangeness. Since 2012, Manafort has taken out seven home equity loans worth approximately $19.2 million on three separate New York-area properties he owns through holding companies registered to him and his son-in-law Jeffrey Yohai, a real estate investor. They include a condo on 27 Howard Street in Manhattan, a condo in Trump Tower, and a four-story, two-unit brownstone in Brooklyn at 377 Union Street.
In 2012, Manafort took out a $1.5 million home equity loan on 27 Howard Street from First Republic Bank, through his limited liability company MC Soho Holdings. Four years later, Manafort paid off that loan and got another, even bigger one — for $2.73 million, from Citizens Bank.
Manafort got a $3 million mortgage loan against the Trump Tower property in 2015, issued by UBS Bank USA, which comes due in 2040.
And in March 2016, Manafort and his son-in-law Yohai purchased a pair of short-term mortgage loans on the 377 Union Street brownstone, worth a total of $5.3 million. The brownstone was listed in the name of MC Brooklyn Holdings, a limited liability company.
By June 1, the lender, Genesis Capital, had filed for foreclosure, alleging a missed payment. In January 2017, MC Brooklyn Holdings transferred the property to Manafort, and two weeks later, Federal Savings Bank, a small lender that normally caters to low and moderate-income military veterans, issued Manafort’s wife, Kathleen, a $5.3 million loan, evidently to cover the prior Genesis Capital mortgage, and an additional $1.3 million loan. The loan is also short term, due in January 2018.
This $6.6 million in loans to one customer represents roughly 2.2 percent of Federal Savings Bank’s overall assets, and nearly 11 percent of the bank’s total shareholder equity. The total borrowing cost appears to exceed the equivalent market value of a property of that size in the neighborhood, and it’s also unusual from a risk management standpoint to loan millions of dollars for a home already in default by the same owner.
Adding to the intrigue is the identity of Federal Savings Bank’s founder, CEO, and chairman: Steve Calk, a Trump campaign supporter and member of the president’s Economic Advisory Council. Neither Federal Savings Bank nor Calk has responded to a request for comment. Through a spokesperson, Genesis Capital stated that they “do not release information to third parties about the status of our loans.”
MC Brooklyn Holdings bought the 377 Union building for $2.9 million in late 2012, according to local Brooklyn blog Pardon Me for Asking. In 2013, the New York Department of Buildings approved a permit to turn the two-unit brownstone into a single-family home. That application lists the owner as Paul Manafort. But the home has been empty since the purchase.
Though work initially started, none has been performed in the last year and a half; cinderblocks and steel beams line the front yard. A stop-work order on the project is dated February 1, after Manafort secured the new loan. Neighbors have complained about Manafort’s “eyesore” of a project. Manafort told the New York Post that he hired a new architect and plans to complete the conversion by the end of this year.
Regardless, the $6.6 million the Manaforts have borrowed on the house is well more than it is worth. Add this to the outstanding indebtedness on the Trump Tower and Howard Street properties and Manafort has $12.33 million in home equity loans outstanding, less any principal payments made since they were issued.
Manafort did not respond to repeated requests for comment.
Russo and Termine wonder if the transactions resulted in available cash for Manafort and his family, with successive loans paying off prior ones.
“You’ve got lots of LLCs, lots of properties, lots of transfers to Manafort, his wife, and his kids,” said Termine. “It didn’t smell good, and then added together, it really doesn’t.”
As it happens, Manafort’s son-in-law and occasional business partner, Jeffrey Yohai, was recently sued in federal court for taking money from a real estate partnership for personal use. Celebrity photographer Guy Aroch accused Yohai of selling him stakes in a real estate partnership over a two-year period but then using “most or all of the funds for personal travel; lavish purchases; and/or speculative ventures outside the investment mandates,” according to the lawsuit. Aroch further alleges that Yohai uses his relationship with Manafort to meet wealthy people and sell them on investing in his real estate business.
“Typically, Yohai promises his investors a quick and large return on their investments. When this promised financial performance fails to materialize and investors express their concern, Yohai simply recruits new investors to newly established LLCs — with the same claims of quick success — and repays his earlier investors with these incoming funds,” the lawsuit states.
Yohai recently declared bankruptcy on LLCs tied to four properties in California, all of which are in some stage of foreclosure. Manafort was tied to at least one of those properties as a creditor. Yohai’s lawyer, Marc Forsythe, did not respond to a request for comment.
Manafort has also been accused of misusing investor funds. In 2008, a Russian aluminum magnate named Oleg Deripaska sued Manafort in a Cayman Islands court for taking $19 million for investments and failing to explain how the money was used. For at least part of that legal dispute, Manafort could not be found.
A longtime Republican strategist, Manafort’s removal from the Trump campaign last summer came amid reports that a pro-Russian political party in Ukraine gave him $12.7 million in off-the-books payments. He has re-emerged in the news because of leaked intelligence reports suggesting his ongoing contacts with Russian government officials during the Trump campaign. Manafort has denied all of these allegations.
During the time Manafort worked for the Ukrainian government, from 2007 to 2012, he purchased four homes worth $11 million, according to public records acquired by Fusion. This includes the Trump Tower condo and the 27 Howard Street loft. He also owns a 5,600 square foot mansion in the Hamptons, a luxury condo in Alexandria, Virginia, a residence in Palm Beach Gardens, Florida, and two 5-acre horse farms in Florida and Virginia.
It’s unclear whether these are for family use or investment properties. They are typically routed through shell companies and LLCs, consistent with Manafort’s history of murky financial dealmaking with foreign billionaires, often involving real estate, the business of his father.
On Thursday, Politico reported that Manafort was the victim of a blackmail attempt. A note attached to a text from a Ukrainian politician to Manafort’s daughter (and Jeffrey Yohai’s wife) references “bulletproof facts” regarding Manafort’s financial relationship with former Ukrainian President Viktor Yanukovich, who was favored by Russia.
“Considering all the facts and evidence that are in my possession, and before possible decision whether to pass this to [the National Anti-Corruption Bureau of Ukraine] or FBI I would like to get your opinion on this and maybe your way to work things out that will persuade me to do otherwise,” the note reads.
Manafort confirmed the authenticity of the text to Politico but said he never responded “directly” to them. The text came in days before the revelation of the $12.7 million Ukrainian payment.
This gives new definition to the word “bribe”. A low interest loan with a flexible repayment schedule , to your son in law or wife. Please!!! lets pay homage to Deepthroat, “FOLLOW the MONEY!!!!!!!!
The vehicle of choice for moving hidden money around the world is publicly traded (NV,WY,DE, etc) shells on the OTC equity markets.
The center of that universe is KCG fka Knight Securities. They trade 1 TRILLION shares of these money laundering shells every year.
Guess who helped orchestrate the Knight trading glitch and eventual merger with GETCO?
https://www.sullcrom.com/lawyers/JaredM-Fishman
Sullivan Cromwell. Also home to Trump’s SEC pick Jay Clayton
Another entity involved in the OTC equity markets is this firm
https://www.linkedin.com/company/emery-capital
https://www.linkedin.com/in/dmitriy-bakholdin-444567b9/
https://www.linkedin.com/in/alexey-shakhmatov-07482423/
Nothing to see here Reince.
Then, there’s this guy who invested in Trump/Kushner related Ponzi/real estate fraud Scott Rothstein/ money laundering Mark Nordlicht/Platinum
http://useph.com/management.html
This in addition to Mannafort and Page.
Going to get very interesting
Preet “The Sherriff of Wall Street” announces “investigation into Panama Papers
http://www.nydailynews.com/news/world/preet-bharara-opened-probe-related-panama-papers-article-1.2609069
But, in Oct 2016 the NV SOS responded to Sen Wyden Shell activity inquiry. According to the NV SOS, NO law enforcement or regulator inquiry. How’s that investigation coming Sherriff?
This might help explain
https://offshoreleaks.icij.org/search?utf8=%E2%9C%93&q=trump&c=&j=&e=&commit=Search
Preet takes a Golden elevator ride
http://www.politico.com/blogs/donald-trump-administration/2016/11/manhattan-us-attorney-preet-bharara-to-meet-trump-232003
Let’s not forget Treasury Secretary Mnuchin’s bombshell disclosure
http://www.latimes.com/nation/politics/trailguide/la-na-trailguide-updates-mnuchin-said-off-shore-locations-were-1484844733-htmlstory.html
Dems blew it. Mnuchin explanation that the offshore entities were for non profits and pension funds to invest in Dune made no sense. Then he admitted “…..and foreign investors.” The question from Dems SHOULD have been “Did you ever FACILITATE tax evasion or money laundering?”
The cover up is in full swing
http://www.dw.com/en/panama-suspends-panama-papers-investigation/a-37261828
https://www.theguardian.com/commentisfree/2017/feb/21/british-snub-eu-investigation-panama-papers-treasury-hmrc
Why does Rothschild have a Reno NV office?
http://www.mcclatchydc.com/news/nation-world/national/article92679482.html
A nice investigative piece. It is really nice to read an article where there has been significant research and investigations. It seems like in this day and age, so many articles are base less, and lacking in diligence. I hope more journalists will do their research and follow the money trails as there is so much corruption right now.
Having worked on stories about the far-right and conspiracy theory sites, I see it a whole lot. No sources, no links, no facts, just fiction. Where there are links to sources, those sources are usually just other blogs in the same network of sites, never actually backing up any facts.
The mainstream media is very different. While some complain about “unnamed sources” and claim this is some attempt to manufacture facts, it’s important again to tell the difference between real journalism and gossip/tabloids.
Tabloids generally manufacture “anonymous sources” for click-bait pieces. They don’t have investigative journalists, they have gossip-mongers.
Unlike the tabloids, real news outlets use “unnamed sources” they trust, people who have been vetted, people who have confirmed their validity and their positions. They have reputations to uphold, they have careers to protect, these are professional journalists who aren’t going to make up whatever they want to sell a story in the same way a hack would for a tabloid.
Real journalism exists, this piece is a great example of it. But it also exists at the NYT and WAPO etc.
https://www.ft.com/content/33285dfa-9231-11e6-8df8-d3778b55a923
not just real estate either….
https://www.fincen.gov/news/news-releases/fincen-fines-trump-taj-mahal-casino-resort-10-million-significant-and-long
The numbers being done at a re vamped “Duty Free shop” are astronomical. Read up on money laundering in Macau. “Junkets”. He learned well from Trump. Yuan to US dollars.
https://www.bloomberg.com/news/features/2016-11-13/obscure-casino-run-by-a-trump-protege-is-raising-big-questions
And, lets not leave Jared Kushner out of the fun
http://www.institutionalinvestor.com/article/3648859/asset-management-hedge-funds-and-alternatives/jared-kushners-platinum-partners-connection.html#.WLH87_WcFdI
The “Dossier” must be pretty thick at this point.
Corrupt politicians working with corrupt bankers? This certainly IS incredible news! Hold the presses! (Let’s take it back – the power – and not quibble any longer about it.)
Next on: American Greed
Sorry, something else for you to clean up President Trump and Trumpids. God Bless You and Your Family.Amen
Get so tired of liberal attempts to somehow link Trump to something illegal or nefarious. In 2018 we will vote out the rest of the Dems also known as the party of strife violence and obstruction!
Hahaha. Cool story bro. You’re all gone in 18
I know you Trumpers have a tenuous grasp on reality already, but if you think Republicans are going to be elected again after this, you truly do need to seek professional help for that brain of yours.
Trump is currently destroying his own support. The Republican party is facing massive protest in every state. Even previously conservative states are disgusted by this party and their actions. It doesn’t matter if Republicans do everything possible to stop Dems from voting next time, every former Republican voter out there is turning on their party.
DeVos, EPA, hunting regulations, endangered species act, billionaires being sold departments to destroy, kids being attacked, tourism to the US already collapsing… The only people still defending this party are trolls and Russian bots.
Just as we saw at the pathetic inauguration, no matter how you try you cannot make fictional internet accounts into real voters.
Those crazy Republicans!
Manafort is merely taking advantage of his status as a Knight of Capitalism, which gives him the authority to steal at will. Obama let it happen, Trump will promote it.
Still waiting for some wrong doing other than not passing the “smell” test. Home equity loans do not explicitly require that the proceeds be used for property improvements.
Great article Intercept! Based on your research it appears that Manaford in on a very short leash. But having friends in high places who can make things happened for someone who is unworthy of it, will be protected by any means necessary. All of these breadcrumbs lead to the illegitimacy of the Trump administration! PERIOD!
Well, this is embarrassing for The Intercept reporter. Have your guys ever done real estate deals and own properties before? Frequent refinance is a part of the business. “Borrowing from Peter to pay Paul”, it is called. For smaller timer, this is high leverage. For mega developers, it is called banking.
Mervyn, that makes no sense at all.
Check kiting and theft of investment funds is banking???
Oh, wait, sorry……
We’re in America…
Never mind
Manafort promised me he would finance a WMD search.
What?
“Home equity loans are for home improvements” hmmmmm….really? Home equity loans are about the only borrowing tool left for entrepeneurial capital. It’s his equity, he can do what ever he wants with it unless otherwise stipulated in the contract.
Corruption we knew awaited under the exterior…
What I want to know is: is Frank Sinatra really still alive and sequestered somewhere in Trump Tower?
Good grief…you alt-right types actually pretend to support the Trumpster and his lunacy??? Then you deserve to suck the hind tit of backlog!
Yeah the whole thing smells of corruption. This guy maybe sleeping with dead flounder’s in Crimea before long.
The Intercept is embarrassing itself.
David, I think you need to think before you publish this piece, I always thought The Intercept is good and solid fact base story, although recently it doesn’t live up to this. Total $19.5 million over the past decade is not unusual if your have multiple properties free and clear. So assuming he and his son-in-law own three to four properties, average market value at 2 million a piece, one can expect about total 3-5 million outstanding mortgage loans at any given time. The lenders in your article, UBS, First Republic etc, are not politically driven lenders, they need to assess the market value of the properties before you can even get anything. In addition, HELO doesn’t ask or restrict how you use the proceeds, you can’t take the money and go on a cruising if you like. It is the ways how real estate games are play.
You realize tRump will say this is all “fake news” .
Just gonna leave this exhaustive compilation of Trump’s connections to real estate money laundering and Russian Mobsters here: https://wearethisamericancarnage.wordpress.com
David, I hope you’re working on developing a source in the Walkers law firm in the Cayman Islands. They seem to be at the center of QHG Holding, the partner in the Rosneft oil deal that was, according to the Russian Dossier, offered to Carter Page while he was advising the Trump campaign. There are far too many unexplained coincidences to let this go unchecked.
http://www.reuters.com/article/us-russia-rosneft-privatisation-insight-idUSKBN1582OH
The Federal loan should be reported to the OCC, regulator of Federal Savings Banks. That is in violation of numerous regulations, without doubt.
Cite the regulations.
So all the money is outside the country, ready to be used when Manafort needs a house next door to his buddy Yanukovych?
Now this sounds like it might lead to something.
Wow lots or Russian operatives trolling thus article. Must have struck a nerve.
This article is garbage. Just a data dump of information. Journalist clearly is good with weaving abstract data points in flowery conspiracy theories. Manafort it most likely a corrupt self dealing businessman – but these transactions are basically par for the course for how the ricj and wealthy buy real estate for use or investment. Nearly all home purchases over $1M are made in the name of LLCs, and cashing them out from time to time is also not uncommon. Probably has nothing whatsoever to do with Trump or the GOP, or Russia for that matter. But hey, why not try to tie everything into one big narrative.
so what.
the US has is an invasion problem from south of the border that has gotten worse for the past 40 EFFIN YEARS. Got a bunch of pimped out whores in office who cant do a dam thing except trash the country out, help wallstreet rob the people, and foster war fraud that gets youth killed. WTF.
ranting? maybe. OT? it’s context. The planet is run by organised crime and corrupt govs. That’s what. And i really wish TI would re-orient the framework of this site to lean toward implementation of change because certainly they are aware that the pen is mightier.
btw – just read a report about the dam guatemalans. 2 ICE planes…. A DAY. wtf.
While the loan against the “over-valued” property does seem questionable I challenge your assertion that Home Equity loans only are to be secured for “improvement” to the dwelling. Lenders don’t limit use of proceeds, if they even ask about them at all. Its possible Manafort is using the cash to fund down-payments for or purchase out-right other real property.
Ukraine on Fire:
https://www.youtube.com/watch?v=TVjzM_gJKdQ
“A controversial new documentary produced by U.S. director Oliver Stone and broadcast on Russian television presents the Ukrainian revolutions of 2004 and 2014 as organized uprisings instigated from outside and planned with U.S. participation.”
Ain’t no doubt about it.
Pretty funny that relationships with the legitimately-elected Yanukovych are deemed suspicious, while successor-to-the-coup Poroshenko gets warm fuzzies from Mike Pence.
Indeed. There is plenty of evidence of the bad guys being the ones who overthrew Yanukovich.
As Mark Ames (no fan of Trump or Putin) put it, Manafort is corrupt, but not an agent.
Paul Manafort vs. Victor Pinchuk; aka the “pro-Russian government” vs. the “pro-IMF government” distinction.
US foreign policy in eastern Europe has been to draw all states in the region into NATO, a violation of the post-Cold War era agreement that saw the dissolution of the Warsaw Pact as part of the end of the Soviet Union. Proof of this agenda is seen in Chelsea Manning’s Wikileaks trove (Cablegate), for example:
Hillary Clinton generally continued with this policy:
While the Hillary Clinton campaign tried to highlight Manafort’s connection to various business dealings in the Ukraine, they had a very similar problem: their ties to Victor Pinchuk, Ukrainian oligarach.
This internal email basically reveals that the Clinton campaign was lying about their ties to Pinchuk and their pay-to-play arrangements:
http://www.washingtonpost.com/politics/clintons-raised-nearly-2-billion-for-foundation-since-2001/2015/02/18/b8425d88-a7cd-11e4-a7c2-03d37af98440_story.html
It’s all rather illustrative of the overall Borg agenda in eastern Europe; install governments beholden to the IMF that facilitate lucrative business deals for American elites, in typical imperial style. The US-leveraged coup in 2014, carried out with neo-Nazi assistance under the direction of Victoria “Cookies” Nuland, was just part of this agenda.
“This $6.6 million in loans to one customer represents roughly 2.2 percent of Federal Savings Bank’s overall assets, and nearly 11 percent of the bank’s total shareholder equity.”
They claim to have $4 billion of loans.
Nothing at all suspicious. He’s just doing his homework from Trump University investment courses.
But are we sure the FSB he borrowed from is that bank and not Putin’s FSB, the successor to KGB?
intial blog link goes to some internal apple mail address, probably copypaste mistake. thx.