Among the purchases former Trump campaign chair Paul Manafort made with his Cypriot bank accounts were two New York City properties, a $3 million Brooklyn brownstone and a $2.9 million SoHo loft, according to the federal indictment unsealed on Monday.
In each case, according to the indictment, he lied to lenders on subsequent applications for mortgages and construction loans. In the case of the SoHo property, he told the bank the apartment was the home of his daughter and son-in-law, when he was in fact renting it out on Airbnb for several thousand dollars a week. Manafort allegedly used renovations on the Brooklyn home to take out a $5 million construction loan, which he then spent paying off a mortgage for a different property and a down payment on a third. In March, WNYC reported he had $6.8 million in loans against the Brooklyn building, which was valued by Zillow at just $4.5 to 5 million.
This is not the first time Manafort’s New York holdings have drawn attention from the media and law enforcement. Various news outlets have covered these purchases and others—a condo in the Trump SoHo among them—and the New York Post reported in March 2016 that Manafort’s properties had drawn a probe from New York Attorney General Eric Schneiderman and Manhattan District Attorney Cyrus Vance Jr. (Schneiderman wound up working with special counsel Robert Mueller on this investigation.)
At the time, investigating the purchase of the Union Street building and its languishing renovations, the Post pointed out how curious it was that Manafort would buy yet another New York home for his daughter, Jessica, and her husband, real estate investor Jeff Yohai, “since he had just bought the [SoHo] property for Jess and Yohai to live in earlier that year.” The indictment goes some way to explaining that: Manafort’s daughter and Yohai seem never to have lived in the SoHo apartment.
The Treasury Department has warned that all-cash purchases can signal that luxury residential property is being used for money laundering, and watchdogs in New York in particular have worried about the billions of dollars spent on high-value properties in the city each year. Still, it’s hard to uncover buyers’ identities and harder still to prove anything beyond insinuation about the origins of the money. (Manafort’s role was known, if the nature of his cash transfers and loan applications were not.)
The curious thing is why, after allegedly laundering more than $17 million from foreign bank accounts to fund a “lavish lifestyle” in the United States, Manafort decided to list the SoHo apartment on Airbnb—a move that, unlike all-cash purchases of multiple luxury properties, was explicitly illegal (though widely tolerated) in New York. The guy seems to have had $934,000 to spend on rugs! Did he really need another couple grand from tourists looking for a place to crash? Not even mega-rich operatives are immune to the siren’s call of making an extra buck through illegal short-term rentals.