Judge Amy Berman Jackson completed her sentencing of Paul Manafort for federal charges earlier this week, and the Manhattan District Attorney’s Office wasted no time indicting the former Trump campaign chairman on 16 additional counts for state crimes. The indictment seemed calculated to prevent Donald Trump from letting a potential confederate off the hook with a presidential pardon, while the timing allowed for the federal prosecution to fully conclude. (I have been suggesting this state-action backup strategy in Slate since July 2017.) District Attorney Cyrus Vance was quickly showered with praise (including, initially, from me). After more closely reading the indictment, though, most of the charges seem to violate New York’s double jeopardy law.
In ignoring the spirit, and possibly the letter, of these double jeopardy provisions, Wednesday’s state charges could result in a damaging setback for New York’s civil liberties and the rule of law.
At least nine, but probably 11 or 12, of the 16 counts seem to substantially overlap with Manafort’s federal conviction in August for defrauding Citizens Bank, leaving just four or five more minor charges pertaining to his involvement with a second bank. It’s unclear whether “Lender #1” in many of Vance’s charges is Citizens Bank, but it sure looks like those charges are related to the Citizens Bank loan. Whether “Lender #1” is Citizens Bank or another bank assisting the same loan, it seems like Vance is trying to prosecute Manafort for the same transaction and the same basic offense for which he was already convicted. (The New York County District Attorney’s office declined to provide comment on the case.)
To be clear, this is not a matter of federal constitutional law. The Fifth Amendment’s rule against double jeopardy permits successive federal and state prosecutions for the same acts and offenses based on the doctrine of dual sovereignty. The Supreme Court is reviewing this doctrine now in Gamble v. U.S.. But even if this rule remains in effect, many other states have their own double jeopardy rules, and New York has one of the most stringent ones in the country. New York’s provision has some exceptions that could conceivably allow this sort of prosecution to go forward. Here is that statute and its relevant exceptions:
2. A person may not be separately prosecuted for two offenses based upon the same act or criminal transaction unless:
(a) The offenses as defined have substantially different elements and the acts establishing one offense are in the main clearly distinguishable from those establishing the other; or
(b) Each of the offenses as defined contains an element which is not an element of the other, and the statutory provisions defining such offenses are designed to prevent very different kinds of harm or evil; or …
(e) Each offense involves death, injury, loss or other consequence to a different victim.
In New York, “jeopardy” attaches after a guilty plea, a conviction, or an acquittal. The problem in these cases is that if a Trump co-conspirator is convicted or pleads guilty but then receives a pardon, that co-conspirator cannot be tried again for the same crime in New York and many other state jurisdictions. Even though presidential pardons don’t affect state law, federal prosecutions do affect state law in states with such double jeopardy rules, and that creates a kind of immunity if a pardon is strategically timed after the conviction.
As I have noted, in Manafort’s trial, a lone pro-Trump holdout juror actually backfired on the former political strategist, because those hung juries preserved bank fraud charges for state prosecutors, particularly in Illinois and California. And Manafort could also face state tax charges.
However, I did not expect New York’s state prosecutors to bring charges for the same underlying facts of the bank fraud for which Manafort was already convicted. In the August trial in the Eastern District of Virginia, Manafort was convicted of defrauding Citizens Bank for a $3.4 million loan on his New York condo on Howard Street. He had been renting out the condo, not living in it, but the bank would have given him a bigger loan if it was his residence. He lied and filed false claims through much of 2016.
The new indictments under the state’s mortgage fraud statutes appear to be primarily about this same transaction. At least nine of the 16 counts, and seemingly 11 or 12, are related to a completed loan in 2016 for the same Howard Street condo, through which Manafort defrauded “Lender #1.” Counts 1, 2, and 3 say the defendant “received proceeds” for the Howard Street property, indicating that it is specifically this loan.
It is possible that “Lender #1” is not Citizens Bank, but another bank that assisted Citizens in this same loan. It seems likelier that “Lender #1” is Citizens Bank, but either way there should be a double jeopardy problem.
First, the factual evidence cited for this fraud by the Manhattan DA overlaps with the evidence from Mueller’s case. For example, page four of the state indictment cites an email from Manafort dated Jan. 26, 2016: “The appraiser for Howard St is calling to make an appointment to view the condo….Remember, he believes that you and [Individual #3] are living there.” That same email was cited on page 22 of Mueller’s indictment. There are other similar examples.
If this case goes to trial, state prosecutors will likely use even more of the same documents and evidence that the feds used to convict Manafort for “the same act[s]” and “the same transaction.” If this is essentially the same crime, might any of the state’s double jeopardy exceptions apply?
Let’s start with exception (a), which says the offenses must have “substantially different elements” and that the acts in each offense must be “clearly distinguishable” from each other.
It seems implausible that this might apply. Both cases use the same evidence of the same criminal act. Four related charges for “falsifying business records,” meanwhile, are part and parcel of the same transaction.
What about exception (b)? That rule states that “[e]ach of the offenses as defined contains an element which is not an element of the other, and the statutory provisions defining such offenses are designed to prevent very different kinds of harm or evil.”
If prosecutors can produce more direct evidence from the legislative background that the older federal bank fraud statute and the state mortgage fraud statute from the aftermath of the 2008 financial crisis had fundamentally differing purposes, this exception might be a closer call. Still, even if there are separate elements and a different timing of passage, can one really claim that “bank fraud” is preventing a “very different” kind of harm than “mortgage fraud”? When is mortgage fraud not a kind of bank fraud? And how could Manafort’s case possibly be an example of such a difference? In whatever context legislators passed these criminal laws, both statutes serve to protect the banks, their investors, and consumers who want access to capital. The federal bank fraud statutes and the state residential mortgage fraud statutes seem to have similar general purposes: to protect access to capital for lenders, borrowers, and shareholders from fraudulent practices. Further, the double jeopardy statute doesn’t say the harms have to be “different.” The statute says they have to be “very different.” Surely that must mean something. Even if one can somehow make a case that “bank fraud” (in a mortgage loan) and “mortgage fraud” (of a bank) are different in any meaningful sense, it would be tough to argue that they are “very different.” [Update: Please see additional precedents below.]*
In order to defeat a likely effort to dismiss the Manafort charges based on double jeopardy, the DA’s office might be banking on a precedent by New York’s highest court 20 years ago. In People v. Bryant, three defendants were charged federally with bank robbery and New York state tried them again for the same events, but with charges unrelated to robbing banks. These new charges were for attempted murder and possession of defaced weapons. Again, the acts were basically the same, but the New York court distinguished between the specific purpose of the federal offenses of protecting banks as opposed to the state offenses that were aimed at firearms control and the protection of police officers’ safety. The court distinguished between “the protection of financial institutions” in the federal statute as opposed to “curtail[ing] the availability of defaced firearms” and the “exclusive” focus “on the prevention of the killing of police officers.”
New York’s highest court gave a relatively permissive reading of double jeopardy here, but it is understandable how it read the purposes of each law as being “very different.” But Bryant seems clearly distinguishable from Manafort’s bank–mortgage fraud combination. Ultimately, this exception should not apply.
Finally, the third exception can apply if the offenses affected different victims.
Is it possible that the victim in New York’s charges is not Citizens, but a bank behind the scenes helping Citizens finance the loan? This sort of financing is common in mortgages. But can a prosecutor get multiple shots at trying a defendant because he can rotate through a list of direct and indirect victims of any crime? This would be an enormous loophole. Most crimes have multiple victims in an indirect sense. If prosecutors think you threw something into a crowd, can they rotate through a new trial for each member of the crowd until they get a conviction for assault? And even if they win one, can they keep going with trials and new convictions for each direct and indirect victim of the same act? Most frauds have indirect victims. A prosecutor could regularly circumvent double jeopardy rules by filing an endless series of indictments based upon one victim at a time. There surely must be a more clear distinction between different victims for this rule to make sense.
Last April, I argued that New York should amend its double jeopardy laws to defend against potentially abusive pardons. A bill was proposed in the Legislature, but it has not yet passed. What if New York were to finally amend its laws now? If these state charges against Manafort are indeed plagued by double jeopardy concerns, as appears to be the case, could they be saved by any statute to amend New York’s double jeopardy statute to close a “pardon loophole”? Probably not. Ex post facto laws, which impose criminal liability after the crime, are unconstitutional, and the Supreme Court has applied that prohibition to procedural changes, such as statutes of limitations.
Ultimately, is it ethical in any case to push the limits of double jeopardy to the maximum? Whether or not it’s against the letter of the law—and I think it is—such a prosecution appears to at the very least be against the spirit of this law. The case is also politically risky. President Donald Trump takes advantage of any opportunity to attack the legitimacy of these investigations, generally through distortions and outright lies. Why provide a legitimate excuse to attack the extensive case against Paul Manafort?
And these extra dozen charges that appear connected to Citizens Bank seem to be unnecessary. The separate four counts of falsifying financial statements to “Lender #2” appear to be sufficient to prevent Manafort’s immediate release in the case of a pardon. Illinois and California can also still charge Manafort for the hung jury bank fraud indictments. And there are surely state tax frauds in the mix in either New York or Virginia. Even if, somehow, Manafort suddenly decides to cooperate, his credibility is destroyed anyway. The right move now would be to drop the dozen “Lender #1” charges to save the legitimacy of the remaining charges and of other states’ possible charges in the future. Otherwise, these state efforts will be tainted by these overzealous charges.
In the end, the costs of prosecutorial overreach and disrespecting state civil liberties laws could actually be even deeper than the apparent strategic errors of this prosecution. Trump’s investigators and their defenders claim the high ground about the rule of law, and rightly so. But the Manhattan DA cannot claim to defend the rule of law while, in this particular case, seeming to not take Manafort’s civil liberties seriously. The case against Manafort is not just about winning and maximizing punishment. It is about higher principles of fairness and justice. Vance’s office has time to reaffirm those principles by dropping these doubled-up charges.
*Update, 3:40 p.m., March 15, 2019: Twitter user @alegalnerd has identified earlier precedents that appear to be even more problematic for Vance’s indictments. In the 1975 case Matter of Abraham v. Justices, defendants had been convicted federally for illegal drug distribution, and then the state tried to prosecute them for drug possession. New York prosecutors argued that double jeopardy did not apply because the two statutes’ purposes were different. But New York’s highest court determined that possession and distribution were not “very different” enough to evade double jeopardy scrutiny:
[P]aragraph “[b]” does not permit separate prosecutions where one offense is greater or lesser than another. Rather, it requires that the offenses be “designed to prevent very different kinds of harm or evil.” Clearly, the Federal drug conspiracy laws and the State’s drug possession laws are aimed at the same evil—narcotics trafficking.
In the 1987 case Matter of Kaplan v. Ritter, meanwhile, New York’s highest court lauded a state prosecutor for correctly dropping a state security fraud/larceny case that followed a federal RICO case, despite initial efforts to paint the goals of the statutes as “very different.” Commenting in dicta on the distinction between RICO and the state charges, and citing Abraham, the court held that “it can hardly be said that the underlying penal statutes were aimed at ‘very different kinds of harm or evil’ within the meaning of [the double jeopardy statute].”
The court then warned against prosecutors taking such a flexible interpretation of that exception provision, which “could well lend itself to unilateral evasion [of the rule] by the very entity that the Legislature sought to regulate by enacting a statutory double jeopardy protection for those accused of crimes.” This is a clear warning from New York’s highest court to prosecutors not to do what Vance appears to have done in his case against Manafort.
Drug distribution and drug possession seem to be more “different” than bank fraud and residential mortgage fraud. Similarly, racketeering statutes and state securities fraud and larceny statutes also cover different harms. Yet the court rejected double jeopardy exemption claims on both sets of statutes and warned against such efforts to erase the rule. These cases clarify that by “very different,” the Legislature meant “very different.” It is difficult to see how New York courts will allow these charges to go forward, and it is difficult to understand why Vance and his team brought these unnecessary and seemingly impermissible charges.