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Prosecutors Push Plea Deal In Investigation Of Manafort Son-In-Law

After he was named in the grand jury indictment of Paul Manafort and Rick Gates, many in the media speculated that Special Counsel Robert Mueller might also be pursuing an indictment against Manafort’s estranged son-in-law, Jeffrey Yohai, who memorably accused his one-time father-in-law and financial backer of ‘conspiring’ to mislead a federal bankruptcy court back in September.

While the speculation wasn’t wrong, the Wall Street Journal reported Thursday that prosecutors in a separate probe are seeking a plea deal with Yohai, though the exact nature of the charges being pursued - and any relationship they might have to the charges listed in the indictment - are not yet known. It’s unclear if Yohai is also still being investigated by Mueller.

Here’s WSJ:

The Justice Department is seeking to reach a plea deal in its criminal investigation of the former son-in-law of Paul Manafort, President Donald Trump’s one-time campaign chairman, according to people familiar with the matter.

 

The investigation into Jeffrey Yohai—who hasn’t been charged with any crime—by the Federal Bureau of Investigation and U.S. attorney’s office in Los Angeles is separate from the Washington-based probe of his former father-in-law and others by Special Counsel Robert Mueller, who is examining Russian influence on last year’s presidential election, some of the people familiar with the situation said.

As the investigation into Yohai’s failed house-flipping projects progressed, federal prosecutors reached out to Yohai’s attorney and to a Los Angeles-based lender, Genesis Capital LLC, about a possible plea deal. Genesis lent money to the entities Yohai created for the failed projects, which also received an investment from Manafort. WSJ previously reported that prosecutors were looking into another Yohai venture in NYC. Aaron May, a lawyer for Yohai, said in a statement to WSJ: “Yohai has not been charged with any crime nor has he entered into any plea agreements.” It isn’t clear to what charges investigators want Yohai to plead guilty; it’s also unclear what Yohai would be charged with should he decline the deal.

Manafort and Yohai worked together on real-estate deals related to multiple properties, both in Los Angeles and New York, court and real-estate records show, including some alleged to have involved loan fraud, according to Mueller’s indictment. Yohai was referred to in the indictment as Manafort’s son-in-law, but wasn’t mentioned by name. Manafort’s daughter, Jessica, filed for divorce from Yohai earlier this year. Records show a divorce judgment was issued in August. Manafort, his wife and daughter put at least $4.2 million into house-flipping projects, federal bankruptcy-court records show. Yohai put the four properties into corporate bankruptcy in December 2016, as the lender, Genesis, was moving toward foreclosure, records show.

Genesis was also the lender in early 2016 on a Brooklyn townhouse cited by Mr. Mueller in the indictment accusing Manafort of loan fraud. Manafort purchased the property through a corporation for nearly $3 million in 2012, using money from another entity in Cyprus, then took out loans from Genesis in early 2016, in part for construction at the property. Meanwhile, Genesis got loan guarantees for the Brooklyn property from Manafort, his wife Kathleen, Yohai and Jessica Manafort, court records show.

Yohai was referenced in the Manafort indictment in connection with a Manhattan condominium Manafort purchased in 2012 through a corporation for $2.85 million, which the government alleged used funds wired from entities he controlled in Cyprus. Mueller accused Manafort of fraud for telling the bank that supplied the loan that Yohai and Manafort’s daughter, Jessica Manafort, would be living there full time, when in fact they intended to rent it out on AirBnB.

Of course, this isn't the first time that Yonhai's possible cooperation with federal investigators has been reported. Politico said back in August that federal investigators had approached Yohai about cooperating earlier this summer. Their approach reportedly set off "real waves" in Manafort's orbit. Only then, they specified that it was Mueller who had come knocking, not the LA US Attorney's office.

To be sure, the WSJ report leaves many questions unanswered. Is this probe really a smoke screen to get Yohai to deliver damning testimony against his former father-in-law - something he’s already proven more than willing to provide? As the investigation moves toward its conclusion, its relationship to the Mueller probe - if any - will become more apparent.