Paul Manafort indictment shows he made 'thousands of dollars a week' using Airbnb to rent out a $3 million New York City condo he bought with offshore funds
- Paul Manafort, President Donald Trump's former campaign chairman, and Manafort's associate Rick Gates have been indicted on charges including money laundering and tax fraud.
- Manafort is charged with laundering over $18 million, which the indictment says he obtained illegally from the Ukrainian government and its political leaders from 2006 to 2015.
- The indictment says Manafort used $6.4 million to purchase three residential properties in the US, including a New York City condo he rented on Airbnb.
Paul Manafort, President Donald Trump's former campaign chairman, was indicted by a grand jury Monday morning along with his business associate Rick Gates for a range of charges, including money laundering of over $21 million.The hidden millions were used "to enjoy a lavish lifestyle in the United States, without paying taxes on that income," the indictment reads.
But Manafort - who transferred funds from offshore accounts to pay for over $12 million in "personal items" ranging from home renovations to four Range Rovers - didn't just spend lavishly.
He also made money as an Airbnb landlord.
In addition to the $12 million the indictment shows Manafort spent on personal items, he also used $6.4 million from offshore accounts to purchase three residential properties in the US in 2012: a condominium on Howard Street and a brownstone on Union Street, both in New York, and a house in Arlington, Virginia.
Manafort purportedly used the shell company "MC Soho Holdings, LLC" to purchase the Howard Street condo, located in Manhattan's trendy SoHo neighborhood, for $2.85 million in 2012.
"Shell companies are perfect for owning assets or opening bank accounts without leaving a trace of whose money it actually is," as Business Insider previously reported. Manafort illegally used several shell companies to funnel money into offshore accounts so it wouldn't be taxed as income.From "at least January 2015 through 2016," he used the Howard Street property to generate income by renting it out on Airbnb and other home-rental sites, earning "thousands of dollars a week," according to the indictment.
He also claimed rental property deductions on his tax returns during that time. Typical deductions for rental-property owners include property tax, operating expenses, depreciation, and repairs. Mortgage interest on a rental property is also deductible, but Manafort bought the property in an all-cash transaction.
Then, sometime between late 2015 and early 2016, Manafort sought a mortgage on the property "to have the benefits of liquid income without paying taxes on it," according to the indictment. In other words, Manafort used the property as collateral to withdraw millions of dollars in cash in the form of a bank loan.
To secure a bigger loan at a lower interest rate for the condo, Manafort had to portray the property, which he was renting out for income at the time, as owner-occupied. The interest rate to pay back the loan is typically lower for owner-occupied properties than rental properties.
Prior to a bank appraiser's visit to the condo, Manafort wrote in an email to his son-in-law on January 26, 2016: "[r]emember, he believes that you and [Manafort's daughter] are living there."
In addition, Gates allegedly created a document that falsely stated the condo was the couple's second home.
In March 2016, the bank provided Manafort a loan of $3.18 million.
"Manafort then borrowed millions of dollars in loans using these properties as collateral, thereby obtaining cash in the United States without reporting and paying taxes on that income," the indictment reads.If you think you may have rented Manafort's Howard Street loft on Airbnb, please contact firstname.lastname@example.org to share your story.