https://www.wsj.com/articles/manafort-sought-deal-in-next-trial-but-talks-broke-down-1535404819

Manafort Sought Deal in Next Trial, but Talks Broke Down
Negotiations stalled after Mueller raised issues

By Aruna Viswanatha
Aug. 27, 2018 5:20 p.m. ET

Paul Manafort’s defense team held talks with prosecutors to resolve a second set of charges against the former Trump campaign chairman before he was convicted last week, but they didn’t reach a deal, and the two sides are now moving closer to a second trial next month, according to people familiar with the matter.

The plea discussions occurred as a Virginia jury was spending four days deliberating tax and bank fraud charges against Mr. Manafort, the people said. That jury convicted him on eight counts and deadlocked on 10 others. Prosecutors accused Mr. Manafort of avoiding taxes on more than $16 million he earned in the early 2010s through political consulting work in Ukraine.

The plea talks on the second set of charges stalled over issues raised by Special Counsel Robert Mueller, one of the people said. It isn’t clear what those issues were, and the proposed terms of the plea deal couldn’t immediately be determined.

Representatives for Messrs. Manafort and Mueller declined to comment.

The talks were aimed at forestalling a second, related trial for Mr. Manafort, which is scheduled to begin on Sept. 17 in Washington.

Prosecutors and defense lawyers have been arguing over how to describe that case to the jury and what evidence can be presented at trial. They are scheduled to discuss those issues at a hearing Tuesday morning before U.S. District Judge Amy Berman Jackson.

Mr. Manafort faced two separate trials on related allegations in neighboring districts because he declined to let prosecutors combine the charges into one case. From a defense perspective, such a move can force prosecutors to fight two battles and divide resources.

The plea discussions on the Washington case represent a softening in posture for Mr. Manafort, who has fought charges brought by Mr. Mueller’s 15-month investigation longer and more aggressively than other defendants in the probe.

Three other former Trump campaign aides, including former Manafort business associate Richard Gates, pleaded guilty to lying to investigators and other crimes not core to Mr. Mueller’s mandate of examining Russian interference in the 2016 election. Twenty-five Russians have also been charged with hacking and other crimes. Moscow denies any election meddling.

The Virginia indictment charged Mr. Manafort with filing false tax returns between 2010 and 2014 and misleading multiple U.S. banks to obtain millions of dollars in loans in 2016, after his Ukraine income allegedly dried up.

Prosecutors have said the tax fraud charges against Mr. Manafort could result in a prison term of eight to 10 years, but some other tax-related sentences have fallen well below that.

U.S. District Judge T.S. Ellis, who oversaw Mr. Manafort’s Virginia case, last year sentenced a retired business school professor to seven months after he pleaded guilty to hiding $220 million in foreign accounts and not paying $18 million in federal and state taxes.

Unlike Mr. Manafort, that defendant had previously paid a $100 million penalty to the U.S. Treasury and cooperated in the investigation.

After Mr. Manafort’s Virginia conviction last week, a juror said the vote on the other 10 counts was 11-1 in favor of conviction. The juror, a self-described Trump supporter, told Fox News the evidence was “overwhelming,” and that the other jurors had tried to convince the lone holdout to switch her vote.

Prosecutors have until Wednesday to report whether they plan to retry Mr. Manafort on the deadlocked counts. For now, both sides appear to be preparing for the Washington trial.

In that case, prosecutors accuse Mr. Manafort of not registering in the U.S. for his lobbying work for the Ukrainian government between 2008 and 2014, and of conspiring to launder millions of dollars in income from that work to hide it from U.S. authorities.

In June, prosecutors added charges accusing Mr. Manafort of trying to influence the testimony of potential witnesses. That prompted Judge Jackson to send Mr. Manafort to jail as he awaited trial.

In a filing late Friday, prosecutors said they expected to take 10 to 12 days to present their case. Last week they turned over to Mr. Manafort’s team more than 1,500 exhibits they plan to present.

Mr. Manafort’s attorneys said they weren’t sure if they would present a defense, but if they did, it could take three or four days. They said they were in the process of identifying expert witnesses who could testify on money-laundering and foreign-lobbying registration rules.