NEW YORK — Recently filed federal charges against President Trump’s ex-campaign chairman Paul J. Manafort could also pose legal and regulatory risks for the banks that lent him millions of dollars against his New York real estate in recent years.
The most serious exposure may be for a Rhode Island-based bank that employed a ‘‘conspirator’’ in Manafort’s scheme to obtain a loan he couldn’t afford, according to the 32-count new indictment unsealed last week.
Dubbed ‘‘Lender B’’ in court papers, Citizens Bank not only lent Manafort $3.4 million based on fraudulent documents but, in another case, appeared to help Manafort avoid being caught by sending back a crudely falsified financial statement that had been sent to them from a Manafort associate, according to federal prosecutors.
‘‘Looks Dr’d,’’ the unnamed banker allegedly wrote. ‘‘Can’t someone just do a clean excel doc and pdf to me?’’
Peter Lugcht, a bank spokesman, declined to acknowledge that Citizens was ‘‘Lender B’’ or answer questions about whether Citizens had reported the alleged loan application fabrications to the government. He also wouldn’t say whether it still employed the person identified as a conspirator.
The Associated Press identified ‘‘Lender B’’ and other unidentified banks referenced in court papers by cross-referencing loan amounts and dates described in the indictment with publicly available property records in New York City.
Analysts said the bank’s behavior as described in the indictment will cause problems for it beyond a possible loss on its loan, drawing scrutiny from the Office of the Comptroller of the Currency.
‘‘I would expect the OCC upon reading this indictment or news accounts of the indictment to immediately launch an investigation of what went on,’’ said Kevin Handly, a banking lawyer and former senior attorney for the Federal Reserve Board.
Details of Manafort’s banking habits were laid bare in the court papers filed last week by Robert S. Mueller III, the special prosecutor investigating Russian ties to Trump. Manafort has pleaded not guilty to money laundering and other charges.
His longtime deputy, Rick Gates, who was similarly charged with banking violations, tax evasion, unregistered lobbying, and other crimes, pleaded guilty Friday and will be cooperating with Mueller’s investigation.
Trump and his advisers say they are not worried because none of the charges lodges to date implicates the president. Yet no one outside Mueller’s office knows for sure where he is heading, and recent indictments and plea deals seem to be leading to a larger target.
In the last 10 days, Mueller has obtained indictments against 13 Russians and three Russian companies on a charge of secretly trying to help Trump win the election, added new charges against Manafort, and secured a guilty plea from a lawyer tied to Manafort’s business dealings with pro-Russian figures.
The federal charges against Manafort and Gates involve a money-laundering and fraud operation stemming from their work for Ukrainian leaders aligned with Moscow, not from their involvement in the US presidential campaign.
Along with the prospect that one of Citizens Bank’s employees allegedly aided an attempt to commit loan fraud, the details in the indictment indicate the bank failed to heed the results of its basic due diligence, eventually lending Manafort $3.4 million despite twice having reason to be wary of Manafort’s creditworthiness, prosecutors said.
In the first case, Citizens noticed that Manafort failed to disclose loans on other properties in New York in his application for a $3.4 million loan, using a condo in Manhattan’s trendy SoHo neighborhood as collateral.
That’s when Manafort asked Gates to find an insurance broker to hand over an old insurance report that didn’t list one of the loans,according to the indictment.
In a second instance, Citizens was apparently unwilling to lend Manafort money after noticing $1.5 million on his balance sheet from another account.
But the bank’s concern was apparently mollified after Manafort and Gates asked their tax accountant to send the bank a back-dated document falsely stating the $1.5 million had been forgiven, court papers say.
