The value of Paul Manafort's apartment in New York's Trump Tower is at issue in the prosecution of President Donald Trump's former campaign chairman and his longtime associate Rick Gates, both of whom face 12 counts related to money laundering and foreign lobbying. Manafort and Gates each pleaded not guilty.
Special Counsel Robert Mueller questioned in a motion on Sunday whether the apartment, which Manafort bought in 2006, is actually worth as much as Manafort claims.
Manafort's lawyers included the Trump Tower condo in a list of properties that Manafort was willing to put up as collateral to convince a judge to grant more favorable terms for his house arrest, which currently require that Manafort wear a GPS ankle monitor. Manafort asked for permission to travel between Virginia, Florida, Washington, D.C., and New York, as well as the removal of the GPS monitor.
In a motion filed Saturday, Manafort's attorneys claimed that the Trump Tower condo has a fair market value of $6 million and a mortgage of $3 million, making the net asset value of the apartment about $3 million.
But the government responded the following day, writing to U.S. District Court Judge Amy Berman Jackson that it "does not presently have sufficient information to assess the claimed net asset value of this property, or even to be confident that the property has equity in it at all."
The problem with Manafort's claim that his condo is worth $6 million, they wrote, is that it isn't based on any appraisal or estimate of the actual apartment. Instead, Manafort used an appraisal for a different apartment in the building that he said was worth $4.5 million, and then he tacked on an extra $1.5 million because, he said, his apartment is on a higher floor, making it more valuable.
"Meanwhile, the government has searched open source real estate value estimators and found one that lists the value of Manafort's own unit as $2.5 million, and another that lists the value as $2.7 million," wrote Mueller's team.
If this turns out to be accurate, then the $3 million mortgage that Manafort has on the property would make the apartment a liability, not an asset.
Jackson agreed with Mueller's assessment on Monday, calling the Manafort property appraisal "a good start," but one that "doesn't begin to comply" with the rules for such bonds.
Manafort's lawyers said they would work on developing a firmer appraisal for the Trump Tower condo. Prosecutors said they were comfortable with the appraisals of other properties in the bond package, however: An apartment on Baxter Street in New York City with an asset value of $3.5 million, and Manafort's home in Palm Beach Gardens, Florida, which was valued at $1.5 million.
Until Manafort's lawyers can reach a new deal with Mueller's team that is approved by Berman Jackson, Manafort and Gates will remain under house arrest.