Loans issued by a bank run by former campaign adviser Steve Calk are focus of subpoena
PHOTO: MATT ROURKE/ASSOCIATED PRESS
New York prosecutors have demanded records relating to up to $16 million in loans that a bank run by a former campaign adviser for President Donald Trump made to former campaign chairman Paul Manafort, according to a person familiar with the matter.
The subpoena by the Manhattan district attorney’s office to the Federal Savings Bank, a small Chicago bank run by Steve Calk, sought information on loans the bank issued in November and January to Mr. Manafort and his wife, the person said. The loans were secured by two properties in New York and a condominium in Virginia, real-estate records show.
Asked about the subpoena Monday, Mr. Calk said he had no comment.
A spokesman for Mr. Manafort declined to comment.
Mr. Manafort, a Republican political consultant who spent years working for a pro-Russia party in Ukraine, is among the Trump associates at the center of federal and congressional investigations into Russian meddling in last year’s presidential election.
Russia has denied meddling in the election, and Mr. Trump and his representatives have said there was no collaboration. Mr. Manafort hasn’t been accused of wrongdoing and has said any suggestion that he coordinated with Russia is unfounded.
The Wall Street Journal reported in May that Manhattan District Attorney Cyrus R. Vance Jr. and New York Attorney General Eric Schneiderman had begun examining real-estate transactions by Mr. Manafort, who has spent and borrowed tens of millions of dollars in connection with property across the U.S. over the past decade. Investigators at both offices are examining the transactions for indications of money-laundering and fraud, people familiar with the matters have said.
The Journal reported that at the time of the loans from Federal Savings Bank, Mr. Manafort was at risk of losing a Brooklyn, N.Y., townhouse and his family’s investments in California properties being developed by his son-in-law, real-estate and court records show.
Mr. Calk was a member of Mr. Trump’s economic advisory panel who overlapped with Mr. Manafort on the Trump campaign. Messrs. Manafort and Calk knew each other before the campaign, a person familiar with the relationship has said.
The bank’s loans to Mr. Manafort equaled almost 24% of the bank’s reported $67 million of equity capital, according to a federal report. Around the time they were issued, Mr. Calk had expressed interest in becoming Mr. Trump’s Army Secretary, the Journal previously reported, citing three people briefed on the Army interactions.
A veteran whose bank caters to former members of the military, Mr. Calk didn’t get the job, and previously declined to comment on it.
Mr. Calk has previously said that the loans to Mr. Manafort were standard with more than sufficient collateral.
Mr. Manafort’s Brooklyn townhouse was in foreclosure after a loan against the property, which was used for the son-in-law’s project elsewhere, went into default, a lawyer working with Mr. Manafort has said. Loans for the son-in-law’s California projects also went into default last year, jeopardizing $4.2 million that Mr. Manafort, his wife and daughter had put into those projects, real-estate and bankruptcy court records show.
As part of its probe into Mr. Manafort, the New York attorney general’s office in recent weeks sought information about investment deals involving his son-in-law in New York, a person familiar with the matter said. The son-in-law, Jeffrey Yohai, was accused in a civil suit in New York in November of defrauding a photographer of a $2.9 million investment. Mr. Yohai has denied any wrongdoing in a court filing, calling the allegations “extremely derogatory.” That suit is pending.
Mr. Yohai couldn’t be reached for comment.
A Federal Bureau of Investigation agent in the Los Angeles area requested information on the same deals involving Mr. Yohai, according to the person familiar with the matter. It is unclear whether that request related to the federal investigation of Mr. Manafort or an inquiry into the son-in-law.
In mid-April, federal investigators requested Mr. Manafort’s banking records from Citizens Financial Group Inc., the Journal previously reported.
July 17, 2017 5:31 p.m. ET