Paul Manafort may not be getting the relief he’s hoping after a real estate investment by his former son-in-law went south. On Thursday, April 27, a bankruptcy trustee in California sued the embattled former campaign manager to President Donald Trump, claiming Manafort’s investment in the failed project was not a loan and rather a capital contribution.

Manafort provided his former son-in-law Jeffery Yohai with $2.7 million for the purchase of a property at 779 Stradella Road in the Bel-Air section of Los Angeles, according to court filings first obtained by The Wall Street Journal

Thomas Casey, the bankruptcy trustee and plaintiff in the lawsuit, believes that money was made as a capital contribution, and therefore, Manafort would not be entitled to any of the money made from a sale of the estate, until all other creditors are paid off in entirety.

“Plaintiff is informed, believes, and alleges that Manafort did not loan any funds to the Debtor but rather made a capital contribution the Debtor,” the lawsuit states. “The closing statement for the Property (along with its notes) suggest that Manafort’s wife and Baylor LLC deposited certain of the funds used to purchase the Property.”

Baylor LLC is the shell company allegedly used by Manafort and Yohai to manage the property. Casey alleges in the filings that on Dec. 1, 2016, Yohai executed a corporate resolution, as a member of Baylor, appointing Manafort as the managing member of Baylor.  

In July 2017, The New York Times reported that the FBI was investigating multiple failed real estate deals between Manafort and Yohai — included a high-profile one with actor Dustin Hoffman and his son Jacob Hoffman. 

In October 2017, Manafort and his longtime business associate Rick Gates were indicted on multiple charges including conspiracy against the United States and money laundering related to Robert Mueller’s probe into Russian interference in the United States presidential election. It was alleged that Manafort laundered money through overseas shell companies to purchase luxury items, including real estate.  

Email Patrick Kearns

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