Ex-Trump campaign chief Paul Manafort was in default on a multimillion-dollar mortgage for his Trump Tower condo at the time he forfeited that property to the U.S. government as part of his guilty plea, lawyers for Manafort’s lender said in court papers.
And now the lender, UBS Bank, is asking a federal judge for a hearing to recognize and adjudicate that bank’s interest in Manafort’s condo in the landmark building owned by President Donald Trump on Fifth Avenue in New York, according to a filing in U.S. District Court in Washington, D.C.
UBS, which said Manafort owes about $3,110,000 on the mortgage, claims to have a “vested or superior interest in the Property,” the court filing said. The bank said the U.S. government notified the bank on Oct. 11 that the judge in Manafort’s case had signed off on the forfeiture of the property the day before.
On Thursday, the judge, Amy Berman Jackson, told prosecutors in special counsel Robert Mueller’s office to answer the bank’s filing by Nov. 21.
If UBS prevails in its request, the government could be forced to give the bank its share of the proceeds of any sale of the Trump Tower property.
UBS did not say in its filing when Manafort fell into default on the mortgage or how much the condo is believed to currently be worth.
A spokesman for Mueller declined to comment, as did Manafort’s spokesman, Jason Maloni. Lawyers for UBS and Manafort did not immediately respond to a request for comment.
Manafort, 69, pleaded guilty on Sept. 14 in Washington court to conspiracy charges related to income he earned from consulting work on behalf of pro-Russia politicians in Ukraine.
The plea came a month after he was convicted at trial in a related case in Virginia federal court. Both cases were being prosecuted by Mueller’s office.
As part of his guilty plea, made right before he was due to face a second trial in Washington, Manafort agreed to forfeit an estimated $46 million worth of assets and cash.
The assets Manafort originally agreed to surrender included his home in Arlington, Virginia; a condo in lower Manhattan; a townhouse in Brooklyn, New York; and a house in the Hamptons section of Long Island, New York, as well as four bank accounts.
Manafort soon afterward told prosecutors he would give up another lower Manhattan property instead of his Virginia home. And he said he would give up his Trump Tower condo instead of one of the bank accounts.
In its court filing, UBS said it holds a mortgage for the Trump Tower property that Manafort and his wife, Kathleen, granted in April 2015.
The mortgage was granted in exchange for a variable-interest, 25-year loan in the original amount of $3 million, according to the bank. Manafort and his wife originally were paying an interest rate of just 2.055 percent per year.
Under the terms of the loan, the Manaforts were only obligated to pay interest — and not any principal — until April 2025. After that, the couple is required to pay principal and interest on the loan through May 2040.
“The Mortgage and Note are in default,” UBS said in its filing. The bank said that in addition to the principal balance of $3 million, the Manaforts owe interest in the amount of $108,437.49, late fees of $4,848.75, other fees totaling $995, as well as unspecified attorneys’ fees.
As of this month, the interest rate on the note is 4.125 percent, or daily interest of $343.75.
source : CNBC