Indicted ex-banker says warrant to search iPhone was tainted

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Stephen Calk, the ex-banker who faces a bribery charge over his dealings with a top Trump campaign aide, is asking a judge to suppress evidence from his iPhone that prosecutors obtained under a search warrant.

In a court filing Monday, Calk’s lawyers argued that prosecutors unfairly withheld certain exculpatory information when they asked a magistrate judge to issue the warrant, which provided a misleading picture of the evidence.

If U.S. District Judge Lorna Schofield grants the defense motion, prosecutors would not be able to present evidence gathered from Calk’s iPhone at his upcoming trial. The motion does not describe specific evidence that would be excluded.

Calk, the onetime chairman and CEO of The Federal Savings Bank, pleaded not guilty in May to one count of financial institution bribery. Federal prosecutors in New York allege that he approved loans to Paul Manafort in exchange for a potential high-ranking job in the Trump administration.

The 35-page defense filing reveals several new details about the government’s case against Calk. For instance, it shows that prosecutors obtained a search warrant for Calk’s phone in June 2017, less than six weeks after the appointment of Robert Mueller as special counsel to investigate Russian interference in the 2016 election.

Mueller’s team of prosecutors later charged Manafort, the president’s onetime 2016 campaign chair, with bank fraud and tax fraud. He was convicted last year and is currently serving a seven and a half year sentence.

Also revealed in the court document Monday were excerpts about Calk from Manafort’s grand jury testimony in the fall of 2018. Manafort testified to the grand jury after agreeing to cooperate with the government, though a judge later determined that he breached his plea agreement by lying to prosecutors.

Manafort told the grand jury that he recommended Calk for a job in the Trump administration because he felt that Calk had earned the opportunity, pointing to both the bank CEO’s resume and the campaign work he did in 2016, according to the new court filing.

In contrast, prosecutors have alleged that Manafort recommended Calk as part of a corrupt quid pro quo. Federal Savings, which is based in Chicago, ultimately approved $16 million in mortgage loans to Manafort.

Potential Trump administration jobs that were discussed for Calk included Treasury secretary, Army secretary and secretary of Housing and Urban Development, according to testimony and evidence presented at Manafort’s trial.

In a Nov. 30, 2016, email to Trump son-in-law Jared Kushner, Manafort recommended Calk and two other candidates for major appointments in the administration. “On it!” Kushner replied.

In January 2017, Calk interviewed for the post of under secretary of the Army, prosecutors have said, but he was never hired for a job in the Trump administration.

According to the document filed Monday by Calk’s lawyers, Kushner told prosecutors that he received thousands of recommendations during the presidential transition, and that he merely forwarded along the recommendation of Calk without his own endorsement or any follow-up.

Prior to seeking the search warrant, prosecutors had already learned that one of the bank’s loans to Manafort was overcollateralized, carried an interest rate of 7.25% and charged a 3% origination fee, according to Calk’s lawyers.

But the prosecutors did not disclose that information to the magistrate judge who approved the warrant.

The argument that the loans represented a good risk for the bank is likely to be a central part of Calk’s defense strategy. Judge Schofield has scheduled a Jan. 9 status conference and said that she will set a firm trial date at that time.

In the meantime, Calk’s lawyers also want the judge to compel prosecutors to turn over additional grand jury materials, as well as certain correspondence that prosecutors had with the presidential transition team and the Office of the Comptroller of the Currency.

The OCC banned Calk from the banking industry in May, one day after his indictment was unsealed.

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