Law firm tied to Manafort's Ukraine work reaches settlement with Justice Department

FILE - In this May 23, 2018 file photo, Paul Manafort, President Donald Trump's former campaign chairman, leaves the Federal District Court after a hearing in Washington. ( AP Photo/Jose Luis Magana)

A prominent law firm with ties to former Trump campaign chairman Paul Manafort's work for pro-Russian politicians in Ukraine has agreed to pay $4.6 million and retroactively register as a foreign agent, the Justice Department announced Thursday.

The settlement with the firm of Skadden, Arps, Slate, Meagher & Flom LLP brings to a close at least one part of a probe that spawned from special counsel Robert Mueller's Russia investigation, which has focused in part on Manafort's years of work in the Eastern European nation.

Prosecutors said Skadden was hired in 2012 to do work for the government of Ukraine's then-President Viktor Yanukovych, which Manafort was advising. As part of their agreement with Ukraine's Ministry of Justice, Skadden attorneys drafted a report that was used to justify what many critics charged was the political prosecution and jailing of Yulia Tymoshenko -- a fierce rival of Yanukovych and one of the leaders of the 2004-2005 Orange Revolution.

The Skadden lawyer who prepared the report, Alex van der Zwaan, pleaded guilty last year to making false statements to federal investigators and served 30 days in jail.

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Much of the law firm's fees were paid from a bank account in Cyprus that Manafort controlled. The $4.6 million fine matches the proceeds Skadden received for the work.

Greg Craig, a former attorney for Bill Clinton and White House Counsel for Barack Obama, oversaw the preparation of the report and has since left the firm. Thursday's announcement comes months after Mueller referred an investigation into Craig to federal prosecutors in Manhattan.

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The settlement says the law firm failed to register with the Justice Department under the Foreign Agents Registration Act (FARA) because an unnamed partner made "false and misleading statements" to the government that allowed the firm to avoid registration. The partner is not named, but matches Craig's description.

John Demers, the Justice Department's top national security official, said Skadden failed in its due diligence by relying on the untruthful senior partner in its responses to the government and "hid from the public that its report was part of a Ukrainian foreign influence campaign."

Skadden says in a statement that it has "learned much from this incident" and is "taking steps to prevent anything similar from happening again."

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Mueller's probe into Manafort's activities has yielded two indictments, a trial conviction and ultimately Manafort's guilty plea. The New York-based probe has also scrutinized two prominent Washington lobbying firms to determine whether they had knowingly violated FARA as part of their work for Manafort. Prosecutors in recent months have questioned witnesses knowledgeable about work performed by the two firms, the Podesta Group and Mercury Public Affairs, which have denied any wrongdoing.

Fox News' Jake Gibson, Jon Decker, Gregg Re and The Associated Press contributed to this report.