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Star witness Gates resumes testimony in Manafort trial

August 7, 2018

A day after testifying against longtime boss Paul Manafort, Rick Gates returned to the witness stand Tuesday as the government’s star witness in the financial fraud trial of President Donald Trump’s former campaign chairman.

Gates walked into a packed courtroom a day after he calmly acknowledged having embezzled hundreds of thousands of dollars from Manafort and said the two had committed crimes together by stashing money in foreign bank accounts and falsifying bank loan documents.

Prosecutors summoned Gates, described by witnesses as Manafort’s “right-hand man,” to give jurors the direct account of a co-conspirator they say carried out an elaborate offshore tax-evasion and fraud scheme on behalf of his boss.

In early testimony Tuesday, Gates related his role in setting up offshore bank accounts for Manafort, a complex arrangement that was requested by wealthy and powerful Ukrainian businessmen who bankrolled Manafort’s political consulting work in the country.

Manafort and Gates were the first two people indicted in special counsel Robert Mueller’s investigation into potential ties between Russia and the Trump campaign. But Gates pleaded guilty months later and agreed to cooperate in Mueller’s investigation of Manafort, the only American charged by the special counsel to opt for trial instead of a guilty plea.

Gates, who said he has met with the government 20 times ahead of his testimony, is expected to remain on the stand for several hours Tuesday and then face a bruising cross-examination as defense lawyers try to undercut his credibility and pin the blame on him.

His testimony drew scores of people who waited in line for hours outside the courthouse and then packed both the courtroom and an overflow room that contained a video feed of the proceedings.

On Monday, Gates spoke in short, clipped answers as Manafort rarely broke his gaze from the witness stand. His testimony followed that of vendors who detailed Manafort’s luxurious spending and financial professionals who told jurors how the defendant hid millions of dollars in offshore accounts.

But Tuesday, Manafort did not stare Gates down. Instead, he glanced up at him periodically, but mostly stared intently at documents displayed for the jury on a screen in front of him. Gates kept his focus on prosecutor Greg Andres as he answered his questions.

Gates, who is awaiting sentencing, told jurors that he siphoned off the money without Manafort’s knowledge by filing false expense reports. He also admitted to concealing millions of dollars in foreign bank accounts on Manafort’s behalf and to falsifying loan applications and other documents to help Manafort obtain more in bank loans.

“We didn’t report the income or the foreign bank accounts,” Gates told jurors, noting he knew he and Manafort were committing crimes each time.

Gates, who also served in a senior role in Trump’s presidential campaign, read off the names of more than a dozen shell companies he and Manafort set up in Cyprus, St. Vincent and the Grenadines and the United Kingdom to stash the proceeds of Manafort’s Ukrainian political consulting work.

Gates said he repeatedly lied to conceal the bank accounts and, at Manafort’s direction, would classify money that came in as either a loan or income to reduce Manafort’s tax burden.

In addition to the embezzlement, Gates also told jurors about other crimes he committed, including credit card and mortgage fraud, the falsification of a letter for a colleague involved in an investment deal and making false statements in a deposition at Manafort’s direction.

The criminal case against Manafort has nothing to do with either man’s work for the Trump campaign, and there’s been no discussion during the trial about whether the Trump campaign coordinated with Russia — the central question Mueller’s team has tried to answer. But Trump has shown interest in the proceedings, tweeting support for Manafort and suggesting he had been treated worse than gangster Al Capone.

U.S. District Judge T.S. Ellis III, who repeatedly interrupted prosecutors last week as they tried to present evidence about Manafort’s lavish life, such as $900,000 in expensive suits and a $15,000 ostrich jacket, has clashed with prosecutors, urging them to hurry up while presenting their case.

On Monday, Ellis erupted on Andres outside the presence of the jury. Ellis chastised the prosecutor for questioning Gates on the backgrounds of the Eastern Europeans who made payments to Manafort, saying it was irrelevant to the tax evasion and bank fraud charges.

“We need to move the matter along,” Ellis said, adding: “I don’t think this case is as complex as it could be made to be. I think it’s simpler than that.”

Andres said he was obligated to show the jury why Manafort was getting tens of millions of dollars in payments to prove it was income.

“It’s not 10 questions,” Andres shot back. “It’s one.”

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