Rick Gates Testifies That He Committed Crimes With Paul Manafort

AFP  Getty Images FILEPaul Manafort arrives for a hearing at U.S. District Court

Rick Gates has testified that he and US President Donald Trump's former campaign chairman, Paul Manafort, committed crimes.

Rick Gates, the government's star witness, recounted how he and Manafort used offshore shell companies and bank accounts in Cyprus to funnel the money, all while concealing the accounts and the income from the IRS.

Gates, who is cooperating with prosecutors in the trial of Trump's former campaign chairman, testified that Manafort directed him to report overseas income as loans in order to lower his taxable income.

Gates laid responsibility squarely at Manafort's feet, bolstering the prosecution's case that Manafort was in full control of his finances and directing Gates' actions.

Gates testified that Manafort "requested I make wire transfers from the foreign accounts" and that "at Mr. Manafort's request", the two of them "did not disclose the foreign bank accounts" to the US government.

Gates also told jurors that he cheated Manafort out of "several hundred thousand" dollars, which is likely to be a threat Manafort's attorneys pull on to try to undermine Gates' credibility with the jury.

Manafort is charged with bank and tax fraud related to political consulting work he did in Ukraine.

The jury heard testimony on Friday and Monday (local time) from accountant Cynthia Laporta, who described how Mr Manafort and Mr Gates doctored financial statements and backdated loans.

Testifying under immunity, she was the first witness to admit she knew accounting manoeuvrers Mr Manafort and Mr Gates requested of her were wrong and could be crimes.

Manafort, 69, has pleaded not guilty to 18 counts of bank fraud, tax fraud and failing to disclose foreign bank accounts.

President Donald Trump calls the investigation a political "witch hunt", and has argued Mr Manafort is being treated worse than Al Capone.

His testimony represents the biggest test yet for Mueller's investigation even though this case does not directly play into the issue of alleged cooperation by the Trump campaign in Russian election interference.

Both were indicted last October for hiding millions of dollars they made lobbying for Ukrainian politicians.

As well as serving as Manafort's right-hand man in their multimillion-dollar business, Gates was also Manafort's deputy on the Trump campaign.

During the testimony, Manafort did not stare Gates down as he did on Monday.

Prosecutors have sought to undercut this argument by repeatedly asking witnesses who dealt with Manafort and Gates about the dynamics of their relationship, trying to underscore that Manafort was the supervisor. In questioning Laporta on Monday, a prosecutor asked the accountant about a $10 million loan purportedly received by Manafort from Russian businessman Oleg Deripaska in 2006.

Gates also said he lied in a lawsuit deposition years ago, after Manafort "asked me not to include" certain things in the deposition. In exchange for his plea, Gates agreed to testify against Manafort.

"Were you engaged in criminal activity during your time working for Mr. Manafort?"

Laporta said she had grown to distrust the information Gates was providing her, though she didn't know about the embezzlement.

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