Rick Gates admits to committing crimes with Paul Manafort

Rick Gates admits to committing crimes with Paul Manafort

The fifth day of former Trump campaign chairman Paul Manafort's trial, after a weekend break, surprised the attendees in the courtroom when prosecutors called Manafort's longtime deputy Rick Gates to testify.

Prosecutors have been preparing for this credibility battle by asking a number of witnesses speak to Manafort's role as a supervisor over Gates.

Rick Gates has been regarded as a crucial government witness ever since he pleaded guilty previous year and agreed to cooperate in special counsel Robert Mueller's investigation. Gates said that, at the direction of his boss, he helped Manafort falsify his tax returns, failed to report 15 foreign bank accounts, and did not register Manafort as a foreign agent, as is required by law.

Gates is the prosecution's star witness after he cut a plea deal this year and admitted two felony charges. Gates also worked for the Trump election campaign.

Two documents could prove troublesome for Manafort, 69.

Jurors will hear again Monday from Cynthia Laporta, an accountant who testified August 3 about going along with phony, backdated documents meant to help lower Manafort's tax bills and secure real-estate loans even as his personal debt rose.

Gates says that when millions of dollars came in from Manafort's Ukrainian consulting work, Manafort would decide whether to classify it as income or a loan.

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After that, Gates sent her a document dated March 6, 2014, that purported to represent a $900,000 loan from a Cyprus entity, Telmar Limited, to Manafort's company. For instance, on Monday, after federal financial crimes specialist Paula Liss testified that neither Manafort nor his wife had reported foreign bank accounts to her agency, FinCEN, defense attorney Tom Zehnle asked her if a person owning less than 51 percent of a company would need to report those accounts. Gates says the goal of the fraud was to lower Manafort's tax bill and allow him to defer payment on the income until later years. Mueller is also investigating possible coordination between Trump campaign members and Russian officials in the election campaign, but the charges against Manafort do not address that.

Some of the manoeuvrers were at the request of Mr Gates, while others implicated Mr Manafort, Ms Laporta testified. 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.

But Laporta's testimony raised the stakes for Manafort, legal experts said.

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. The effect of the loan was to reduce Manafort's income by that amount and reduce his taxes, she said.

Notably, after urging prosecutors to speed things along as jurors heard from 14 witnesses last week, U.S. District Judge T.S. Ellis III said late on August 3 that Downing could begin his questioning of Laporta on Monday and wouldn't rush him.

Under cross-examination, she said at the time she believed Manafort was directing Gates' actions and "knew what was going on".

Gates also reportedly told the court on Monday that he had been told by Mr Manafort not to disclose foreign bank accounts.

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