Rick Gates takes the witness stand at Paul Manafort’s tax, fraud trial

Geneva Stokes
August 7, 2018

The day featured the defense's cross-examination of Cindy Laporta, the onetime Trump campaign chairman's former accountant and tax preparer; testimony from a Treasury Department employee who researched whether Manafort had filed reports of foreign bank and financial accounts, or FBARs; and Manafort's former deputy, Rick Gates.

The President is watching proceedings carefully as Mueller appears to be moving closer to his inner circle on multiple fronts and has complained that Manafort has been treated like a mobster - even as the White House has tried to open up some distance between Trump and his former campaign chairman.

Gates, who also was an official on Trump's campaign, pleaded guilty in February to lying to investigators and conspiring to defraud the United States and agreed to cooperate.

"In most instances, it was clear that Mr. Manafort knew what was going on", she said.

This courtroom sketch depicts Rick Gates, right, answering questions by prosecutor Greg Andres as he testifies in the trial of Paul Manafort in Alexandria, Va.

Manafort's defense has sought to blame Gates, described by witnesses as his "right-hand man", for any illegal conduct and accused him of embezzling millions of dollars from Manafort.

The jury heard how Mr Manafort made tens of millions of dollars for political work with pro-Russian politicians in Ukraine.

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

A $1 million payment for work in 2014 was "significantly past due" and "Mr. Manafort was quite upset the money had not been sent", Gates told the court.

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Those admissions are likely to become a focal point for Manafort's defence team when he is cross examined on Tuesday. Gates said he did not submit the required forms "at Mr. Manafort's direction".

The trial marks the first test of the special counsel Robert Mueller's investigation into possible collusion between the president's election campaign and Russian agents. Gates also worked for the Trump election campaign.

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

Gates testified that Manafort told him to report overseas income as loans to lower Manafort's taxable income, supporting the testimony of his accountant.

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 presenting their case.

Gates also said he lied in a lawsuit deposition years ago, after Manafort "asked me not to include" certain things in the deposition. The funds were logged as loans, but Gates testified they were in fact compensation to Manafort. Laporta said she didn't believe the loan had actually been forgiven.

And if Manafort did indeed open those accounts, that inherently means he knew they existed - and that he failed to report them to his tax preparers.

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

Laporta thought that was odd, so she asked Gates for information about the $2.4 million Manafort was supposedly owed.

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