Manafort trial: Rick Gates admits to extramarital affair and former Trump campaign aide accused of 'secret life'
Rick Gates faces tough examination from defence as they seek to undermine his credibility
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Your support makes all the difference.Paul Manafort's longtime deputy Rick Gates has told court that he spent years disguising millions of dollars in foreign income as loans to lower Donald Trump’s former campaign chairman's tax bill
MrGates, the government's star witness, testified that he and Mr Manafort used offshore shell companies and bank accounts in Cyprus to funnel the money, all while concealing the accounts and the income from US tax authorities.
“In Cyprus, they were documented as loans. In reality, it was basically money moving between accounts,” Mr Gates said during his second day of testimony in the bank fraud trial,
Under cross examination Mr Gates, admitted that he had “another relationship” involving first-class flights and luxury hotels, but denied these were funded with money embezzled from Manafort. Mr Manafort's defence called this "the secret Rick Gates".
Prosecutors summoned Mr Gates, described by witnesses as Mr Manafort's “right-hand man,” to give jurors the first-hand account of a co-conspirator they allege helped Mr Manafort carry out an elaborate offshore tax-evasion and bank fraud scheme.
On Monday, Mr Gates said the pair had committed crimes together by stashing money in foreign bank accounts and falsifying bank loan documents in order to disguise income from US tax officials.
He also acknowledged having embezzled hundreds of thousands of dollars from Mr Manafort.
Mr Manafort has pleaded not guilty to 18 counts of bank and tax fraud and failing to disclose foreign bank accounts.
The charges largely predate his five months on the Trump campaign.
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Mr Manafort’s defence hinges on pinning the blame on his former aide, and his attorneys have accused Mr Gates of embezzling millions of dollars from his former boss.
The case drew scores of people who waited in line for hours outside the courthouse and then jammed into both the courtroom and an overflow room that contained a video feed of the proceedings.
In early testimony on Tuesday, Mr Gates related his role in setting up offshore bank accounts for Mr Manafort, a complex arrangement that was requested by those paying for Mr Manafort's political consultancy work in Ukraine.
Mr Gates testified that Mr Manafort negotiated the offshore payment structure in person with Ukrainian business people, and then Mr Gates would then codify the details in writing.
Mr Gates also described to jurors how he repeatedly submitted fake financial documents allegedly at Manafort's behest as his former boss became concerned he was paying too much in taxes and, later, that his funds were drying up after the consultancy work fell away after 2014
Associated Press
Judge Ellis has abruptly announced a half-hour break after the defense prosecutor asked Mr Gates whether "other members of the special counsel's office" had asked him about his time with the Trump 2016 campaign.
Prosecutors immediately objected, and a conference was called at the bench. The judge then called the break.
The defense's cross-examination of Mr Gates is likely to restart any minute now, after an objection from federal prosecutors.
Stay tuned.
Rick Gates has now testified he would at times he would get banks to wire money from an account belonging to Mr Manafort into a company controlled by himself.
He agreed that some of the money was unauthorised but also that some was for business expenses and some were bonuses by Mr Manafort.
Mr Manafort's defence lawyer asked why would Mr Gates have called these transfers reimbursements for expenses. Mr Gates offered remorse to the jury. “I was in essence living beyond my means,” he said.
“It was a difficult time,” he said. “I regret it, clearly. I’m taking responsibility for it. I made a mistake.”
Mr Gates reluctantly admitted he engaged in embezzlement under extensive questioning from the defence. Initially Mr Gates referred to "unauthorised transactions."
When Mr Gates was asked why he wouldn't say "embezzlement," Mr Gates replied: "What difference does it make."
He finally acknowledged: "It was embezzlement from Mr Manafort."
Kevin Downing, Mr Manafort's defence attorney, began his line of questioning on day six of the trial by asking about Mr Gates' co-operation with special counsel Robert Mueller.
"When did you start providing false and misleading information to the special counsel's office?" he began, pointing to the fact that Gates had lied to investigators before entering his guilty plea.
"Have they confronted you with so many lies that you can't remember?" he added.
Mr Manafort's defence team have taken aim at Mr Gates' credibility.
In the middle of questioning, Mr Downing asked: "There was another Richard Gates, isn't that right? A secret Richard Gates?"
Gates responded that he had had an extramarital affair over ten years ago.
"As part of your secret life, did you have a flat?" Mr Downing asked. "Is that what they call an apartment in London?"
Gates acknowledged he had maintained a place in London for two months, and claiming luxury hotels as a business expense during the relationship.
Just before the jury left for the day, Rick Gates echoed other prosecution witnesses in saying Paul Manafort kept a close eye on his financial affairs.
“Mr. Manafort in my opinion kept fairly frequent updates,” Mr Gates said, after a discussion of movement between their consulting firm’s offshore accounts. “Mr Manafort was very good at knowing where the money was and where it was going.”
Judge Ellis, as he has repeatedly, interjected.
“He didn’t know about the money you were stealing,” Judge Ellis said, “so he didn’t do it that closely.”
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