Manafort trial - live updates: Rick Gates claims political consultant Konstantin Kilmnik controlled hidden overseas accounts
Trial enters second week and Rick Gates takes the stand
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Your support makes all the difference.Rick Gates, a longtime business associate of Donald Trump's former campaign chairman Paul Manafort, on Monday testified at trial that he helped Manafort file false tax returns and hide his foreign bank accounts.
Mr Gates is expected to be the government's star witness in its case against Mr Manafort. Mr Gates, who also served on Mr Trump's campaign, pleaded guilty in February and agreed to cooperate with prosecutors under a deal that could lead to a reduced sentence.
Taking the stand on the trial's fifth day, Mr Gates admitted to helping Mr Manafort doctor financial statements, hide sources of foreign income, mislead banks to get loans and cheat on his U.S. taxes. He said he did so at Mr Manafort's direction.
“At Mr. Manafort's request we did not disclose foreign bank accounts,” Mr Gates told the jury in federal court in Alexandria, Virginia, describing their relationship of two decades as limited to business. “Outside of business we did not socialise.”
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Mr Manafort's attorneys have signalled they will seek to blame Gates and have accused him of embezzling millions of dollars from Mr Manafort. Mr Gates has been described by witnesses as Mr Manafort's right-hand man who helped run the operations of a multimillion-dollar political consulting business.
In addition to assisting in Mr Manafort's alleged crimes, Mr Gates told the jury he had failed to report his own income routed through bank accounts in the United Kingdom and stole several hundreds of thousands of dollars from Mr Manafort by filing false and inflated expense reports related to their work in Ukraine.
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 but were the first to go to trial arising from Special Counsel Robert Mueller's investigation into Russian interference in the 2016 US election.
The jury has heard how Mr Manafort made tens of millions of dollars for work with pro-Russian politicians in Ukraine. Mr Mueller is also investigating possible coordination between Trump campaign members and Russian officials in the election campaign, but the charges against Mr Manafort do not address that.
Prosecutors went through a list of overseas corporations and Gates testified that all of them were controlled by Mr Manafort and contained income earned by his political consulting work.
Mr Gates said an associate, Konstantin Kilimnik, had control over the overseas accounts. Mr Kilimnik is a Russian-Ukrainian political consultant who was indicted in June on charges stemming from the Mueller probe. In court filings Mueller has accused Mr Kilimnik of having current ties to Russian intelligence services - an allegation he has denied.
Mr Gates testified that Mr Manafort directed him to report overseas income as loans in order to lower taxable income - an allegation prosecutors have been eliciting testimony about from witnesses since last week.
Reuters
Separately, Mr Gates told the court that Paul Manfort had directed him to report money wired from his foreign bank accounts as loans, rather than as income, in order to reduce Mr Manafort’s taxable income. By reporting it as a loan, Mr Gates explained, Mr Manafort could defer the amount of taxes he owed.
Mr Gates also testified on Monday that he stole money from former Trump campaign chairman Mr Manafort.
Mr Gates, a former business partner of Manafort's, also testified that Manafort had asked him to omit information in a court deposition regarding a private equity fund.
"We did not submit the required form designating he had control over an offshore account," Mr Gates told the jury. When prosecutor Greg Andres asked why, Mr Gates replied: "At Mr. Manafort's direction."
Mr Gates also testified he and Paul Manafort knew it was a crime because they had been notified by Mr Manafort's accountants in emails.
Rick Gates told the court he had been cheating Paul Manafort out of money to the tune of "several hundred thousand" dollars.
Mr Gates told the jury that as part of his plea with the government, he revealed several other crimes that were not previously known and are not in the federal indictments of him and Mr Manafort.
Mr Gates said he stole the money from Mr Manafort by submitting to him false expense reports.
Those expenses paid to him came out of the foreign bank accounts in Cyprus that Mr Gates testified that he and Mr Manafort knowingly did not disclose to the federal government.
Paul Manafort's attorneys have signalled they will seek to blame Rick Gates and have accused him of embezzling millions of dollars from Mr Manafort. The pair have known each other for two decades and ran a multimillion-dollar political consulting business. Mr Gates also worked for Donald Trump's election campaign.
Mr Gates has testified that Mr Manafort's associate Konstantin Kilimnik was listed on the foreign accounts. Mr Klimnik is a Russian-Ukrainian political consultant who was indicted in June on charges stemming from the Mueller probe.
Late in the afternoon Monday, prosecutors sparred notably with Judge TS Ellis III over the pace of the case.
The heated confrontation came as prosecutors attempted to enter into evidence Rick Gates’s passport to show details of his travels to Ukraine and Cyprus. Judge Ellis interrupted them.
“Let’s get to the heart of the matter,” he scowled.
Judge Ellis told prosecutor Greg Andres he was looking for ways to “expedite.” Mr Andres responded, “We’re doing everything we can to move the trial along.” The dispute seemed to die for a moment, but later, as Mr Andres asked questions about Gates’s work overseas, Judge Ellis again grew irritated.
“We need to focus sharply,” Judge Ellis told the prosecutor. Mr Andres tried to explain his line of inquiry.
“Next question,” the judge snapped.
“The government…” Mr Andres started to say.
“Next question,” Mr Ellis snapped again, his voice rising.
Since the trial started before U.S. District Judge T.S. Ellis last Tuesday, Mr Manafort's lawyers have kept their cross-examinations brief and at times refrained from attempting to rebut damaging testimony in detail.
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