Gates returns for high-drama testimony against Manafort

Rick Gates the star witness in the case against Trump campaign manager Paul Manafort

Paul Manafort's longtime deputy told jurors Tuesday how he spent years disguising millions of dollars in foreign income as loans to lower the former Trump campaign chairman's tax bill.

Rick Gates, Manafort's former business partner and right-hand man, appears set to undergo a brutal cross-examination by defense attorneys who are keen on damaging his credibility. Gates pleaded guilty this year to felony charges and agreed to co-operate in an investigation into possible ties between Russian Federation and the Trump campaign.

Manafort, a flamboyant figure in Washington for decades, became known for his consulting and lobbying work for ethically questionable worldwide leaders like Ukraine's Viktor Yanukovych.

When his consulting work dried up after the change of power in Ukraine, prosecutors say Manafort turned to using loans.

"At Mr. Manafort's request we did not disclose foreign bank accounts", Gates told the jury in federal court in Alexandria, Virginia, describing their relationship of two decades as limited to business.

Manafort's lawyers doubled down Monday on their main line of defense: that Manafort placed too much trust in Gates, who abused that trust by putting Manafort's money in legally compromising environs and embezzled gobs of cash from him.

The defendant's lawyers say Rick Gates embezzled millions of dollars from Mr Manafort's consulting firm.

In addition to assisting in Mr Manafort's alleged crimes, Rick Gates told the jury he had failed to report income he routed through his bank accounts in the United Kingdom and said he stole several hundreds of thousands of dollars from Mr Manafort by filing false and inflated expense reports.

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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.

Kerik said that Gates' testimony is the result of a deal Gates made to save himself, and that his freedom is contingent on being able to help Mueller convict Manafort. Gates also worked for the Trump election campaign.

Gates admitted in testimony on Friday that he had lied to Laporta, as well as other accountants and Manafort's bookkeeper.

Under the deal, Gates can face up to 10 years in prison with sentencing guidelines of 57 months to 71 months and prosecutors agreed to allow his attorney to seek a probationary sentence.

Manafort's Kiev-based aide Konstantin Kilimnik was able to collect $500,000, Gates said, but "to my knowledge it was never paid in full". The funds were logged as loans, but Gates testified they were in fact compensation to Manafort.

Prosecutor Greg Andres pointed out that he had created a "loan forgiveness letter between Mr. Manafort and Mr. Manafort".

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.

When the trial broke for lunch Tuesday, Manafort looked back at his wife, sitting in the front row, smiled and winked at her, followed by a quick shake of his head, seeming to indicate he was unfazed or unbothered by the morning's testimony. One accounting trick saved Manafort $500,000 in taxes, she said.

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