Former Manafort partner Gates to testify next in fraud trial

Rick Gates leaves federal court in Washington. Paul Manafort’s trial opened this week with a display of his opulent lifestyle and testimony about what prosecutors say were years of financial deception. But the

AP File Rick Gates outside the federal court in Washington in February

Paul Manafort's former business partner, Rick Gates, took the witness stand on Monday for what may be the most critical testimony in Manafort's bank and tax fraud trial.

Gates, who has been cooperating with Special Counsel Robert Mueller's investigation, is the star prosecution witness in Manafort's fraud trial in Alexandria, Va. 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 USA election.

"We didn't report the income or the foreign bank accounts", Gates told jurors, noting that he knew he and Manafort were committing crimes each time.

Laporta detailed multiple examples in which Manafort and Gates sought to doctor financial records, first in order to lower Manafort's taxable income and then later to inflate his income so that he could get bank loans.

Rick Gates told jurors that he siphoned off the money without Manafort's knowledge by filing false expense reports.

All this was an effort to make Gates seems like a credible witness against Manafort.

The hugely anticipated courtroom showdown brought Gates face-to-face with his longtime business associate and fellow Trump campaign aide.

Prosecutors say Manafort used those companies to stash millions of dollars from his Ukrainian consulting work, proceeds he omitted year-after-year from his income tax returns.

In court on Monday, a retired carpenter, a clothier and a high-end landscaper detailed how Manafort paid them in worldwide wire transfers from offshore companies.

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

The criminal case has nothing to do with either man's work for the Trump campaign and there's been no discussion during the trial about whether the Trump campaign coordinated with Russian Federation - the central question Mueller's team has tried to answer. Mr Gates was Mr Manafort's partner in the consultancy.

In questioning Laporta on Monday, a prosecutor asked the accountant about a $10 million (£7.72 million) loan purportedly received by Manafort from Russian businessman Oleg Deripaska in 2006. Gates will follow the testimony of tax preparer Cindy Laporta, who says she came to suspect Gates was misleading her about Manafort's finances.

During that part of Gates' testimony, he said that he lied in a deposition - part of an unrelated case - about the private equity firm run by Manafort's consulting group. Manafort attorney Kevin Downing will cross-examine Laporta, who is testifying under an immunity agreement because she feared prosecution for perjury or false statements.

One accounting trick saved Mr Manafort $US500,000 ($676,907) in taxes, she said.

Since the trial started before U.S. District Judge T.S. Ellis last Tuesday, Manafort's lawyers have kept their cross-examinations brief and at times refrained from attempting to rebut damaging testimony in detail.

"Gates is admitting to everything", Dilanian said.

Gates also reportedly told the court on Monday that he had been told by Mr Manafort not to disclose foreign bank accounts. Without smiling or pausing, he told the jury he had knowingly committed crimes "at Mr. Manafort's direction".

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