Manafort's right-hand man testifies against him in tax fraud case

Lamar Ellis
August 8, 2018

The ex-deputy of Donald Trump's former campaign manager Paul Manafort has told a court he committed crimes with his former boss and stole from him.

Gates, whose testimony in federal court in Alexandria, Virginia, was continuing, was expected to be a star witness in the government's case, having pleaded guilty in February and agreed to cooperate with prosecutors under a deal that could lead to a reduced sentence.

There is an old saying that "there is no honor among thieves", and one of the many things Gates has confessed to is using falsified expense reports to embezzle hundreds of thousands of dollars from Manafort's company-embezzlement that both federal prosecutors and Manafort's defense have acknowledged during the trial.

At one point Gates, still without meeting Manafort's eye, testified that his former boss is "probably one of the most politically brilliant strategists I've ever worked with". They were the first two people indicted by Mueller's grand jury.

Paul Manafort's ongoing trial in Virginia, on charges that include bank and tax fraud, may be a sideshow to Special Counsel Robert Mueller's larger Russian Federation investigation, but it produced a pretty compelling moment of courtroom drama on Monday. While outside the scope of the trial, Mueller is also investigating whether Trump campaign members coordinated with Russian officials, an allegation President Donald Trump denies.

Manafort is charged with bank and tax fraud related to political consulting work he did in Ukraine.

He has also sought to blame Mr Gates for the crimes.

Gates began working for Manafort in 2006 on his business ventures in Ukraine. Laporta said she had no indication that the loan from Deripaska had been paid off.

Gates - who served on the 2016 Trump presidential campaign with Mr Manafort - told the court he had stolen from other employers, too.

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Some observers who watched Gates' testimony on Monday said they thought he was credible.

Gates is cooperating with the investigation as part of a plea bargain with the prosecution, whilst Paul Manafort denies all charges- which include tax fraud; bank fraud; and failing to report foreign bank accounts.

The second week of the tax evasion and bank fraud trial of Paul Manafort kicked off Monday. But Trump has shown interest in the proceedings, tweeting support for Manafort and suggesting he had been treated worse than gangster Al Capone.

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 did embezzle money from Manafort by adding money to expense reports and creating fake expense reports altogether, he admitted Monday. He testified that at Manafort's instruction, he lied to Manafort's accountants about foreign bank accounts in order to avoid paying taxes on that money.

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 Cyprus, they were documented as loans".

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

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