Rick Gates, the star witness in special counsel Robert Mueller's fraud and conspiracy trial against former Trump campaign chairman Paul Manafort, took the stand Monday to testify that he committed crimes with his former business partner. In a blow to the case being laid out by Manafort's defense team, Gates then told prosecutors that Manafort directed him to report overseas income as loans as a way to lower his taxable income. Since their opening statement last week, Manafort's lawyers have sought to blame Gates for breaking finance laws, framing him as a liar who abused Manafort's trust and embezzled millions of dollars from him. Gates, clad in a blue suit and sporting an uncharacteristically clean-shaven face, did admit in court that he stole hundreds of thousands of dollars from Manafort by filing false expense reports. But while sitting just a few feet from Manafort, Gates testified that Manafort worked with him to commit financial crimes, including filing false tax returns. Manafort directed him to commit other crimes, Gates said, such as not disclosing foreign bank accounts and omitting information from a court deposition. Manafort reportedly stared directly at Gates, while Gates avoided eye contact with Manafort. Gates listed 15 foreign entities that he said were not reported to the government. He told prosecutors that the money in those accounts came from Manafort's work as a consultant and lobbyist in Ukraine for ex-leader Viktor Yanukovych and his pro-Russian Party of Regions. Prosecutors have alleged that Manafort made millions of dollars for his efforts in Ukraine, but resorted to bank fraud after Yanukovych was deposed in 2014, which dried up Manafort's cash flow and made it difficult to maintain his pricey spending habits. Gates pleaded guilty in February to lying to investigators and conspiracy against the United States, and struck a plea deal to fully cooperate with the special counsel. His potential sentence was drastically reduced to nearly six years, and the special counsel holds the power to petition the court to further reduce his sentencing time based on his cooperation. In court on Monday, Gates said that under sentencing guidelines he could face as few as 57 months for his crimes. Manafort has pleaded not guilty to the 18 criminal counts against him in the Virginia federal criminal case, as well as similar charges in a case set to go to trial in September in Washington district court. Mueller's team lodged charges against Manafort in both cases, though neither are directly related to the special counsel's ongoing probe of potential coordination between the Trump campaign and Russia. The absence of a direct connection between so-called collusion and Manafort's alleged crimes has not gone unnoticed by Trump. He tweeted on the Aug. 1 — the second day of Manafort's trial — that "these old charges have nothing to do with Collusion - a Hoax!" Trump tweet In fact, in a February 2018 indictment, the special counsel accused Manafort of hiding his ties to foreign bank accounts as recently as 2016. In a follow-up Twitter post two hours later, Trump compared Manafort's treatment by federal authorities with notorious mobster Al Capone. Trump tweet 2 Gates was questioned in court on Monday by U.S. attorney Greg Andres, who has taken a leading role in questioning witnesses and fielding both questions and criticisms from presiding Judge T.S. Ellis. Gates follows more than a dozen witnesses brought in by the U.S. attorney to testify against Manafort. Prosecutors have highlighted dozens of invoices, email threads and financial statements to bolster their accusations that Manafort filed false tax returns and committed bank fraud to maintain his lavish spending habits. The most serious charges against Manafort are nine counts of bank fraud and conspiracy. If convicted, Manafort could be sentenced to as much as 30 years in prison for each count. Reuters and NBC News contributed to this report.<doc-sep>Special counsel Robert Mueller’s team said Wednesday it may not put Rick Gates on the stand to testify against his former business partner Paul Manafort. While prosecutors said they’re still deciding, a move to keep Gates off the stand would be stunning since he was expected to be the star witness against Mr. Manafort, a former Trump campaign chairman on trial for bank and tax fraud. By not calling Gates, prosecutors could avoid putting him in the direct crosshairs of Mr. Manafort’s attorneys. On Tuesday, defense attorney Thomas Zehnle blasted Gates in his opening statement. He called Gates a thief and a liar who embezzled millions from Mr. Manafort’s company and then committed financial fraud to cover it up. Mr. Zehnle also alleged Gates, not Mr. Manafort, was responsible for the crimes prosecutors have lodged against his client. Defense attorneys could still call Gates as a witness, but that could prove challenging with the ability to attack his initial testimony on behalf of the prosecution. The stunning disclosure came as prosecutor Uzo Asonye was questioning an FBI agent about a financial document apparently authored by Mr. Gates. Judge T.S. Ellis III interrupted the testimony to ask why the agent was discussing the memo and not its supposed author. “He may testify in this case, your honor, he may not,” Mr. Asonye said. Journalists and others immediately scrambled out of the courtroom to the report the revelation, amusing Judge Ellis. “That’s news to me and about 25 others who scurried out of here like rats on a sinking ship,” Judge Ellis shot back. Mr. Asonye attempted to backtrack, telling Judge Ellis that evidence presented will determine which witnesses testify. But that only elicited a sharp rebuke from the judge. “You know who you are going to call,” he said. “If you are going to call Mr. Gates, this is a waste of time.” The Gates disclosure largely overshadowed the second day of Mr. Manafort’s trial in Alexandria, Virginia. Prosecutors spent most of the afternoon detailing the former political operative’s opulent lifestyle, spending millions on luxury clothes and automobiles with much of it paid with wire transfers from offshore bank accounts. Maximillian Katzman described Mr. Manafort as one of his “top five clients” at the Midtown Manhattan upscale menswear shop where he used to work. Between 2010 and 2014, Mr. Manafort spent more than $900,000 on suits and other luxury items at the store, including $444,160 in 2013 alone. He said most customers paid by check, but Mr. Manafort was the only client who paid using wire transfers from foreign bank accounts. Prosecutors have said those accounts, set up in Cyprus and other countries, were used by Mr. Manafort to avoid paying taxes on the millions of dollars he earned from his lobbying work in Ukraine. Daniel Opsut, who works at an Alexandria Mercedes-Benz dealership, said Mr. Manafort’s wife, Kathleen Manafort, bought a new 2013 Mercedes-Benz SL550 for about $123,000. The car was paid, in part, from a bank account in Cyprus. Mr. Opsut said paying from offshore accounts is uncommon, but “not unheard of.” Other witnesses, including an accountant for another high-end clothing retailer, construction contractor and realtor, shared similar stories about millions of dollars in purchases paid for with overseas bank accounts. Wayne Holland, a longtime neighbor of Mr. Manafort and realtor, said Mr. Manafort bought his daughter Andrea a house in Arlington, Virginia, for $1.9 million. Mr. Holland said the house was paid for through a company called Lucicle Consultants Limited, a shell company in Cyprus. Judge Ellis quickly became frustrated with the repetitive testimony. On more than one occasion, he scolded prosecutors for spending too much time on Mr. Manfort’s lifestyle. “I understand this effort to show that he lived lavishly, but at some point it’s not relevant,” he told prosecutor Greg Andres. Two witnesses testified that invoices linked to them were inaccurate, sparking an odd mystery prosecutors did not explain. Mr. Katzman was shown a bill purportedly sent from his store, Alan Couture, that he identified as fake. He said the store’s name was incorrectly spelled as Alan Corture and had the wrong Zip code. The bill was sent to a company called Global Endeavor, but Mr. Katzman was unaware of the company. “We have never billed to Global Endeavor, nor had a client named Global Endeavor,” he said. Defense attorney Jay Nanavati appeared to indicate that Gates was responsible for the fake invoices. He asked Mr. Katzman if he knew of Gates’ “level of education and spelling abilities.” Mr. Katzman said he didn’t and had never met Gates, although he did email him when he was unable to reach Mr. Manafort. Construction contractor Stephen Jacobsen later said a bill sent to Global Endeavor had the imprint of his company’s logo. But said the $130,000 bill did not include an address and was for architecture and design work, which he did not do. While jurors were hearing about Mr. Manafort’s spending habits, President Trump defended his onetime campaign chairman. Mr. Trump said Mr. Manfort is being treated worse than Al Capone. “Looking back on history, who was treated worse, Alfonse Capone, legendary mob boss, killer and ‘Public Enemy Number One,’ or Paul Manafort, political operative & Reagan/Dole darling, now serving solitary confinement – although convicted of nothing?” Mr. Trump tweeted. The president misspelled Mr. Capone’s first name, Alphonse. He served 11 years in a federal prison on income tax evasion charges. Sign up for Daily Newsletters Manage Newsletters Copyright © 2021 The Washington Times, LLC. Click here for reprint permission.<doc-sep>Prosecutors from special counsel Robert Mueller’s office on Thursday walked back their earlier claim that Rick Gates may not testify in the trial of his former business associate Paul Manafort. “We have absolutely put him on the witness list,” prosecutor Greg Andres told Judge T.S. Ellis III. “We have every intention of calling him.” Judge Ellis responded that “of course” the government was going to put Mr. Gates on the stand. “You can’t prove conspiracy without that,” he said of Mr. Gates’ testimony. Mr. Gates is expected to take the stand Friday or Monday. On Wednesday, prosecutor Uzo Asonye said Mr. Gates may or may not testify, surprising some in the court room. Mr. Gates is the government’s star witness against Mr. Manafort. The conversation Thursday occurred before the jury was brought into the courtroom. Mr. Andres complained the jury heard Wednesday’s admonishment from Judge Ellis that Mr. Gates may not testify. “I’m not the one who said it,” Judge Ellis said of the disclosure that Mr. Gates may not be called to the stand. Sign up for Daily Newsletters Manage Newsletters Copyright © 2021 The Washington Times, LLC. Click here for reprint permission.<doc-sep>
(CNN) — Rick Gates, the key prosecution witness in the tax and fraud trial of former Trump campaign chairman Paul Manafort, testified Monday he had committed crimes alongside and at the direction of his former partner – and had also stolen from Manafort himself. In stunning testimony, Gates stated he and Manafort had 15 foreign accounts they did not report to the federal government, and knew it was illegal. Gates said he did not submit the required forms “at Mr. Manafort’s direction.” Gates then admitted that he also turned the tables on Manafort – cheating him out of “several hundred thousand” dollars by submitting false expense reports that were paid out of some of the undisclosed foreign bank accounts in Cyprus. The testimony from Gates, a former adviser to Donald Trump, comes after reaching a plea deal with special counsel Robert Mueller earlier this year to testify against his former partner in a lucrative international political consulting firm. Manafort stared directly at Gates as he read aloud the details of his plea agreement, which could see him receive a reduced sentence, at the direction of a prosecution lawyer. Gates did not make eye contact with Manafort as he took the stand wearing a yellow tie and navy blue suit. Offering evidence against his former partner, Gates described how the two men worked in Ukraine for former pro-Russian President Viktor Yanukovych, and how Yanukovych’s backers moved money from their accounts in Cyprus to Manafort. He called the veteran Republican operative “one of the most politically brilliant strategists I’ve ever worked with.” Prosecutors allege that Manafort financed a lavish lifestyle featuring sumptuous residences and extravagant wardrobes by using millions of dollars in profits that he hid from tax authorities then turned to bank fraud when his income started to dry up. Manafort has pleaded not guilty to all charges. Gates outlines false expense reports, financial crimes The defense in the case is likely to subject Gates to an intensive cross-examination after arguing during opening statements that he embezzled millions of dollars from Manafort and then turned against him under pressure from Mueller. Gates told the jury that as part of his plea with prosecutors, he revealed several other crimes that were not previously known and that were not included in the federal indictments against him and Manafort. Aside from admitting to the false expense reports, Gates said he also created a fake letter to an investment company for a different colleague, Steve Brown. He also over-reported his income on mortgage and credit card applications and lied to his own personal tax accountant. Gates also said he lied in a lawsuit deposition years ago, after Manafort “asked me not to include” certain things in the deposition. As prosecutors sought to frame their narrative about Manafort’s alleged fraud, Gates described how their firm did campaign work for Cypriot politician Kypros Chrysostomides, who was referred to as “Dr K” in court. Bank accounts they set up on the Mediterranean island came in useful when Manafort worked for Ukrainian politicians as they allowed their billionaire oligarchs backing their campaigns in Ukraine to pay millions of dollars for his services, Gates said. “I was the one who helped organize the paperwork and initiate the wire transfers,” Gates testified. As well as serving as Manafort’s right-hand man in their multimillion-dollar business, Gates was also Manafort’s deputy on the Trump campaign. His appearance represents the biggest test yet for Mueller’s investigation even though this case does not directly play into the issue of alleged cooperation by the Trump campaign in Russian election interference. The President is watching proceedings carefully as Mueller appears to be moving closer to his inner circle on multiple fronts and has complained that Manafort has been treated like a mobster – even as the White House has tried to open up some distance between Trump and his former campaign chairman. RELATED: Swamp on trial: Why people are hooked on the Manafort case Monday’s court proceedings began with Manafort’s accountant Cindy Laporta completing her testimony. Last week, she said that Manafort asked her to falsify numbers related to his company’s profits. Other bookkeepers who worked with Manafort testified that he was intimately involved in all his financial dealings. There was also testimony Monday from Paula Liss, a senior special agent with the Treasury Department’s Financial Crimes Enforcement Network, who said neither Manafort nor his wife filed paperwork declaring a financial interest or control over a foreign bank account between 2011 and 2014.