Drama grips court as Manafort lawyers accuse Rick Gates of multiple affairs

Getty Images  TPM Illustration

Getty Images TPM Illustration

"If it doesn't say Men's Warehouse, then I don't know it", Ellis said after learning the pronunciation of the "House of Bijan", where Manafort bought some particularly high-end goods. U.S. District court Judge T.S. Ellis III presides. After a sidebar with the judge, Downing moved onto another topic. Both sides agreed ahead of time to limit discussion of the campaign so as not to prejudice the jury, though they had agreed to allow testimony about the overlap of a bank loan with Manafort's role in the campaign.

Those who dealt with Manafort's taxes also testified that even though they asked Manafort whether he maintained any bank accounts overseas, he told them no.

Gates, who pleaded guilty to charges in February and is co-operating for the possibility of a reduced sentence, testified that he helped Manafort falsify his tax returns, lie to banks to get loans and hide foreign bank accounts. In a heated moment under cross examination by attorney Kevin Downing, Gates acknowledged that it is "possible" he submitted personal expenses for reimbursement from the committee.

The questioning of Paul Manafort's protege during the political consultant's financial fraud trial has turned confrontational and personal, focusing on Rick Gates' own crimes as well as an extramarital affair and a plea agreement. There have been exceptions, like when Gates said that he might have also embezzled from the Trump inauguration committee by inflating his expenses, and when he testified about how Manafort reached out to talk about securing a banker who loaned him money tickets to the inauguration and potentially a position in the administration. They have tried several times to impugn his credibility before the jury.

In detailed testimony, Gates has walked prosecutors through the step-by-step process on how he and Manafort doctored and backdated documents.

Gates testified that he engaged in an extensive criminal conspiracy with Manafort that lasted seven years and included lying to the Internal Revenue Service to avoid paying taxes and providing false documents to banks to obtains millions of dollars in loans. Gates said he was responsible for collecting all relevant documents for the loan applications.

Gates said he and Manafort created an elaborate operation in Cyprus to use shell companies to secretly accept the money. Gates also provided the first witness testimony that overlaps with Trump's presidential campaign. Gates, a longtime business partner of Manafort, had been working on the incoming president's transition team. But Gates pleaded guilty months later and agreed to cooperate in Mueller's investigation of Manafort, the only American charged by the special counsel to opt for trial instead of a guilty plea. But Trump has shown interest in the proceedings, tweeting support for Manafort.

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Downing seized on those admissions to try and cast doubt on whether the jury can trust Gates' claims that he only carried out the fraud alleged by prosecutors at Manafort's behest. Manafort's lawyers on Wednesday tried to further malign Gates as a witness by suggesting Gates lied about the number of extramarital affairs he's had.

In December 2016, Manafort sent an "urgent" email to Gates including Calk and Calk's son on a list of people Manafort wanted to receive invitations to Trump's inauguration.

In one email, Manafort wrote "WTF" and "not happy" about tax payments he was going to have to make, Gates said.

IRS agent Michael Welch said in federal court in Alexandria, Virginia that Manafort received $15.5 million from Ukraine which he then used to pay for clothes, homes and landscaping between 2010 and 2014. Courtroom illustration courtesy of Bill Hennessy.

Manafort's defense team's primary strategy has been to pin much of the blame for financial crimes on Gates, and some observers felt Downing made some headway toward that goal on Tuesday.

The prosecution's case against Manafort doesn't rest exclusively on Gates. Gates said the man schooled them on how to shield their operations from scrutiny by tax collectors.

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