Gates testifies that he embezzled money

Clay Curtis
August 7, 2018

Former Trump campaign manager Paul Manafort's ex-business partner has taken the stand against him in his trial on bank and tax fraud charges.

Rick Gates has been regarded as a crucial witness for the government ever since he pleaded guilty this year to two felony charges and agreed to co-operate in special counsel Robert Mueller's investigation into possible ties between Russian Federation and the Trump campaign.

Russia If You're ListeningPaul Manafort: The dictator's fixerIn four years Paul Manafort went from making millions of dollars in Ukraine, to running the Trump campaign, to jail.

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.

While Gates already pleaded guilty to charges of conspiracy against the United States and lying to the FBI, Monday's testimony marked his first time stating he committed crimes with another former Trump associate.

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.

Two documents could prove troublesome for Manafort, 69. Among the tax charges Manafort is facing in Virginia is failure to report the foreign bank accounts.

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The jury has heard how Manafort made tens of millions of dollars for political work with pro-Russian politicians in Ukraine. For instance, on Monday, after federal financial crimes specialist Paula Liss testified that neither Manafort nor his wife had reported foreign bank accounts to her agency, FinCEN, defense attorney Tom Zehnle asked her if a person owning less than 51 percent of a company would need to report those accounts. When Robert Mueller began investigating Russian interference previous year, Manafort's questionable lobbying work - the sort of activity that has historically rarely been investigated in Washington - was put under a microscope, exposing him and his associates.

Gates is testifying as part of a plea agreement with the government.

Gates, a longtime business associate of Manafort's, was indicted on fraud charges in October but later pleaded guilty to reduced charges as part of a plea deal.

Gates said that Manafort had indicated to him that the Ukrainian businessmen who were funding their consulting work had directed him to set up the accounts in Cyprus, where they also had bank accounts.

An attorney for Manafort, Kevin Downing, let it slip earlier in the afternoon that Gates would testify on Monday, intensifying the tension in the courtroom.

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.

But she said she was under the impression that Mr Manafort had been directing his deputies' actions and "knew what was going on". Laporta, who testified under an immunity deal with the government, acknowledged that she agreed under pressure from Gates to alter a tax document for one of Manafort's businesses. Laporta said she didn't believe the loan had actually been forgiven. Without smiling or pausing, he told the jury he had knowingly committed crimes "at Mr. Manafort's direction".

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