AP reporter Chad Day highlights the first week of the Paul Manafort trial, which saw one of Manafort’s tax preparers admit that she helped disguise $900,000 in foreign income as a loan in order to reduce his tax burden. (Aug. 3)
ALEXANDRIA, Va. – Paul Manafort’s former business partner told a federal court jury that he engaged in a seven-year criminal conspiracy with his former boss in which he assisted in filing false tax returns, failed to disclose multiple foreign bank accounts and provided phony documents to banks to acquire millions of dollars in loans.
Testifying during the trial of the former Trump campaign chairman, who is accused of tax and bank fraud, Gates said he helped maintain secret accounts in Cyprus, the Grenadines and the United Kingdom.
At Manafort’s direction, Gates testified, he did not disclose the accounts to his accountants or federal tax authorities.
Gates, who pleaded guilty to conspiracy and lying to the FBI this year, acknowledged his own criminal activity in open court as Manafort sat a few feet away at the defense table.
Manafort’s attorneys went on the attack earlier Monday, asserting that Gates directed accountants to falsify Manafort’s tax returns because he had “embezzled millions of dollars” from their consulting firm.
Manafort attorney Kevin Downing told U.S. District Judge T.S.Ellis III that he intended to present evidence of the embezzlement during questioning of a Manafort accountant who testified last week that she knowingly filed false tax returns on Manafort’s behalf.
Monday, Cynthia Laporta, who was provided immunity against prosecution in exchange for her testimony, told a federal court jury that Gates often provided late or incomplete information when she requested additional material for the preparation of Manafort’s business and personal returns.
“It was difficult to follow,” Laporta said of Manafort’s financial operations. “I relied on Rick Gates. … The information I had was his representation.”
As part of his plea agreement with the government, Gates said he agreed to cooperate with prosecutors during their prosecution of Manafort, adding that he had provided investigators with documents, emails and text messages documenting years of interactions with Manafort.
Gates could face up to 71 months in prison at sentencing.
Among his actions on behalf of Manafort, Gates said, he characterized hundreds of thousands of dollars in income as loans to reduce Manafort’s tax liability and pushed accountants to reclassify some loans as income to qualify for loans or seek more favorable lending rates.
Gates, who answered rapid-fire questions from prosecutor Greg Andres in a low monotone, acknowledged padding his own expense accounts without Manafort’s knowledge, siphoning “several hundred thousand” dollars from the secret accounts.
The siphoned money, Gates said, was directed to his own account in the United Kingdom and was never disclosed to his own accountants or the government.
The last time Gates appeared in a courtroom, he arrived on a dreary day in February and left quickly after entering a guilty plea and pledging his cooperation with the government.
Monday, the witness arrived just after 4:15 p.m., and his stay wasn’t so brief. The government was likely to question Gates for up to three more hours Tuesday.
Andres, the prosecutor, walked Gates through the web of foreign accounts that Manafort allegedly used to finance a life of extravagance – clothes, cars and homes.
Last week, haberdashers, construction contractors, a real estate agent and a Mercedes-Benz car dealer all testified that their bills – representing millions of dollars – were paid with international transfers wired from Manafort’s accounts.
Gates told the jury that he remained in near constant contact with Manafort over the years. They sometimes talked multiple times a day, met in person, exchanged emails and texts.
“Mr. Manafort requested during the year that we did not disclose foreign bank accounts,” Gates testified.
Early in his testimony, Gates detailed the terms of his own plea agreement, including the scope of the alleged international conspiracy with Manafort.
Jurors, who heard frequent references to Gates in the previous week of testimony, appeared to be riveted by the former political operative’s live testimony.
A packed courtroom gallery – along with a crowd in an overflow courtroom three floors below where a closed-circuit broadcast is beamed – watched in silence.
Gates never broke eye contact with the prosecutor during his testimony, even as Manafort locked his sights on the witness.
During a brief break, as the lawyers huddled at the bench with the judge, Manafort continued to watch his former associate who spent the time flipping the pages of a thick binder containing government exhibits, including copies of their prior correspondence.
The case against Manafort – 18 criminal counts of tax evasion, bank fraud and conspiracy – is the first to be tried by special counsel Robert Mueller and focuses on Manafort’s business dealings. It doesn’t directly have to do with Manafort’s work for Donald Trump’s presidential campaign.
Gates, who served as a deputy to Manafort on Trump’s campaign team, did not directly refer to his work for Trump.
Asked by Andres to provide an accounting of his previous posts, Gates, 46, told the jury only that he worked on a presidential campaign.
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