The most critical moment in the financial fraud trial of former Donald Trump campaign chairman Paul Manafort will arrive this week with the testimony of his “right-hand man” — the person the defenceis seeking to blame for any crimes.
Rick Gates, who also served in a senior role in President Trump's campaign, has been a key cooperator for Special Counsel Robert Mueller's team as part of their investigation into Russia election meddling and any possible collusion with Mr Trump's campaign team. Mr Gates agreed a plea deal earlier this year, admitting to two felony charges. However, when he testifies it will be the first time he will detail those crimes face-to-face with his former boss and mentor.
The trial, set to resume on Monday afternoon in federal court in Alexandria, Virginia, is the first of Mr Mueller's prosecutions to reach a jury. But lawyers have made no mention of Mr Trump or possible campaign coordination with the Kremlin, the central question behind the special counsel's investigation.
Prosecutors allege that Mr Manafort used off-shore companies to stash millions of dollars from political consulting work in Ukraine, proceeds he omitted year-after-year from his income tax returns. Later, they say, when that income dwindled, Mr Manafort launched a different scheme, shoring up his struggling finances by using doctored documents to obtain millions more in bank loans. Mr Manafort denies all the charges against him.
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Mr Gates was asked to review several emails between Mr Manafort and Ukranian political officials and businessmen, which were displayed for jurors.
Mr Gates testified the operatives in Ukraine paid Mr Manafort millions of dollars for political and policy work by wiring money from their companies in Cyprus to Mr Manafort’s unreported foreign bank account in Cyprus.
At times, Mr Gates testified Mr Manafort would move money from Cyprus to his US accounts.
Judge Ellis told prosecutor Greg Andres he was looking for ways to “expedite.” Mr Andres responded, “We’re doing everything we can to move the trial along.” The dispute seemed to die for a moment, but later, as Mr Andres asked questions about Gates’s work overseas, Judge Ellis again grew irritated.
“We need to focus sharply,” Judge Ellis told the prosecutor. Mr Andres tried to explain his line of inquiry.
“Next question,” the judge snapped.
“The government…” Mr Andres started to say.
“Next question,” Mr Ellis snapped again, his voice rising.
Late in the afternoon Monday, prosecutors sparred notably with Judge TS Ellis III over the pace of the case.
The heated confrontation came as prosecutors attempted to enter into evidence Rick Gates’s passport to show details of his travels to Ukraine and Cyprus. Judge Ellis interrupted them.
“Let’s get to the heart of the matter,” he scowled.
Paul Manafort's attorneys have signalled they will seek to blame Rick Gates and have accused him of embezzling millions of dollars from Mr Manafort. The pair have known each other for two decades and ran a multimillion-dollar political consulting business. Mr Gates also worked for Donald Trump's election campaign.
Mr Gates told the jury that as part of his plea with the government, he revealed several other crimes that were not previously known and are not in the federal indictments of him and Mr Manafort.
Mr Gates said he stole the money from Mr Manafort by submitting to him false expense reports.
Those expenses paid to him came out of the foreign bank accounts in Cyprus that Mr Gates testified that he and Mr Manafort knowingly did not disclose to the federal government.
"We did not submit the required form designating he had control over an offshore account," Mr Gates told the jury. When prosecutor Greg Andres asked why, Mr Gates replied: "At Mr. Manafort's direction."
Mr Gates also testified he and Paul Manafort knew it was a crime because they had been notified by Mr Manafort's accountants in emails.
Mr Gates also testified on Monday that he stole money from former Trump campaign chairman Mr Manafort.
Mr Gates, a former business partner of Manafort's, also testified that Manafort had asked him to omit information in a court deposition regarding a private equity fund.
On Monday the defence team will cross-examine an accountant who testified that she helped Manafort to prepare fraudulent tax returns.
The jury heard testimony on Friday from Cynthia Laporta, who described how Mr Manafort and longtime Mr Gates allegedly doctored financial statements and backdated loans.
Mr Manafort has pleaded not guilty to 18 counts of bank and tax fraud and failing to disclose foreign bank accounts. The charges largely predate his five months on the Trump campaign.
Since the trial started on Tuesday, Mr Manafort's lawyers have kept their cross-examinations brief and at times shied from addressing seemingly damaging testimony in detail.
But Ms Laporta's testimony raised the stakes for Manafort, legal experts said. Testifying under immunity, she was the first witness to admit she knew accounting manoeuvres Mr Manafort and Mr Gates allegedly requested of her were wrong and could be crimes.
Judge TS Ellis told Mr Manafort's lawyers on Friday they could ask about Ms Laporta's immunity agreement. “You're entitled to go into that in any detail you want to,” he said.
Ms Laporta was the 14th witness called by Mr Mueller's team. The charges against Mr Manafort do not address election collusion, although a second trial set for September in Washington could reveal new information on that issue.
Additional reporting by AP and Reuters
