(Dana Verkouteren via AP)

Star Witness Against Manafort Concludes Testimony

Defense portrays Rick Gates as liar, adulterer

August 08, 2018 - 12:18 pm
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By CHAD DAY, STEPHEN BRAUN and ERIC TUCKER ,  Associated Press

 

ALEXANDRIA, Va. (AP) — Paul Manafort's protégé on Wednesday wrapped up his testimony aimed at implicating the former Trump campaign chairman in financial crimes while also enduring stinging attacks on his character and credibility.

Rick Gates has been the government's star witness in Manafort's financial fraud trial, testifying how at the behest of his longtime boss, he helped conceal millions of dollars in foreign income and submitted fake mortgage and tax documents.

Defense lawyers saw an opening to undermine his testimony by painting him as liar and a philanderer, getting him to admit to an extramarital affair and reminding jurors how he had lied to special counsel Robert Mueller's team while working out a plea deal for himself.

The testimony, stretching across three days, created an extraordinary courtroom showdown between the two former Trump campaign aides who were indicted together by Mueller but who have since opted for radically different strategies: Manafort is the lone American charged by Mueller to opt for trial, whereas Gates pleaded guilty and agreed to cooperate by testifying against his former boss.

Gates endured a challenging cross-examination that focused on his admitted embezzlement from Manafort, an extramarital affair and a guilty plea that may spare him severe punishment.

"After all the lies you've told and the fraud you've committed, you expect this jury to believe you?" Manafort lawyer Kevin Downing asked incredulously at one point.

On Wednesday, Downing sought to counter earlier testimony that Manafort had encouraged Gates to deceive authorities by getting Gates to acknowledge that Manafort told him to be truthful about offshore shell companies and bank accounts during a 2014 interview with the FBI.

The interview was part of an FBI investigation that sought to recover assets looted from the Ukrainian government under the rule of former President Viktor Yanukovych.

Gates said under questioning Wednesday that he told FBI agents and Justice Department lawyers about some of the offshore companies that contained millions of dollars in proceeds from their Ukrainian political work.

But prosecutor Greg Andres followed up by suggesting that Gates and Manafort were not fully truthful.

"Did you tell the FBI that there was hidden income in those accounts?" Andres asked.

"No, I did not," Gates responded.

Prosecutors had braced for the tough questioning by getting Gates to come clean about his own crimes. He told jurors how he disguised millions of dollars in foreign income as loans in order to lower Manafort's tax bill. Gates recounted how he and Manafort used more than a dozen offshore shell companies and bank accounts in Cyprus to funnel the money, all while concealing the accounts and the income from the IRS.

But the grilling got more intense, and personal, Tuesday afternoon when Downing pressed Gates about a "secret life" he said was funded by embezzlement, including an extramarital affair that Gates himself acknowledged. Gates also said he may have submitted personal expenses for reimbursement by Trump's inaugural committee, which he helped operate.

Gates implicated himself in broad criminal conduct on the stand, an apparent strategic decision by prosecutors to take some of the steam out of defense questioning. He told jurors he embezzled from Manafort by filing false expense reports. He also said he committed credit card and mortgage fraud, falsified a letter for a colleague involved in an investment deal and made false statements in a deposition at Manafort's direction.

Manafort and Gates were the first two people indicted in Mueller's investigation into potential ties between Russia and the Trump campaign. The case has little to do with either man's work for the Trump campaign and there's been no discussion during the trial about whether the Trump team coordinated with Russia — the central question Mueller's investigators have tried to answer. But Trump has shown interest in the proceedings, tweeting support for Manafort.

On Tuesday, Gates did connect one part of the bank fraud charges against Manafort to his role in the Trump campaign.

He said Manafort asked for tickets to Trump's inauguration so he could give them to a banker involved in approving a loan at the center of his financial fraud trial. Gates also said Manafort floated banker Stephen Calk's name for consideration as secretary of the Army, a post he ultimately did not get. The email exchange occurred after Manafort left the Trump campaign but while Gates was active on the Trump inauguration committee.

Gates described to jurors how he repeatedly submitted fake financial documents at Manafort's behest as his former boss became concerned he was paying too much in taxes and, later, that his funds were drying up.

"WTF," Manafort wrote to Gates in one email shown to the jury. "How could I be blindsided like this. You told me you were on top of this. We need to discuss options. This is a disaster."

In other testimony, Gates recounted how he converted a PDF of a profit-and-loss statement to a Microsoft Word document so he could doctor it to inflate the business income. Gates also fabricated a forgiveness letter for what he said was already a fake loan between Manafort's consulting company and a Cypriot entity he controlled.

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Associated Press writer Matthew Barakat contributed to this report.

 

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