Rick Gates takes the witness stand at Paul Manafort’s tax, fraud trial

Frederick Owens
August 7, 2018

And there was a reason why prosecutors wanted Gates to paint himself in such a negative light on the witness stand: they wanted to get everything out in the open and demonstrate that at this point, Gates is hiding nothing and is coming clean about his crimes.

Gates, 46, as part of his plea deal, pleaded guilty to lying to federal authorities and conspiracy to commit fraud, which could carry up to six years in prison.

Critical testimony expected at the trial of President Trump's former campaign chair as Manafort's right-hand man set to take the stand as early as Monday; reaction and analysis from James Trusty, former Justice Department prosecutor.

"Rick Gates had his hand in the cookie jar and couldn't let his boss find out", Manafort defense attorney Thomas Zehnle said during opening arguments.

"Mr. Manafort requested I make wire transfers from the foreign accounts", Gates said. Gates said he spoke to LaPorta about listing the property as a residence.

Since the trial started before US District Judge T.S. Ellis last Tuesday, Mr Manafort's lawyers have kept their cross-examinations brief and at times refrained from attempting to rebut damaging testimony in detail.

Not once did he let his eyes wander to the defense table, where Manafort sat, arms crossed, staring at his former protégé as he testified against him. The usually bearded Gates appeared in court clean-shaven on Monday. By that standard, Ellis told the court, Charles Koch and George Soros would be considered oligarchs.

Prosecutors have not even cracked into the 23 emails between just Manafort and Gates that have been entered into the potential evidence list.

Special counsel Robert Mueller's team indicated it expects to question Gates for three more hours on Tuesday before the defense team will get its chance to grill him.

During opening arguments last week, the defense team made it clear they intend to blame Gates, who handled some day-to-day business operations for Manafort, for numerous alleged reporting deficiencies Manafort is charged with.

Gates also admitted he embezzled money from his boss - something Manafort's attorneys have alleged for months.

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He then described having "cheated" Manafort out of "several hundred thousand dollars" by submitting fabricated expense reports.

That's but a drop in the ocean of the roughly $30 million prosecutors are claiming Manafort hid from the IRS.

Some of the manoeuvres were at the request of Gates, while others implicated Manafort, Laporta testified.

On Friday, a tax preparer named Cindy Laporta admitted that she helped disguise $900,000 in foreign income as a loan to reduce Manafort's tax burden.

He added he didn't receive any personal benefit for falsifying Manafort's loan applications.

Prosecutors allege he dodged taxes on millions of dollars he made from his work for a Russia-friendly Ukrainian political party. Ellis overruled the objection.

Gates said an associate, Konstantin Klimnik, had control over the overseas accounts. But she noted that she couldn't imagine a scenario where she would have learned Gates was doing that.

Under cross examination, she said at the time she believed Manafort was directing Gates' actions and "knew what was going on".

So far, that testimony has provided jurors with a damning account.

That's because she was what's called a "summary witness", which is a person, usually a government official, who is called to testify about facts and records they have tracked down. It is unclear what other information he may have provided to Mueller's team.

Gates also testified that he helped Manafort provide old documents to Citizen's Bank in order to hide the fact that Manafort had a mortgage on his Brooklyn property. Manafort has pleaded not guilty to all charges.

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