Longtime Manafort deputy Rick Gates admits embezzlement

Rick Gates leaves federal court in Washington. Paul Manafort’s trial opened this week with a display of his opulent lifestyle and testimony about what prosecutors say were years of financial deception. But the

Rick Gates Set to Testify Against Ex-Boss Paul Manafort

The government's star witness took the stand Monday in the bank fraud and tax evasion trial of Paul Manafort, the onetime chairman of the Trump presidential campaign.

Paul Manafort's ongoing trial in Virginia, on charges that include bank and tax fraud, may be a sideshow to Special Counsel Robert Mueller's larger Russian Federation investigation, but it produced a pretty compelling moment of courtroom drama on Monday.

Prosecutors are trying to craft a narrative through the various vendors, bookkeepers, and accountants who have testified that Manafort, through Gates, directed his own illicit transactions.

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.

Taking the stand on the trial's fifth day, Gates admitted to helping Manafort doctor financial statements, hide sources of foreign income, mislead banks to get loans and cheat on his US taxes. He told the court he embezzled hundreds of thousands of dollars from his boss.

Downing also attempted to show that Gates was the point person in dealing with the accountants.

Two documents could prove troublesome for Manafort, 69.

Prosecutors say Manafort used those companies to stash millions of dollars from his Ukrainian consulting work, proceeds he omitted year-after-year from his income tax returns.

Prosecutors on Monday went through a list of overseas corporations and Gates testified that all of them were controlled by Manafort and contained income earned by his political consulting work.

Mr Manafort's attorneys signalled they would seek to blame Mr Gates and had accused him of embezzling millions of dollars from Mr Manafort. When Robert Mueller began investigating Russian interference past 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, clean-shaven for his first public appearance since his guilty plea, did not look at his former boss, though Manafort followed his every step and answer.

But Manafort's defense team is expected to use Gates, too. In questioning Laporta on Monday, a prosecutor asked the accountant about a $10 million loan purportedly received by Manafort from Russian businessman Oleg Deripaska in 2006.

Manafort attorney Kevin Downing says that Rick Gates will testify at the conclusion of the testimony of Manafort's tax preparer. He noted that, as is common with cooperating witnesses, Gates testified to a wide array of crimes - including some that the government hadn't known about prior to his cooperation - and even minor violations, like showing up for parole 15 minutes lates.

In a court filing on Monday, prosecutors said they may call Federal Bureau of Investigation forensic accountants Morgan Magionos and Renee Michael to read from Manafort's emails.

Notably, after urging prosecutors to speed things along as jurors heard from 14 witnesses last week, U.S. District Judge T.S. Ellis III said late on August 3 that Downing could begin his questioning of Laporta on Monday and wouldn't rush him.

Laporta, looking at a summary of loans to Manafort and his businesses, said she could not see any indication that the loan from Deripaska had been paid off. One accounting trick saved Manafort $500,000 in taxes, she said.

Under cross-examination, she said at the time she believed Manafort was directing Gates' actions and "knew what was going on". Without smiling or pausing, he told the jury he had knowingly committed crimes "at Mr. Manafort's direction".

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