As it happenedended1533751757

Manafort trial - live updates: Rick Gates claims political consultant Konstantin Kilmnik controlled hidden overseas accounts

Trial enters second week and Rick Gates takes the stand 

Andrew Buncombe
New York
Monday 06 August 2018 23:21
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Ex-Trump Campaign Chair Manafort's Court Arrival

Rick Gates, a longtime business associate of Donald Trump's former campaign chairman Paul Manafort, on Monday testified at trial that he helped Manafort file false tax returns and hide his foreign bank accounts.

Mr Gates is expected to be the government's star witness in its case against Mr Manafort. Mr Gates, who also served on Mr Trump's campaign, pleaded guilty in February and agreed to cooperate with prosecutors under a deal that could lead to a reduced sentence.

Taking the stand on the trial's fifth day, Mr Gates admitted to helping Mr Manafort doctor financial statements, hide sources of foreign income, mislead banks to get loans and cheat on his U.S. taxes. He said he did so at Mr Manafort's direction.

“At Mr. Manafort's request we did not disclose foreign bank accounts,” Mr Gates told the jury in federal court in Alexandria, Virginia, describing their relationship of two decades as limited to business. “Outside of business we did not socialise.”

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Mr Manafort's attorneys have signalled they will seek to blame Gates and have accused him of embezzling millions of dollars from Mr Manafort. Mr Gates has been described by witnesses as Mr Manafort's right-hand man who helped run the operations of a multimillion-dollar political consulting business.

In addition to assisting in Mr Manafort's alleged crimes, Mr Gates told the jury he had failed to report his own income routed through bank accounts in the United Kingdom and stole several hundreds of thousands of dollars from Mr Manafort by filing false and inflated expense reports related to their work in Ukraine.

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 but were the first to go to trial arising from Special Counsel Robert Mueller's investigation into Russian interference in the 2016 US election.

The jury has heard how Mr Manafort made tens of millions of dollars for work with pro-Russian politicians in Ukraine. Mr Mueller is also investigating possible coordination between Trump campaign members and Russian officials in the election campaign, but the charges against Mr Manafort do not address that.

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

Mr Gates said an associate, Konstantin Kilimnik, had control over the overseas accounts. Mr Kilimnik is a Russian-Ukrainian political consultant who was indicted in June on charges stemming from the Mueller probe. In court filings Mueller has accused Mr Kilimnik of having current ties to Russian intelligence services - an allegation he has denied.

Mr Gates testified that Mr Manafort directed him to report overseas income as loans in order to lower taxable income - an allegation prosecutors have been eliciting testimony about from witnesses since last week.

Reuters

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Hello and welcome to our latest coverage of Paul Manafort's bank fraud trial.

Steve Anderson6 August 2018 16:18
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On Friday, the trial heard testimony from accountant Cynthia Laporta, who described how Mr Manafort and longtime business associate Rick 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. 

Ms Laporta's testimony has raised the stakes for Mr Manafort, legal experts said. Testifying under immunity, she was the first witness to admit she knew accounting requests from Mr  Manafort and Mr Gates were wrong and could be crimes. 

Steve Anderson6 August 2018 16:24
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On Monday, the defense will begin with their cross examination of Cynthia Laporta.

Steve Anderson6 August 2018 16:26
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But the real star draw this week, and as early as today, is expected to be the testimony of long-time Manafort associate Rick Gates.

Steve Anderson6 August 2018 16:28
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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.

Steve Anderson6 August 2018 16:29
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The trial is set to re-open in about 90 minutes.

Steve Anderson6 August 2018 16:29
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Here is more on the importance of Mr gates to the trial, from the Washington Post. It will be worth reading as we wait for the trial to re-start.

Steve Anderson6 August 2018 17:06
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As was the case during the first week of the trial, US District Judge TS Ellis III will no doubt be both referee and wild card.

He has played those roles throughout the trial, repeatedly scolding prosecutors to rein in their depictions of Mr Manafort's lavish lifestyle and demanding that they “move it along.” It is not a crime, he has said several times, to be rich and to spend ostentatiously. 

Steve Anderson6 August 2018 17:56
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Rick Gates’s testimony could be critical to the prosecution’s bid to show Mr Manafort acted intentionally to deceive banks and the Internal Revene Service (IRS). But it will be equally important for Mr Manafort’s defence, which has alleged Mr Gates was the one to engineer the fraud of which Mr Manafort is accused - because he was embezzling money from Mr Manafort’s company and trying to cover his tracks.

Steve Anderson6 August 2018 18:12
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There has been another hint that Rick Gates may be testifying today. A representative from Special Counsel’s Robert Mueller's office has brought a stack of boxes into the courtroom. Two of the boxes are labeled “Gates.”

Steve Anderson6 August 2018 18:38

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