Manafort's right-hand man testifies against him in tax fraud case

ALEXANDRIA, Va. (Reuters) - Rick Gates, a longtime business associate of U.S. President Donald Trump’s former campaign chairman Paul Manafort, on Monday testified that he helped Manafort file false tax returns and hide his foreign bank accounts.

Gates is the government’s star witness in its case against Manafort, who is accused of bank and tax fraud. Gates, who also served on 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, Gates admitted to helping Manafort doctor financial statements, hide foreign income and cheat on his taxes. He said he was aware Manafort was acting as an unregistered foreign agent in lobbying for Ukraine. He said he engaged in the wrongdoing at Manafort’s direction. 

“At Mr. Manafort’s request we did not disclose foreign bank accounts,” Gates told the jury in federal court in Alexandria, Virginia. 

SPONSORED

Manafort’s defense hinges on pinning the blame on Gates, who they accuse of embezzling millions of dollars from Manafort. 

Gates, who first met Manafort working for him as an intern fresh out of college, has been described by witnesses as Manafort’s right-hand man in his multimillion-dollar political consulting business. 

Throughout his testimony, Gates largely avoided making eye contact with Manafort, who appeared to be watching him. 

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

Those admissions are likely to become a focal point for Manafort’s defense team when he is cross examined on Tuesday.


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. His case is the first to go to trial arising from Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 U.S. election. 

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

CYPRUS ACCOUNTS 

Gates also testified about how wealthy Ukrainian businessmen paid Manafort millions of dollars for his political services through wire transfers to Cyprus-based accounts that were set up for Manafort by a lawyer and local politician known as “Dr. K.” 

“He indicated that the Ukrainian businessmen...had directed him to set up Cyprus accounts because the payments would be coming from Cyprus,” Gates said when asked to explain the payment structure. 


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