Richard Gates, the longtime business associate of former Trump campaign chairman Paul Manafort, testified under oath in court Monday that he helped Manafort file fraudulent tax returns and conceal overseas accounts.
“Did you commit crimes with Mr. Manafort?” prosecutor Greg Andres asked Gates, who took his place in the witness box shortly before 4 p.m. on the fifth day of the criminal trial against his former boss.
“Yes,” Gates replied.
Testimony from the prosecution’s star witness came at the start of the second week in the criminal trial against Manafort, the first courtroom test of special counsel Robert Mueller’s Russia investigation.
Federal prosecutors allege Manafort concealed millions of dollars from the IRS for work he did as a political consultant and lobbyist for pro-Russia officials in the Ukraine. They say he hid his income in overseas accounts in order to maintain a life of luxury.
Gates, who pleaded guilty in February as part of a deal with Mueller’s team, said he and Manafort knowingly failed to report foreign bank accounts, and that the two conspired to falsify Manafort’s tax returns. He worked with Manafort for about a decade.
When Andres asked why he had lied to accountants about the existence of foreign accounts, Gates said Manafort had asked him at different points over the years not to disclose them.
Gates pleaded guilty earlier this year to reduced charges of conspiring against the U.S. and making a false statement to federal officials. The special counsel has also secured guilty pleas from former Trump national security adviser Michael Flynn and former Trump campaign adviser George Papadopoulos.
On the stand, Gates said that because of his cooperation with government prosecutors he could spend fewer than five years in prison, instead of five to 10 years. But he also said new charges could be filed against him if he violates his plea agreement by lying under oath.
Monday’s testimony marked the first time Gates has stated under oath that he committed crimes with another former Trump campaign associate.
He also admitted that he stole money from Manafort by falsifying expense reports.
Defense attorneys revealed during last week’s opening statements that they plan to pin Manafort’s alleged wrongdoings on Gates, saying Manafort misplaced his trust in a longtime business associate who he later learned had his “hand in the cookie jar.”
During the prosecution’s questioning, Andres asked Gates how much he stole from Manafort. Gates said he didn’t have an exact figure but that it was “several hundred thousand” dollars.
The defense is likely to hammer Gates on the stolen funds when the trial resumes Tuesday morning. Andres told Judge T.S. Ellis he expects to question Gates for another three hours. The defense will then have the opportunity to cross-examine.
Gates is considered the prosecution’s key witness because of his deep ties to Manafort and his work on the Trump campaign.
Manafort mouthed a quick kiss to his wife Kathleen when he entered the courtroom for Monday’s proceedings, which began at 1:30 p.m. after Ellis gave the jury the morning off.
Ellis has been tough on the prosecution throughout the trial, repeatedly questioning the relevance of evidence and pushing government attorneys to quicken their pace when questioning witnesses. But one of the most contentious moments so far came on Monday after the jury had been dismissed for the day.
Before adjourning for the night, Ellis went head-to-head with Andres over the relevance of asking Gates about the billionaire businessmen who were funding the political campaigns Manafort worked on in the Ukraine.
Andres referred to the businessmen as oligarchs, saying the government allowed them to run monopolies over segments of the Ukrainian economy in exchange for financial backing.
Ellis, who instructed attorneys last week to find another term for oligarch because he felt it was pejorative, said it “doesn’t matter whether these are good people, bad people, oligarchs, crooks, the mafia, whatever.” He said prosecutors only have to prove that Manafort failed to report income on his tax returns.
“It proves the flow of money,” Andres protested, saying it’s the very type of evidence Ellis has requested when repeatedly interrupting the prosecution.
“The record reflects I have rarely stopped you in this case,” Ellis said.
“I stand by the record as well,” Andres said.
Updated at 8:32 p.m.
The Hill · by Lydia Wheeler · August 6, 2018