But the prosecution’s witnesses have also testified that they generally believed that Mr. Gates was carrying out Mr. Manafort’s wishes when he gave false information to Mr. Manafort’s accountants. Prosecutors claim that information helped Mr. Manafort evade taxes on tens of millions of dollars in income and fraudulently obtain millions of dollars in bank loans.
Mr. Gates never glanced on Monday at Mr. Manafort, who glared in his direction. Asked whether they were involved in criminal activity together, Mr. Gates responded, “Yes.”
How their scheme worked
When one of the defense lawyers tried to suggest to Mr. Manafort’s tax accountant Monday that Mr. Gates had kept Mr. Manafort in the dark about his own finances, the accountant, Cynthia Laporta, pushed back.
“In most instances, it was clear that Mr. Manafort was aware what was going on,” she testified.
Mr. Gates’s statements reinforced that picture. He said that Mr. Manafort knew it was illegal not to report his foreign bank accounts to the Treasury Department but asked Mr. Gates to help him deceive his accountants so he could conceal income and pay less in taxes.
“I assisted Mr. Manafort in filing false tax returns,” Mr. Gates testified. “We didn’t report the income or the fact that the accounts existed.”
He said that some of Mr. Manafort’s income was disguised as loans from 15 shell companies that Mr. Manafort controlled, most of them in Cyprus.
Four Ukrainian oligarchs funneled money to Mr. Manafort’s accounts from their own shell companies in Cyprus, Mr. Gates testified. Once that income dried up, the government alleges, Mr. Manafort, with Mr. Gates’s help, falsified financial records so he could obtain bank loans maintain his opulent lifestyle.
Why Gates is so important to the prosecutors’ case
The outcome of the trial, the first to be mounted by prosecutors working for the special counsel, Robert S. Mueller III, may well hinge on whether or not the jury finds Mr. Gates to be credible. The trial is separate from the special counsel’s investigation into Russia’s election interference, though Mr. Mueller’s mandate allows him to pursue any crimes uncovered as part of his inquiry.
Mr. Gates and Mr. Manafort worked together for roughly two decades, including on the Trump campaign. Mr. Manafort served as campaign chairman for three months before he was forced out in August 2016. Mr. Gates served as his deputy, then worked as the campaign’s liaison to the Republican National Committee after Mr. Manafort’s departure.
Mr. Gates, 46, admitted Monday that he was guilty of a long list of crimes, including stealing hundreds of thousands of dollars from Mr. Manafort’s accounts by inflating his business expenses. He said that while he was helping Mr. Manafort hide income to evade taxes, and later to inflate his income to obtain bank loans, he was doing essentially the same on his own behalf.
He said he concealed some of his own income in overseas accounts, evading taxes, and lied on applications for a mortgage and for a credit card. In exchange for his cooperation, the government in February agreed to dismiss 22 criminal charges stemming from his involvement in the scheme for which Mr. Manafort is now on trial.
Mr. Gates pleaded guilty to lying to federal authorities and conspiracy to commit fraud but has yet to be sentenced. Although sentencing guidelines recommend a prison term of up to six years, he testified that prosecutors have agreed not to object if his defense attorney argues that he should receive probation.
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