Paul Manafort trial day 6: Rick Gates testifies

Author: CBS News
FILE – In this Feb. 23, 2018, file photo, 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 most critical moment in the former Trump campaign chairman’s financial fraud trial will arrive next week with the testimony of his longtime associate Gates.(AP Photo/Jose Luis Magana, File)

CBS News’ Clare Hymes, Kristine Guillaume and Bryce Klehm contributed to this report

Paul Manafort’s fraud and tax evasion trial resumes for its sixth day, opening with the former Trump campaign manager’s former business associate Rick Gates taking the stand again. Gates, who was called to testify just after 4:00 p.m on Monday, is expected to face questioning for at least three more hours in an Alexandria, Virginia courthouse.

Gates has already testified about illegal activity he undertook with Manafort from 2008-2015, claiming that he underreported Manafort’s income, lied to Manafort’s accountants and to the FBI.

The trial is the first of Mueller’s prosecutions to reach a jury. But lawyers have so far made no mention of Trump or possible campaign coordination with the Kremlin, the central question behind the special counsel’s investigation.

Last week, Manafort was accused of amassing “secret income” and falsifying tax returns and using fake loans to pay less in taxes, among other things.

Yankees tickets, Trump

The government showed a March 21, 2013 agenda penned by Manafort for a meeting with Gates. On it, there are action items regarding Manafort’s “tax plan for April 15,” a meeting with Ayliff, and an “update on movements” between accounts in Cyprus. Gates said Manafort wanted to “facilitate faster transfers” between accounts at this time.

The agenda also has an item entitled “Yanks,” which Gates said refers to Yankees season tickets owned by Manafort. Under this heading, the document reads “tickets going to Trump next week.

Gates says Manafort directed him to move money between Cyprus accounts

Prosecutor Greg Andres, will question Gates for three to four more hours. The testimony so far has focused his clients and the nuanced details of the political “consultancy agreements” between Manafort’s shell companies in Cyprus and Ukraine.

The payments were in the millions, with some made in U.S. dollars and others in euros. Gates said that some of the Cyprus payments were documented as loans, but they were actually compensation for work done by the Manafort group. Asked whether he received “directions” from Paul Manafort to move money between different accounts in Cyprus, Gates answered, “Yes.”

Gates also said during his testimony the payments were represented as something else to Heather Washkin and his tax preparers to “decrease the amount of taxable income.”

Gates told the court about his role in Manafort’s tax preparations, which involved working with and attending meetings with Manafort and his tax preparers, including Philip Ayliff and Cindy Laporta. Gates said Manafort had a “long standing relationship” with Ayliff.

What to expect for Tuesday

After prosecutors get a crack at Gates for the remainder of his testimony, the defense then begins their questions. He’s expected to to face a bruising cross-examination as Manafort’s lawyers try to undercut his credibility and pin the blame on him instead.

Reid reports that Manafort’s whole defense is that he put his trust in Gates who then embezzled from him and failed to accurately report their business income to the government.

Monday’s hearing

CBS News’ Paula Reid reports that at the start of week 2 of the trial, Gates told the court that he conspired with Manafort to falsify tax returns, knowingly failed to report foreign bank accounts and failed to register Manafort as a foreign agent.

In court on Monday, a retired carpenter, a clothier and a high-end landscaper detailed how Manafort paid them in international wire transfers from offshore companies.

Gates testified that he and Manafort had 15 foreign accounts they did not report to the U.S. government, and knew that was illegal. Gates also admitted he embezzled money from his boss — something Manafort’s attorneys have alleged for months.

Editor’s note: An earlier version of this report incorrectly identified Greg Andres as one of Paul Manafort’s defense attorneys. He is a prosecutor.

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