09 August, 2018
The star witness in Paul Manafort's financial fraud trial says the former Trump campaign chairman told him to be truthful about offshore shell companies and bank accounts during a 2014 interview with the Federal Bureau of Investigation.
Rick Gates, the government's star witness who wrapped up his testimony Wednesday, implicated Manafort and himself in financial crimes while also enduring stinging attacks on his credibility and character. He testified that Mr. Manafort directed him not to report the existence of offshore bank accounts that prosecutors allege were used to hide millions of.
Earlier Tuesday, Gates told the court that Manafort would frequently pay for clothing, landscaping and other personal expenses using wire transfers directly from his bank accounts in Cyprus and others in St. Vincent and the Grenadines.
The grand total of Manafort's payments from his offshore accounts to vendors and for properties came out to $15.5 million over the course of 2010-2014, according to Magionos.
Testimony resumes Thursday at 9:30 a.m. ET in Alexandria, Virginia, and the government is expected to rest by Friday. Gates has already pled guilty to two counts in Mueller's probe and testified against Manafort as part of a plea deal with the special counsel's office.
On the seventh day of former Trump campaign chairman Paul Manafort's criminal trial, the prosecution wasn't ready to rest. Gates said that these loans were actually income.
Downing also asked Gates if he had submitted personal expenses to President Donald Trump's inaugural committee.
Manafort defense attorney Kevin Downing tried to confront Gates over whether he had engaged in four extra-marital affairs and failed to disclose them to prosecutors before becoming a witness for the government.
Gates admitted to embezzling hundreds of thousands of dollars - $3 million, Downing claimed, but could not definitively prove - from Manafort.
Before Gates could respond to the question or Downing could provide evidence that Gates lied about the alleged affairs, Judge T.S. Ellis III forced the lawyer to change directions. And the fact that after loaning Manafort millions of dollars Calk became an economic adviser to Trump casts doubt on Trump's famous pledge to "drain the swamp" and puncture the rampant influence peddling in Washington.
"It actually kind of shows in real time the course of months of investigation where they painstakingly did a jigsaw puzzle of records", former USA prosecutor Harry Litman said of Magionos' testimony.
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"WTF", Mr Manafort wrote in response, "How could I be blindsided like this".
The questioning is part of the Manafort defense strategy of presenting Gates to the jury as someone who lies and can not be trusted.
A clothier said he sold Manafort more than $900,000 in suits.
The jury was reminded of the universe of vendors who've testified - the high-end suit sellers, the landscaper, the friend-turned-real-estate-agent, the general contractor - as the Federal Bureau of Investigation and IRS representatives walked through money flowing into their legitimate businesses from Manafort's foreign accounts.
He also admitted to leading a "secret life", embezzling funds from his former boss Manafort, and getting involved in other shady dealings.
Gates testified that he and Manafort knew they were committing crimes for years, saying they had stashed money in foreign bank accounts and falsified bank loan documents.
"Yes, because I'm here to tell the truth and take responsibility for my actions", Gates replied.
"In Cyprus, they were documented as loans".
For this Manafort was paid US$4million a year, in quarterly payments of US$1million, Gates recalled, though at some point the currency switched from USA dollars to Euros.
Instead, Manafort is charged with evading taxes and bank fraud related to the money he made providing political consulting services in Ukraine.
In one exchange published in court Wednesday, Manafort instructs his Cypriot lawyer, Kypros Chrysostomides - referred to in court as "Dr. K" because, according to Gates, his name is hard to spell and pronounce - to transfer money from the Manafort-controlled Leviathan Ltd.