A close business associate of Donald Trump’s former campaign chairman testified that he helped Paul Manafort file false tax returns and hide money in Cyprus accounts.
Rick Gates is the US 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 reduced sentence deal.
He 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.
Manafort’s defence hinges on pinning the blame on Gates, who they accuse of embezzling millions of dollars.
Gates has been described by witnesses as Manafort’s go-to man in his multimillion-dollar political consulting business.
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 defence team, Reuters reported.
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 US election.
The jury has heard how Manafort made tens of millions of dollars for work with pro-Russian politicians in Ukraine.
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.
Gates also testified that both he and Manafort had control over the foreign accounts, as well as Manafort’s business associate Konstantin Kilimnik.
Kilimnik is a Russian-Ukrainian political consultant who was indicted in June on charges stemming from the Mueller probe. In court filings, Mueller has accused Kilimnik of having ties to Russian intelligence services, an allegation he has denied.
Gates testified that Manafort told him to report overseas income as loans to lower Manafort’s taxable income, supporting the testimony of his accountant.
“When income came into the company, Mr. Manafort directed whether it would be treated as income …or loans,” Gates said.
