Defense in Manafort trial zeroes in on Gates's 'secret life'

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Part of that record were several emails Manafort sent Gates.

In an aggressive cross-examination on Tuesday, Manafort's lead attorney, Kevin Downing, said to Gates: "You stole from Mr. Manafort".

Prosecutors had intentionally left many of these pieces of evidence blank on an itemized list of documents they are presenting in court, signaling they could be the most sensational and attention-grabbing files in the evidence binder.

Paul Manafort, President Trump's onetime campaign chairman, is on trial in federal court in Alexandria on bank and tax fraud charges.

"I haven't", Gates replied, explaining that the money went into his personal accounts and was spent over the years.

"Mr Manafort directed me to not report those accounts", Gates testified.

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Gates, who is awaiting sentencing, told jurors that he embezzled hundreds of thousands of dollars from Manafort by filing false expense reports.

Judge T.S. Ellis III then asked Gates to clarify if those "loans" were actually just income-specifically payment for services-earned and not declared by Manafort. In prosecutors' questioning, then in a combative cross-examination from the defense team, Gates revealed the extent to which he had siphoned money from his boss and committed a host of other misdeeds.

He scoffed at the idea that Gates had repented for his actions, noting that prosecutors have said they won't oppose his bid for probation and getting him to acknowledge he had not repaid the money he had taken from Manafort. However, the Manafort case - as President Donald Trump has been quick to point out - focuses on Manafort's business dealings and has no direct connection to Manafort's work with the Trump campaign.

Downing accused Gates of lying on expense reports to make trips to London and around Europe.

He also admitted he had flown first class and stayed in luxury hotels during the relationship, using money embezzled from Manafort. Under the deal, he admitted to helping Manafort evade taxes, violate USA lobbying laws, and hide foreign bank accounts.

And Gates faced fraud charges from the special counsel after it discovered he had written a letter to a Swiss movie production company falsely claiming that his own production company was investing in a film project by his friend, Steve Brown. Gates also provided the first witness testimony that overlaps with Trump's presidential campaign. Gates also said Manafort floated banker Stephen Calk's name for consideration as Secretary of the Army, a post he ultimately did not get. His defence team is seeking to pin the blame on Gates, who they say was responsible for day-to-day operations of the business. Prosecutors had previously said that Manafort's interactions with Calk were the only part of the trial expected to overlap with his Trump campaign role.

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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 U.S. dollars to Euros.

Gates, in response to Downing's questions, said that some of his income from his work with Manafort came from transactions Manafort authorized, and some came from unauthorized transactions.

"It's embezzlement", Gates finally admitted.

Although the allegations of collusion between Donald Trump and Russian Federation are not at issue in this trial, any significant blows to the government's case are likely be seized on by the president's defenders, including conservative media, to support his contention that Mueller's investigation is a "rigged witch-hunt". Gates did not have a chance to respond to those allegations Monday.

Gates described to jurors how he repeatedly submitted fake financial documents at Manafort's behest as his former boss became concerned he was paying too much in taxes and, later, that his funds were drying up. Manafort broke his stare only to review government exhibits on a small monitor in front of him. He also said he committed credit card and mortgage fraud, falsified a letter for a colleague involved in an investment deal and made false statements in a deposition at Manafort's direction.

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