Manafort ex-aide Gates testifies at trial on Cyprus accounts

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Ellis says the case is not as complex as prosecutors are making it to be.

Throughout the testimony, Manafort was looking at Gates, but Gates kept his eyes on the jury, judge and the prosecutor questioning him.

"Rick Gates had his hand in the cookie jar, and he couldn't take the risk that his boss might find out", Zehnle said.

The testimony came as prosecutors wrapped up their questioning of Gates mid-afternoon Tuesday.

In explosive testimony in the tax and bank fraud trial of the former Trump campaign chairman, Gates said he helped maintain secret accounts in Cyprus, the Grenadines and the United Kingdom.

Gates testified on Monday that wealthy Ukrainian businessmen paid Manafort millions of dollars for his political services through wire transfers to Cyprus-based accounts. He told jurors how he disguised millions of dollars in foreign income as loans in order to lower Manafort's tax bill.

Gates is testifying as part of a plea agreement with the government.

After Gates described his theft as "unauthorized transactions" instead of embezzlement, Downing prodded him to use the latter term - and Gates ultimately relented, saying, "It was embezzlement from Mr. Manafort".

The case against Manafort has little to do with either man's work for the Trump campaign and there's been no discussion during the trial about whether the Trump campaign coordinated with Russian Federation - the central question Mueller's team has tried to answer.

Rick Gates told jurors that he siphoned off the money without Manafort's knowledge by filing false expense reports.

In addition, Gates has admitted to other criminal conduct. He is awaiting sentencing.

Gates said he knowingly provided false and doctored documents to banks and also said that at "Manafort's request", the two men knowingly kept the fact that Manafort had foreign bank accounts from the IRS.

Gates also fabricated a forgiveness letter for what he said was already a fake loan between Manafort's consulting company and a Cypriot entity he controlled.

On Tuesday, Gates did connect one part of the bank fraud charges against Manafort to his role in the Trump campaign.

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The testimony from Gates, a former adviser to Donald Trump, comes after reaching a plea deal with special counsel Robert Mueller earlier this year to testify against his former partner in a lucrative worldwide political consulting firm.

Manafort's defense attorneys have sought to paint Gates as an embezzler, a liar and the instigator of any criminal conduct.

Gates and Manafort worked closely together for years.

Manafort and Gates were the first two people indicted in special counsel Robert Mueller's investigation into potential ties between Russian Federation and the Trump campaign.

The President is watching proceedings carefully as Mueller appears to be moving closer to his inner circle on multiple fronts and has complained that Manafort has been treated like a mobster - even as the White House has tried to open up some distance between Trump and his former campaign chairman.

Gates, who pleaded guilty to conspiracy and lying to the Federal Bureau of Investigation earlier this year, acknowledged his own criminal activity in open court as Manafort sat just a few feet away at the defense table.

Instead, prosecutors called a different witness named Paula Liss.

During a brief break, as the lawyers huddled at the bench with judge, Manafort continued to watch his former associate while Gates flipped the pages of a thick binder containing government exhibits, including copies of their prior correspondence.

Prosecutors said last week that they meant to call him to the stand before resting their case this week. Downing made the comment in court.

Prosecutors have been preparing for this credibility battle by asking a number of witnesses to speak to Manafort's role as a supervisor over Gates.

When the trial broke for lunch, Manafort looked back at his wife, sitting in the front row, smiled and winked at her, followed by a quick shake of his head, seeming to indicate he was unfazed by the morning's testimony.

Under cross examination, she said at the time she believed Manafort was directing Gates' actions and "knew what was going on".

The case against Manafort - 18 criminal counts of tax evasion, bank fraud and conspiracy - is the first to be tried by special counsel Robert Mueller and focuses on Manafort's business dealings. During that process, Gates admitted to two felony charges, but his testimony would be the first time he details those crimes face-to-face with Manafort, his former boss and mentor.

Manafort's former bookkeeper and tax accountants have testified that they dealt with Gates in preparing Manafort's financial paperwork.

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