A defence lawyer has accused the protege of former Trump campaign chairman Paul Manafort of being immersed in “so many lies” he cannot remember them all.
Defence lawyer Kevin Downing began his cross-examination of long-time Manafort deputy Rick Gates by pressing him on his own lies to special counsel Robert Mueller’s investigators, an extramarital affair and hundreds of thousands of dollars he admitted to embezzling from his former boss.
Mr Downing also ventured into territory the two sides have mostly avoided: discussion of Donald Trump’s presidential campaign. The charges are not related to Mr Manafort’s work with the Trump campaign.
Mr Gates has pleaded guilty in Mr Mueller’s investigation and agreed to cooperate with investigators by testifying in the financial fraud trial.
“After all the lies you’ve told and the fraud you’ve committed, you expect this jury to believe you?” Mr Downing asked.
Mr Gates said he did, but the defence lawyer was not satisfied.
After Mr Gates described his theft as “unauthorised transactions” instead of embezzlement, Mr Downing prodded him to use the latter term — and Mr Gates ultimately relented, saying, “It was embezzlement from Mr Manafort”.
Earlier, Mr Gates told jurors how he disguised millions of dollars in foreign income as loans in order to lower Mr Manafort’s tax bill.
Mr Gates recounted how he and Mr Manafort used more than a dozen offshore shell companies and bank accounts in Cyprus to funnel the money, all while concealing the accounts and the income from the IRS (Internal Revenue Service).
But the grilling got more intense on Tuesday afternoon when Mr Downing pressed Mr Gates about a “secret life” he said was funded by embezzlement, including an extramarital affair that Mr Gates himself acknowledged.
Mr Gates also said he may have submitted personal expenses for reimbursement by Trump’s inaugural committee, which he helped operate.
After Mr Gates struggled to recall precisely what he had told Mr Mueller’s team, Mr Downing asked if he had been confronted with “so many lies” that he cannot keep his story straight.
Both sides have agreed to limit discussion of the campaign to avoid prejudicing the jury, though they did permit testimony about the overlap of a bank loan with Mr Manafort’s role in the Trump election effort.
Mr Gates previously told jurors he embezzled from Mr Manafort by filing false expense reports. 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 Mr Manafort’s direction.
Prosecutors summoned Mr Gates to give jurors the first-hand account of a co-conspirator they say helped Mr Manafort carry out an elaborate offshore tax-evasion and bank fraud scheme.
Mr Gates testified that he and Mr Manafort knew they were committing crimes for years, saying they had stashed money in foreign bank accounts and falsified bank loan documents.
“In Cyprus, they were documented as loans. In reality, it was basically money moving between accounts,” Mr Gates said.
Mr Manafort and Gates were the first two people indicted in Mr Mueller’s investigation into potential ties between Russia and the Trump campaign.
Mr Gates pleaded guilty months later and agreed to cooperate in Mr Mueller’s investigation of Mr Manafort, the only American charged by the special counsel to opt for trial instead of a guilty plea.
On Tuesday, Mr Gates did connect one part of the bank fraud charges against Mr Manafort to his role in the Trump campaign.
He said Mr Manafort asked for tickets to Mr Trump’s inauguration so he could give them to a banker involved in approving a loan at the centre of his financial fraud trial.
Mr Gates also said Mr Manafort floated banker Stephen Calk’s name for consideration as Secretary of the Army, a post he ultimately did not get.
The email exchange occurred after Mr Manafort left the Trump campaign but while Mr Gates was active on the Trump inauguration committee.
Mr Gates described to jurors how he repeatedly submitted fake financial documents at Mr Manafort’s behest as his former boss became concerned he was paying too much in taxes and, later, that his funds were drying up.
In one email, Mr Manafort wrote “WTF” about tax payments he was going to have to make, Mr Gates said.