Paul Manafort trial day 7: Rick Gates cross examination continues

Gates also acknowledged at the federal trial in Alexandria, Va., that he may have been wrongly reimbursed for inflated expenses submitted to President Trump's then-inaugural committee.

Gates and Manafort first met with Dr. K to set up the companies in 2007 in Cyprus, Gates testified.

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

During the first two days of his testimony, Gates admitted to shielding millions of dollars in over a dozen offshore accounts from United States tax collections - all at Manafort's direction. He's expected to go for at least another hour in questioning with Manafort's attorney's.

Gates' ongoing testimony on Tuesday - the sixth day of Manafort's fraud trial - came one day after he testified that he'd committed crimes with Manafort.

Gates answered: "I don't recall".

For most of his testimony, Gates did not look at Mr Manafort, while the defendant stared intently at his former partner.

Prosecutor Greg Andres pointed out that he had created a "loan forgiveness letter between Mr. Manafort and Mr. Manafort". By reporting it as a loan, Gates explained, he could defer the amount of taxes he owed.

Defense lawyers wrapped up their questioning of Gates Wednesday following a bruising cross-examination that focused on Gates's own crimes, an extramarital affair and a guilty plea with special counsel Robert Mueller's office that may spare him severe punishment. But Gates nonetheless faced aggressive questioning by Manafort's lawyer, Kevin Downing, who at one point asked him, "After all the lies you've told and the fraud you've committed, you expect this jury to believe you?" "I'm taking responsibility for it. I thought he was needlessly evasive and argumentative", said Barbara McQuade, a former U.S. Attorney in MI who has been watching the trial and said she observed jurors reacting with negative body language as he testified.

Gates pleaded guilty in February and agreed to cooperate with prosecutors under a deal that could lead to a reduced sentence.

The 46-year-old former political consultant told jurors how Manafort asked for tickets to Trump's inauguration so he could give them to a banker involved in approving a loan at the center of his financial fraud trial. Manafort made millions of dollars working for pro-Russian Ukrainian politicians before he took an unpaid position with the Trump campaign that lasted five months.

In a blistering back-and forth, Paul Manafort's lawyer suggested Tuesday that the star witness in the former Trump campaign chairman's financial fraud trial has told "so many lies" he can't remember all of them. The firm's director was known to Manafort and Gates as "Doctor K". This apparent reduction in income appears to have prompted Manafort, along with his deputy Rick Gates, to submit false or misleading documents to bank to obtain loans.

Gates said it was a "very common method" for Dr. K and that, once the money was moved into the accounts, Manafort decided what to do with it. Mr Downing asked Gates. Prosecutors allege that he failed to pay taxes on millions he made from his work for a Russia-friendly Ukrainian political party, then lied to get loans when the cash stopped coming in. Downing did not question Gates further about any extra-marital affairs when the cross-examination resumed. She also said Manafort told Banc of California that his company made almost $4.5 million when the actual amount was $400,000.

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".

Downing seized on those admissions to try and cast doubt on whether the jury can trust Gates' claims that he only carried out the fraud alleged by prosecutors at Manafort's behest.

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