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Manafort Trial: Gates Wraps Up Testimony and IRS Agent Takes the Stand
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9 Aug 2018 12:35 PM EST

By Laura Tucker, Staff writer; Image: Paul Manafort (Image source: Screenshot)

 

It's unknown how much of an influence key witness Rick Gates had on the jury in the Paul Manafort trial, as much as the defense tried to pin all the wrongdoing on him. Yet, the prosecution still isn't done, pulling in an IRS agent to testify just after Gates.

 

Manafort, Donald Trump's former campaign chairman, is going through the first of two trials connected to special counsel Robert Mueller's Russia investigation. This one doesn't focus on the Trump campaign, with tax and bank fraud charges at the heart of it instead.  

Gates is the defendant's former second-in-command. He took a plea deal, turning on his former boss. Manafort's defense is to blame it all on his protege.

 

Already in the first two days of testimony, Gates testified to the illegal money handling that he did at the request of his boss. In return, the defense brought up an extramarital affair he had and also got him to admit that he may have stolen money from Trump's inauguration campaign. 

Defense attorney Downing, in one last chance to show Gates to be less of a standup guy than his boss, asked him if he had informed Mueller's office that "you actually engaged in four extramarital affairs."

 

This led to a sidebar with U.S. District Judge T.S. Ellis III, and Downing changed the question to one of asking whether the witness's "secret life" continued into the period the trial is focusing on, from 2010 through 2014. 

"Mr. Downing, I'd say I made many mistakes, over many years," Gates responded. He later admitted that he did live a "secret life" during that time frame.

 

The next witness, IRS agent Michael Welch, watched the trial from the gallery before his turn to testify. Prosecutors had asked Ellis to allow him as an expert witness, meaning he'd be allowed to offer his professional opinion. Assistant U.S. Attorney Uzo Asonye admitted that Welch had been sitting in the gallery throughout the trial. 

Ellis informed the court that he usually bars all witnesses from observing the trial, and he thought he did that in this case. "I want you to remember, don't do that again. When I exclude witnesses, I mean everybody," he said.

 

When it was pointed out by Asonye that Ellis had previously allowed the expert to stay in the courtroom, Ellis shot back, "I don't care what the transcript said; maybe I made a mistake. Don't do it again." 

Welch testified that Manafort paid more than $15.5 million to vendors in the timeframe between 2010 and 2014, yet didn't report or pay taxes on that money. He also falsely classified some of his other income as loans.

 

The witness also stated that the dollar amount was a conservative estimate and didn't include other possible expenses of 132,000 euros to a yacht company, $49,000 to rent an Italian villa, $45,000 for cosmetic dentistry, and $19,800 for a riding academy. He reported that Manafort didn't report millions of dollars in offshore income. 

This was based on the accounting of FBI forensic accountant Morgan Magionos, who testified she found 31 foreign bank accounts in that same time frame. Those accounts listed Manafort, Gates, or Konstantin Kilimnik, another Manafort employee, as the owner.

 

These accounts were kept in Cyprus until around 2013 when the island had a banking crisis, and they moved the money to accounts in St. Vincent and the Grenadines. Emails from Manafort to a Cyprus law firm were shown of him asking for wire transfers from what he described as "my" account. Gates had previously testified he set up the overseas accounts for Manafort. 

Defense attorney Richard Westling cross-examined Magionos and asked if Manafort's signatures were different on the documents used to open the overseas accounts. She said there were differences. He asked if she knew for sure Manafort had signed the documents, and she answered she didn't.

 

Prosecutor Greg Andres brought up that there were differences in Manafort's signature within a single document from Manafort's home. Magionos thought that was the case. 

The prosecution thinks it may be able to wrap up its case on Friday.

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