Rick Gates to take center stage at Manafort trial

Aug 07, 2018, 01:57
Rick Gates to take center stage at Manafort trial

After prosecutors appeared to equivocate earlier in the week on whether they would call Gates, who pleaded guilty in February to tax conspiracy, to testify against his former boss, it has become more and more apparent that they will use his testimony to bolster their case against Manafort. The charges largely predate his five months on the Trump campaign but arose from U.S. Special Counsel Robert Mueller's investigation into Russian interference in the 2016 U.S. election.

Trump also tweeted Wednesday that Manafort was being treated unfairly, leading to speculation he could pardon him.

In March 2016, Gates asked Washkuhn - at Manafort's direction, Washkuhn said - to reclassify $2.6 million in "accrued revenue" as "income" on the financial statements of Manafort's company DMP International, even though Washkuhn accounted for DMP's finances on a cash-only, nonaccrual basis.

Gates is expected to be a star witness in the government's case because of his long association with Manafort.

The former political consultant has pleaded not guilty to the charges. In his brief appearance late Thursday, the former accountant, Philip Ayliff, told jurors about preparing Manafort tax forms that asked whether Manafort had any financial interest in foreign accounts. Manafort was aware of the reported loan, which served to reduce his income, she said. Prosecutors say the documents inflated the net income of his business by roughly $4 million, and they say he tried to pass them off as coming from her accounting firm. But while Laporta acknowledged that she regularly communicated with Gates she said she believed Manafort was in the know.

Cynthia Laporta, aertified public accountant with the firm KWC who is testifying with immunity, admitted she did have concerns about the representations given to her about loans by Manafort and his business partner, Rick Gates.

Gates, who pleaded guilty in February of conspiracy and lying to the Federal Bureau of Investigation, is cooperating with Mueller's probe, and is expected to testify later in the trial.

Prosecutors for special counsel Robert Mueller have alleged Pernova Holdings was an overseas shell company used by Mr. Manafort to hide money he made in Ukraine from the IRS.

One member of the jury nodded in apparent agreement when US District Judge T.S. Ellis cut off the prosecution's questioning to ask her if she was afraid of being prosecuted herself. The prosecution's theory is that, time after time, Manafort instructed Gates to lie, and many of those lies were crimes.

"It doesn't matter whether these are good people, bad people, oligarchs, Mafia".

"You've got to try to find a way to throw a monkey wrench in", Buell said. If Manafort is acquitted, they will indeed say that it doesn't prove much of anything about the broader Russian Federation investigation, because the investigation goes far beyond Manfort.

The most significant moment on Friday, however, came when assistant USA attorney Uzo Asonye asked Laporta to describe a conference call in September 2015. She said it claimed Manafort's company brought in millions of dollars more in income than documents her company created.

Prosecutors are heading toward the heart of their financial fraud case against former Trump campaign chairman Paul Manafort.

All told, prosecutors allege that Manafort failed to report a "significant percentage" of the more than $60 million they say he received from Ukrainian oligarchs. Prosecutors said that Manafort used tax-free income stashed in Cyprus accounts to support a lavish lifestyle. She said Gates told her in a conference call the income level "was too high" and proposed reclassifying a portion of it as a loan.

The result, Laporta said, was an altered tax payment that Gates told her "could be paid by Mr. Manafort". Laporta, looking at a summary of loans to Manafort and his businesses, said she could not see any indication that the loan from Deripaska had been paid off.

But defense lawyers are trying to convince the jury that Manafort was consumed by his consulting business and left the particulars of his finances to professionals and, in particular, to Gates.

Paul Manafort's longtime bookkeeper is testifying that profit and loss statements the former Trump campaign chairman submitted to obtain bank loans contained false information - and, at times, obvious misspellings.

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