IRS agent: Manafort had $16M in unreported income

IRS agent: Manafort had $16M in unreported income

Rick Gates wrapped up his testimony Wednesday in the trial of his onetime friend and boss, former Trump campaign manager Paul Manafort, reiterating that the two men conspired to lie on their taxes and defraud banks.

Mr Gates, who faced a bruising cross-examination, returned to the witness stand yesterday for additional questioning from a Manafort lawyer who accused the government's star witness of being immersed in "so many lies " he can't even remember them all.

Manafort also falsely classified another $1.5 million in income as a loan, Welch testified - while adding that Manafort never indicated he had foreign bank accounts on his tax returns.

Also on Wednesday, an Federal Bureau of Investigation forensic accountant, Morgan Magionos, told jurors bank records from Cyprus, St. Vincent and the Grenadines and the United Kingdom revealed the accounts were connected to Manafort and his associates. Gates pleaded guilty to reduced charges in February and agreed to cooperate with the government.

Manafort is charged with 18 counts of bank and tax fraud, and his trial in Alexandria, Va., is the first to be brought on by indictments from special counsel Robert Mueller. "I'm not sure why, but there have been certain exchanges at sidebar that have seemed not all that judicious to me", he said.

Downing also asked Gates if he had submitted personal expenses to President Donald Trump's inaugural committee.

Manafort's defense team says it was actually Gates who committed the financial crimes, without Manafort knowing, and Manafort's lawyers also have sought to exploit the guilty plea that Gates has accepted after he was indicted on related charges.

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.

Manafort, who helped Republicans Gerald Ford and Ronald Reagan reach the White House, was Mr Trump's campaign chairman from May to August 2016.

"It actually kind of shows in real time the course of months of investigation where they painstakingly did a jigsaw puzzle of records", former USA prosecutor Harry Litman said of Magionos' testimony.

Gates' earlier testimony on Tuesday, meanwhile, centered on how Ukrainian businessmen paid Manafort for his consultancy work.

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.

As Gates took the witness stand for the final time, Manafort lawyer Kevin Downing asked if his "secret life" spanned the years 2010 to 2014.

In one example, Manafort and Gates emailed each other copies of a doctored profit and loss statement they later sent a bank to help Manafort obtain a loan. He also admitted to stealing money from Manafort and having one extramarital affair.

Gates served as a deputy for Manafort's political consulting business, and then as his deputy on the Trump campaign in 2016.

Gates said he and Manafort turned to a Cypriot lawyer, whom he referred to in court as "Dr K", who set up bank accounts and shell companies on Manafort's behalf and "handled everything".

Gates testified that he and Manafort knew they were committing crimes for years, saying they had stashed money in foreign bank accounts and falsified bank loan documents. Prosecutors had previously said that Manafort's interactions with Calk were the only part of the trial expected to overlap with his Trump campaign role.

Gates said he falsely labeled hundreds of thousands of dollars in income as loans to reduce Manafort's tax liability.

Gates told the court in Alexandria, Virginia, that he had met with government lawyer Greg Andres and Federal Bureau of Investigation agents 20 times and been told only to tell the truth, without any guarantee that he will be spared prison.

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