Drama grips court as Manafort lawyers accuse Rick Gates of multiple affairs

Rick Gates has finished three days' worth of dramatic testimony in federal court against his former business partner, ex-Trump campaign chairman Paul Manafort - but not before defense lawyers caused a stir by pressing him for details on his past infidelity.

Gates testified Tuesday that he and Manafort engaged a law firm in Cyprus - and its director, "Doctor K" - to help hide millions of dollars they received for their work in Ukraine.

He appeared to hedge at points, reluctant to speak plainly of his crimes.

Prosecutors had intentionally left many of these pieces of evidence blank on an itemized list of documents they are presenting in court, signaling they could be the most sensational and attention-grabbing files in the evidence binder.

In October 2016, for instance, Gates sent Manafort DMP's profit and loss statement (P&L) from January 1 through June 30 of that year, emails introduced in court Tuesday show. "How could I be blindsided like this" on his high tax bill. After Yanukovych lost power in 2014, "I would say it decreased the income stream", Gates, wearing a blue suit, told the court matter-of-factly. "This is a disaster". He testified that he and Manafort knew they were committing crimes for years, concealing money in foreign bank accounts and falsifying bank loan documents.

He also said Manafort had asked him to disguise income as loans.

For this Manafort was paid US$4million a year, in quarterly payments of US$1million, Gates recalled, though at some point the currency switched from USA dollars to Euros.

Gates told the court Manafort requested he not tell a bookkeeper about payments made from accounts he held in Cyprus, testifying that hundreds of emails show Manafort approved payments out of those accounts, which he said at one point held almost $6 million. Gates also provided the first witness testimony that overlaps with Donald Trump's presidential campaign.

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Neither man was charged in connection with their Trump campaign work, but the trial has nonetheless been a distraction for a president who insists Manafort was treated shabbily and who continues to publicly fume about Mueller's investigation into potential ties between his associates and the Kremlin.

But Weissmann has notably not questioned any witnesses at Manafort's Virginia trial.

Defence lawyers saw an opening to undermine his testimony by painting him as liar and a philanderer, getting him to admit to an extramarital affair and reminding jurors how he had lied to special counsel Robert Mueller's team while working out a plea deal for himself.

It is possible Weissmann is preparing to Manafort's next trial in D.C. - which touches on issues similar to those in Virginia but delves more deeply into Manafort's work in Ukraine and the US registration requirements associated with it. Weissmann made a filing in that case as recently as Monday. Walter Mack, Brown's lawyer, declined comment. He admitted that on his own.

The questioning is part of the Manafort defense strategy of presenting Gates to the jury as someone who lies and can not be trusted. But a transcript of a bench conference held before the cross-examination shows that Downing hadn't planned to get into his infidelity.

In the email, exchange, Gates tells his boss he plans to wire money from Leviathan - one of Manafort's many Cypriot shelf accounts - to the U.S. At the email, he asks for Manafort's permission.

When Downing questioned why Gates had embezzled money from his boss, he used it as an opportunity to issue a public apology.

Gates also acknowledged creating a fraudulent letter for movie producer and political operative Steven Brown, who pleaded guilty in April to participating in a scheme that defrauded investors of over $9.5 million involving false documents.

In one email, Manafort wrote "WTF" and "not happy" about tax payments he was going to have to make, Gates said. But he said most of the money he spent on the affair came from his legitimate bonuses or from his family, and that most of the money he embezzled he shared with his wife.

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