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War Of Credibility Over Rick Gates Continues In Paul Manafort Fraud Trial

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This courtroom sketch depicts Rick Gates right testifying during questioning in the bank fraud and tax evasion trial of Paul Manafort at federal court in Alexandria Va. on Tuesday. U.S. district Judge T.S. Ellis III presides at top right

IRS agent Michael Welch told a jury that Manafort's unreported income includes foreign wire transfers to US vendors like landscapers and clothiers, wire transfers to buy property, and income improperly reclassified as loans.

Rick Gates, the government's star witness who wrapped up his testimony Wednesday, implicated Manafort and himself in financial crimes while also enduring stinging attacks on his credibility and character.

Now the trial will likely move into gritty tales of bank fraud.

Gates acknowledged that he did for two months and that he took first-class flights and stayed in "fancy hotels" around Europe, but said the money came from bonuses rather than illicit gains.

Rick Gates, under cross examination at the tax evasion and bank fraud trial of his former boss Paul Manafort, admitted that he had "another relationship" involving first-class flights and luxury hotels, but denied these were funded with money embezzled from Manafort.

"I have made many mistakes over many years", Gates, 46, replied in Federal Court in Alexandria, Va.

Prosecutor Greg Andres addressed the defense lawyer's questions about whether the special counsel's office had coached Gates on how to testify.

Gates, 46, has pleaded guilty to conspiracy and is cooperating with the government as it prosecutes Manafort for allegedly evading United States taxes on tens of millions of dollars earned from political consulting work they did together in Ukraine from 2006 to 2014.

Before the final bang - or was it a whimper? - prosecutors had their own opportunity Wednesday morning to revisit with Gates exactly what he had done by way of financial crimes, and the steep, lifelong outcome of prison time he could face if he told the jury inaccuracies about Manafort.

During his testimony Monday, Gates admitted he had embezzled money from Manafort by creating false expense reports on his own behalf.

Manafort has pleaded not guilty to 18 counts of bank fraud, tax fraud and failing to disclose foreign bank accounts. The payments were often in the millions.

War Of Credibility Over Rick Gates Continues In Paul Manafort Fraud Trial
War Of Credibility Over Rick Gates Continues In Paul Manafort Fraud Trial

Special counsel Robert Mueller's team, which is investigating Russian interference in the 2016 election, says Gates was heavily involved in helping hide millions overseas. He also is accused of fraudulently obtaining millions more in bank loans, including while he was working on the Trump campaign.

Gates, who worked as Manafort's right-hand man for a decade, served as deputy chairman of the Trump campaign.

He testified under terms of a deal with Justice Department Special Counsel Robert Mueller, who's investigating suspected collusion between Russian Federation and Trump's campaign during the 2016 presidential election.

Gates also said Manafort floated banker Stephen Calk's name for consideration as Secretary of the Army, a post he ultimately did not get. Prosecutors have pointed to an email in which Manafort sends to one bank a profit-and-loss statement his bookkeeper testified was inaccurate.

The exchange concluded Gates' appearance in the Manafort trial. And the defense has tried to pin much of the blame for the financial crimes on him.

Gates, meanwhile, wearing dark blue suit, white shirt and red tie, cut a lonely figure at the witness stand, blinking hard.

Prosecutors called Morgan Magionos, an Federal Bureau of Investigation forensic accountant, as the next witness to testify. Manafort's conviction would undermine efforts by Trump and some Republican lawmakers to paint Mueller's inquiry as a political witch hunt, while an acquittal would be a setback for Mueller.

Rudy Giuliani, a lawyer for Trump, on Wednesday again called for Mueller to end his inquiry "without further delay".

U.S. District Judge T.S. Ellis III has interrupted prosecutors throughout the trial to encourage them to speed things along.

"You and I were talking during the break, the jury can't be happy with this judge because of the snide, snarky comments", he added to Perino.

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

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