Gates describes how he and Manafort funneled millions through Cyprus accounts

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The trial of Paul Manafort is underway in Alexandria, Virginia, where the former chairman of Donald Trump's 2016 presidential campaign stands accused of defrauding banks to secure loans and hiding overseas bank accounts and income from USA tax authorities. The first witness - Tad Devine, a Democratic political strategist who worked on Bernie Sanders's presidential campaign - took the stand to tell jurors about work he did with Manafort in Ukraine.

Under questioning, Gates said he may have submitted personal expenses for reimbursement by Trump's inaugural committee, which he helped operate.

U.S. District Judge T.S. Ellis III, who has clashed with prosecutors as he urged them to hurry up presenting their case, has largely allowed the prosecution to question Gates uninterrupted.

The judge then brought the trial to a standstill late Tuesday afternoon, calling a brief recess.

Gates explained Tuesday how he and Manafort opened up bank accounts in Cyprus using "shelf" companies created and nominally maintained by a Cypriot law firm to make it more hard for law enforcement agencies to find a paper trail or fingerprints tying Manafort to the accounts.

Under questioning from Downing, Gates acknowledged he had to plead guilty to false statements after lying during a February interview with federal investigators.

Gates is the 15th witness the government has called to testify in the trial through the halfway point of the sixth day.

Manafort's defense attorneys have sought to paint Gates as an embezzler, a liar and the instigator of any criminal conduct. They have several times tried to impugn his credibility before the jury.

During the testimony, Manafort did not stare Gates down as he did Monday. They aimed to show jurors how that money flowed from more than a dozen shell companies used to stash the income in Cyprus. "In reality, it was basically money moving between accounts", Gates said.

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On Thursday, Aug. 2, jurors heard from Heather Washkuhn, Manafort's longtime bookkeeper, who said her boss and Rick Gates gave banks phony profit-and-loss statements to make it seem like their firm made much more money than it actually had. Gates pleaded guilty months later and agreed to cooperate in Mueller's investigation of Manafort, the only American charged by the special counsel to opt for trial instead of a guilty plea.

As Gates described his involvement in preparing a fraudulent invoice on Manafort's behalf, the former Trump campaign chairman sat with his arms folded across his chest. Prosecutors showed jurors a 2009 political memo that Manafort wrote to Deripaska.

On Tuesday, Gates did connect one part of the bank fraud charges against Manafort to his role in the Trump campaign.

Downing also accused Gates of embezzling "millions", a higher amount than Gates later admitted to in his testimony. But, he said he helped hide offshore bank accounts at Manafort's direction.

The email exchange about Calk occurred after Manafort left the Trump campaign but while Gates was active on the Trump inauguration committee.

Gates' account appeared to bolster the prosecution's assertions that Manafort was in full control of his finances and directing Gates' actions.

"We didn't report the income or the foreign bank accounts", Gates told jurors, noting that he knew he and Manafort were committing crimes each time.

Rick Gates, Manafort's former deputy who flipped and agreed to cooperate with the Mueller probe hoping for leniency, returned to the stand on August 7 after a brief appearance the day before. Kerik, on the other hand, isn't putting any weight on Gates' words because of his motivation for testifying.

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