Throwing salt into the wounds of his longtime boss, Rick Gates returned to the witness stand Tuesday morning to testify about Paul Manafort’s alleged bank and tax fraud crimes.
Gates—a longtime business associate of Manafort who followed the former campaign chairman to work on Donald Trump’s 2016 presidential run—extensively described his role in deceiving banks using one of Manafort’s mortgaged properties, disguising foreign income as loans, and hiding money in various Cypriot and offshore accounts.
Manafort’s defense team is expected to cross-examine Gates this afternoon. Defense attorney Thomas Zehnle attempted to pin blame on Gates in opening statements, saying Manafort misplaced his trust in Gates.
But in his fourth hour of testimony since taking the stand Monday, Gates on Tuesday described to jurors one scheme he was involved in: As Manafort’s cash from his foreign lobbying work began to dwindle, the longtime political operative began pursuing bank loans. Gates testified to faking a loan forgiveness letter for Manafort in 2016, converting a 2012 loan from a Manafort-controlled Cypriot entity into income for a mortgage application.
Appearing to undercut defense lawyers’ strategy to downplay Manafort’s role, Gates testified that Manafort knew of the ploy, and urged Gates to ensure his tax preparers included a cover letter for the forgiveness letter on the accounting firm’s letterhead.