Paul Manafort's former business partner, Rick Gates, is on the stand for the third straight day in Manafort's bank and tax fraud trial as prosecutors and defense lawyers wage battle over Gates' credibility.
Gates spent Monday afternoon and most of Tuesday morning corroborating prosecutors' version of events. The government's attorneys say Gates and Manafort used offshore bank accounts and wire transfers to hide money from the IRS to avoid paying taxes.
Prosecutors also say the men falsified documents to lie to banks in order to qualify Manafort for loans.
Defense attorneys then used several hours of cross-examination to try to damage Gates' credibility in the eyes of jurors. That is expected to continue Wednesday — and then prosecutors are expected to have an opportunity to question Gates again and try to rehabilitate him.
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, who is investigating Russian interference in the 2016 election.
Manafort's defense team says it was Gates who committed the financial crimes, without Manafort knowing. They also have sought to exploit the guilty plea that Gates has accepted after he was indicted on related charges.
Defense lawyer Kevin Downing guided Gates on a tour through the wide array of lies he has told and sought to paint him as a man not to be trusted. Gates testified that he had an extramarital affair a decade ago and that he embezzled hundreds of thousands of dollars from Manafort.
As part of his plea agreement to cooperate with prosecutors, Gates also admitted to lying to investigators from the special counsel's office — a fact Downing also seized upon.
"This jury is just supposed to believe you after all the lies that you've told and the fraud you've committed?" asked Downing.
"Yes, because I'm here to tell the truth and take responsibility for my actions," Gates said. "Mr. Manafort had the same path. I'm trying to change."
Prosecutors cite broader evidence
While the defense's strategy seems focused on destroying Gates' trustworthiness in the eyes of the jury, prosecutors have sought to broaden their case so it's not completely reliant on him. The government spent all of last week calling to the witness stand accountants who worked with Manafort and vendors who testified about how Manafort paid for his luxury goods, including cars and custom suits, by using direct wire transfers from accounts overseas.
Those who dealt with Manafort's taxes said that when they asked Manafort whether he maintained any bank accounts overseas, he told them no.
Cindy Laporta, a tax accountant for Manafort, testified Monday under immunity that she helped file falsified bank loan applications for him even though she knew they were inaccurate.
She said even though she worked with Gates a lot, it was clear to her that Manafort "knew what was going on" in most instances.
That is important to prosecutors, who need to prove not only that Manafort skimped on paying millions of dollars in taxes but also that he did so with intent and not by mistake.