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Published: Wed, August 08, 2018
Global Media | By Abel Hampton

Gates testifies millions of dollars moved through shell companies, accounts in Cyprus

Gates testifies millions of dollars moved through shell companies, accounts in Cyprus

The fraud trail of Donald Trump's ex-campaign chairman, Paul Manafort, has reached a crucial moment this week, as Manafort's former deputy, Rick Gates, begins his court testimony.

Rick Gates, the former business partner of Paul Manafort, dropped a bombshell in a federal courtroom Monday as part of the special counsel's investigation into Russian election interference.

Gates's appearance in court marked a dramatic moment in the probe: the first visible case of a witness flipping, or turning on friends or colleagues in a case.

Gates is scheduled to testify further on Tuesday.

Manafort did not stare Gates down as he did on Monday. Gates and Manafort used a Cypriot lawyer nicknamed "Dr. K." to establish these companies.

Asked whether the money in the accounts was Manafort's income, Gates said, "it was". He described how they also transferred money from their Cypriot bank accounts to a bank in the Caribbean.

Mr. Manafort provided the connections and signed off on all the big decisions, but it was Mr. Gates who devised much of the strategy and administered the business, according to people who worked with the pair there.

Gates described how he helped Manafort hide the amount of taxes he owed. Gates admitted to submitting inflated expense reports. In return he could receive a lower sentence.

In one instance, Gates disclosed that they had received money from an oligarch and politician from Ukraine, Serhiy Lyovochkin.

"In Cyprus, they were documented as loans". He said he engaged in the wrongdoing at Manafort's direction.

Accountant Cindy LaPorta - who was granted immunity from prosecution - said on Friday she suspected that Gates was misleading her about Mr Manafort's finances.

He testified that "at Mr. Manafort's direction", he knowingly and deliberately violated USA tax law by failing to disclose assets held in 15 foreign bank accounts belonging to both him and Manafort to federal authorities.

Gates' statements reinforced that picture.

Gates walked into a packed courtroom a day after he calmly acknowledged having embezzled hundreds of thousands of dollars from Manafort and said the two had committed crimes together by stashing money in foreign bank accounts and falsifying bank loan documents.

Some of the maneuvers were at the request of Gates, while others implicated Manafort, Laporta testified. "We didn't report the income or the fact that the accounts existed".

"In Cyprus, they were documented as loans".

Though Manafort did serve as then-candidate Trump's Campaign Chairman for three months in 2016, the financial crimes with which he is charged in this case are unrelated to his relationship with the President. The prosecution, however, has maintained that while Gates committed embezzlement, that doesn't make Manafort any less guilty of the crimes he's accused of. Similar to prior witnesses, Laporta testified that Gates and Manafort were in lockstep but that Manafort was in charge.

It's important to note that some of the alleged bank fraud did occur while Manafort was running the Trump campaign.

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