Defense in Manafort trial zeroes in on Gates's 'secret life'

Defense attorneys in the criminal trial against Paul ManafortPaul John ManafortEric Holder: Trump releasing docs on Russia probe is 'dangerous abuse of power' Time for sunshine on Trump-Russia investigation Legal expert says Manafort deal could help Trump in short term MORE hammered Richard Gates, the prosecution’s star witness, on the stand Tuesday, accusing him of stealing money from Manafort “to fund a separate secret life.”

Manafort's attorney, Kevin Downing, suggested there was a side to Gates few had seen. "The secret life of Rick Gates," he said. 

Gates admitted on the stand that he had a relationship for a period of time with someone in London and maintained an apartment there for two months when Downing pressed him to admit he stole about $3 million from Manafort.

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Downing presented Gates with documents showing wire transfers for fake expense reports, including a $120,000 payment in 2015 from the Caribbean-based Global Endeavor, which Manafort controlled, to Blade LLC, a company Gates controlled.

Gates tried to appear remorseful as he explained to the jury that he fabricated the expenses because he was “living outside his means.”

“I regret it, clearly, and am taking responsibility for it,” he said.

“It’s embezzlement, is it not?” Downing later pressed.

Gates said it was money he took from Manafort that was unauthorized, but the answer wasn’t enough for Downing.

“Why won’t you say it’s embezzlement?” he asked.

“It’s embezzlement,” Gates finally admitted.

The heated exchange was the courtroom drama many had been waiting for. Spectators and members of the media sat shoulder to shoulder in the packed room after having stood in long lines ahead of Tuesday’s proceedings, hoping for a seat.

The defense highlighted the terms of the deal Gates received for testifying in the bank and tax fraud case against Manafort on charges that stem from special counsel Robert MuellerRobert Swan MuellerSasse: US should applaud choice of Mueller to lead Russia probe MORE's Russia investigation. Gates was indicted on similar charges to Manafort, which were dropped after he agreed to plead guilty to lesser charges of conspiring against the U.S. and lying to the government officials in exchange for this testimony.

Downing asked Gates whether he was told he was looking at 290 months for the crimes that were dismissed. Gates did not recall.

“I stand corrected,” Downing said. “It was 290 years.”

Gates elicited laughs from the crowd when he said he liked Downing’s first answer.

Ellis then interjected to ask Gates if he had any idea how much time he was facing for the dropped charges.

“I understood it to be significant,” he said. “In excess of 50 to 100 years.”

As part of his plea agreement, prosecutors have agreed to recommend a sentence of fewer than five years on the reduced charges, which carry as many as 10 years in prison. They have also agreed not to oppose his request for probation.

But the plea deal is void if Gates is caught lying on the stand, and Downing tried several times to trip him up Tuesday, at one point asking if he told prosecutors he committed the same scheme of submitting reimbursement reports for personal expenses while working for President TrumpDonald John TrumpTrump: I hope voters pay attention to Dem tactics amid Kavanaugh fight South Korea leader: North Korea agrees to take steps toward denuclearization Graham calls handling of Kavanaugh allegations 'a drive-by shooting' MORE’s inaugural committee.

“I’m not sure I told them that or not,” Gates replied.

“Did you submit personal expenses to the inaugural committee?” Downing asked directly.

“I do not recall,” Gates said. “It’s possible.”

Downing questioned why they jury should trust that Gates is telling the truth after all the lies he’s told and the crimes he’s committed. Gates said he was there to tell the truth and accept responsibility.

Gates was then heard saying Manafort had been on the same path, according to multiple media reports.

“I’m trying to change,” he said.

Downing asked Gates if he’s returned any of the money he stole from Manafort or his entities.

“I haven’t,” Gates replied, explaining that the money went into his personal accounts and was spent over the years.

Downing told Judge Ellis he expects to question Gates for another hour when the trial resumes for the seventh day on Wednesday.

Earlier in the day Tuesday, Gates testified during direct questioning from federal prosecutors that he helped Manafort inflate his income on profit and loss statements to obtain a bank loan in 2016.

In applying for a loan from Banc of California, Gates said the income from Manafort’s company was inflated by $6 million.

Gates explained Manafort’s company, Davis Manafort Partners (DMP), had to show its income was around or equal to the previous year to get loans, but couldn’t.

“Why is that?” prosecutor Greg Andres asked.

“Because DMP had no clients,” Gates said.

Prosecutors are working to prove beyond a reasonable doubt that Manafort hid income he earned working as a political consultant in the Ukraine from the IRS in accounts overseas and committed bank fraud when the money dried up.