Paul Manafort's long-time deputy testified for second day at his former boss's fraud trial in Alexandria, VA and came under fierce fire from the defense

Rick Gates admitted he had lied repeatedly about his own conduct to Robert Mueller's special counsel probe before making a plea bargain

He admitted he had a mistress whom he had bought a London apartment and admitted that he had stolen millions from Manafort himself

Woman was unnamed but Gates is a married father of four who said his wife now knew about the affair

He earlier told prosecutors that he said Manafort and he set up a network of offshore shell companies and bank accounts to hide income from the IRS

Cash-strapped Manafort wrote 'WTF' when he saw how much tax he owed and ordered Gates to bring down the bill illegally, Gates testified

'Mr Manafort had a great day in court,' his attorney Kevin Downing said as he left the courthouse

Paul Manafort's former deputy Rick Gates admitted to using offshore bank accounts to pay for a secret extramarital affair, including providing a London apartment for his mistress and luxury trips through Europe, during Manafort's tax and bank fraud trial on Tuesday afternoon.

Manafort's defense attorneys accused Gates of embezzling money from the former Trump campaign chairman to fund his 'secret life' and overseas mistress during an explosive exchange at the trial on Tuesday.

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Gates also told the court he might have stolen money from the Trump inauguration committee while he was a staffer there after the election.

Gates, a 46-year-old married father of four and the government's key witness in the case, appeared to wither under cross examination from Manafort's attorneys, twitching and fumbling with his words when questioned about what the defense described as his 'secret life.'

'I acknowledge I had a period of time when I had another relationship,' admitted Gates. The woman was not named. He added: 'There is a period of time over 10 years ago when I had a relationship, yes.'

He acknowledged that as part of this relationship he purchased a 'flat in London' and flights to Ukraine, using money from foreign accounts that the defense says Gates stole from Manafort.

Gates acknowledged he also paid for 'fancy hotels' and 'trips to Europe' with around $2.5 million the defense claimed he embezzled.

He said he also used money to travel to Las Vegas for an unrelated work meeting with a movie producer, which he admitted could be considered embezzlement.

In court: Paul Manafort (left) sat a few feet away as Rick Gates, his former deputy, was questioned by prosecutor Greg Andres in front of Judge T. S. Ellis III (rear)

Happier times: Rick Gates (left) was at Paul Manafort side for more than a decade, including acting as his deputy when Manafort chaired Donald Trump's campaign. Both men were at the Cleveland Republican National Convention where Trump became the party's candidate

Manafort's defense team also questioned Gates about a plea deal he reached with the government, which required his to cooperate with prosecutors on the Manafort case in exchange for lenient sentencing guidelines and a reduction in criminal charges against him.

Gates acknowledged he had to plead guilty to false statements after lying during a February interview with federal investigators.

He said 'there's no question I struggled to get all the information out.'

He struggled under cross-examination to remember exactly what he had admitted to during interviews with investigators.

At one point, Downing asked him, 'Have they confronted you with so many lies that you can't even remember them?'

Manafort's attorney Kevin Downing asked Gates if he had embezzled money from the Trump inauguration committee while he was working there in late 2016.

'It's possible,' said Gates.

Gates also said he did not tell the Office of Special Counsel that he filed unauthorized expenses to the inauguration committee.

Gates, who was Manafort's deputy at the political consulting company DMP International, also appeared to get confused when pressed on how much money he expensed from the company's bank accounts without permission from Manafort.

When presented with a list of $3 million in his expenses by the defense, Gates initially told the court that some of the charges were authorized. He also admitted to previously telling investigators that six transfers, amounting to $450,000, were approved by Manafort.

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'Have they confronted you with so many lies that you can't even remember them?' Paul Manafort's defense attorney Kevin Downing to Rick Gates

But when the defense asked him which charges from the list were authorized, Gates was unable to identify them.

The cross examination was contentious from the beginning, with Downing asking Gates, 'When did you begin providing false and misleading information to the Office of Special Counsel?'

Gates responded that he did not provide false information. The defense asked why he had pleaded guilty to lying to investigators.

'Under the one instance I did [provide false information],' replied Gates. 'Up until that point I had not.'

Gates bristled at the claim from Manafort's attorneys that he was living a 'secret life,' arguing that his wife is aware of the affair.

'It's not a secret life on account of my wife is aware of it,' he said.

He also told the court that he has taken responsibility for his actions by cooperating with prosecutors, and said he committed crimes during a 'difficult time' in his life.

'I was living beyond my means,' he said. 'It was a difficult time…I regret it clearly and I'm taking responsibility for it.'

During the cross examination, Gates sparred with Manafort's attorney about whether to describe his actions as 'embezzlement.'

'Why won't you say embezzlement?' demanded Downing, as Gates continued to refer to 'unauthorized' expenses he took from the company and asked 'what difference' his word choice made.

Under pressure from the defense Gates conceded, 'It was embezzlement from Mr. Manafort.'

Downing also prodded Gates about the lack of written records showing that Manafort ordered Gates to commit financial crimes on his behalf.

Gates said Manafort gave him most of these orders in verbal conversations in order to avoid a paper trail.

'After all the lies you told…you expect the jury to believe you?' asked Downing.

Gates responded that he has taken responsibility for his actions, adding that Manafort has declined to do so.

'I'm here to tell the truth,' said Gates. 'I'm here to take responsibility for my actions. Mr. Manafort has the same path.'

Judge T.S. Ellis, who has been tough on the prosecution throughout the case, also interrupted Gates's testimony after Gates claimed Manafort closely monitored the money coming in and out of the company's offshore bank accounts.

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'[Manafort] didn't know the amount of money you stole from him, did he?' asked the judge. 'So he didn't keep that close an eye on it.'

But the questioning prompted a dramatic halt to the trial when Downing asked Gates whether special counsel Robert Mueller's investigators had interviewed Gates about the campaign.

'I'm here to tell the truth. I'm here to take responsibility for my actions. Mr. Manafort has the same path. Rick Gates

That prompted an objection from prosecutors and a sidebar conference. After several minutes of discussion away from the jury and the public, U.S. District Judge T.S. Ellis III called for a 30-minute break, before resuming for the rest of the day without a single mention of the president.

As he left court Downing told reporters: 'Mr. Manafort had a great day in court.'

The testimony was a dramatic turn around after he told prosecutors about his and Manafort's financial affairs - including how strapped for cash, his boss told him to get his taxes lower, illegally.

Manafort wrote 'WTF' and 'not happy' in emails to Gates about his tax demands - then ordered them to be lowered as their company suffered money troubles, Gates told his fraud trial Tuesday.

Gates said the former Trump campaign chairman repeatedly voiced concerns that he was paying too much in taxes and ordered him to get the total down.

In one note described to the jury, Gates says Manafort in wrote the message about tax payments he was going to have to make: 'Rick, I just saw this. WTF?

'How could I be blindsided like this? You told me you were on top of this. We need to discuss options. This is a disaster.'

Gates says that he went on to help Manafort convert foreign income into loans as a way to reduce his tax bill. He later helped draft sham loan agreements and loan forgiveness letters, all at Manafort's direction, he told the jury. All are illegal.

Manafort went from making millions per year doing political consulting in Ukraine to having virtually zero contracts in the country, Gates testified, setting off a downward spiral that prosecutors say led Manafort to commit numerous financial crimes.

Gates, 46, who has been cooperating with the government since pleading guilty to obstruction of justice and conspiracy earlier this year, continued his second day of testimony at the former Trump campaign chairman's tax and bank fraud trial on Tuesday morning.

Paymaster: Among those funding Paul Manafort's company DMP was Viktor Pinchuk, a billionaire steel magnate, who in 2010 was a guest with his wife Elena at an Elton John Foundation benefit in New York where they posed with both Sir Elton and David Furnish

He had told the jury on Monday that the government had agreed not to oppose an application for probation even though the crimes he admitted to carry sentences of up to ten years.

Gates described how he and Manafort opened up a series of offshore shell companies and bank accounts in Cyprus with help from a Cyprus-based attorney known as 'Dr. K.'

Gates said the purpose of the accounts and companies was to receive consulting payments from Ukrainian businessmen, including Victor Pinchuk, a billionaire steel magnate who is seen as pro-Russia, Sergei Lovochkin, a politician and media owner, and Serhiy Tihipko, a banker who is also pro-Putin.

Judge T.S. Ellis III has banned the use of the word 'oligarch' in court, on Monday accusing prosecutors of 'throwing mud at these people' by using it.

The offshore shell companies and bank accounts in were set up in Cyprus to funnel the money from Ukraine, all while concealing the accounts and the income from the IRS.

Key client: Ukrainian president Viktor Yanukovych and his Party of the Regions paid Manafort millions but when he fell in 2014, it started a downward spiral, Rick Gates told the court

'In Cyprus, they were documented as loans. In reality, it was basically money moving between accounts,' Gates said.

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

Gates walked into a packed courtroom Tuesday, 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.

Manafort did not stare Gates down as he did on Monday. Instead, he glanced up at his former protege periodically but mostly stared intently at documents displayed for the jury on a screen in front of him. Gates remained focused on prosecutor Greg Andres and the jury.

Manafort and Gates were the first two people indicted in special counsel Robert Mueller's investigation into potential ties between Russia and the Trump campaign.

But 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.

Interest: Scores of people who waited in line for hours outside the courthouse and then jammed into both the courtroom and an overflow room

Gates, who said he has met with the government 20 times ahead of his testimony, is expected to remain on the stand for several hours Tuesday and then face a bruising cross-examination as defense lawyers try to undercut his credibility and pin the blame on him.

In a reflection of Gates' importance to the prosecution's case, a cart of about a half dozen green-and-white document boxes bearing his name was rolled into the courtroom ahead of his testimony.

The face-off between longtime business associates and former senior members of the Trump campaign drew scores of people who waited in line for hours outside the courthouse and then jammed into both the courtroom and an overflow room that contained a video feed of the proceedings.

The secrecy of the accounts that was provided in Cyprus was important to Manafort, according to Gates, because he did not want his name publicly connected to the money.

Although Manafort's name was not listed on the papers for the shell companies, his name was initially listed on some of the bank account documents, according to Gates.

Gates said Manafort eventually got his name removed from these records because he was being sued by an individual in Ukraine and did not want this person to know he had money stashed in Cyprus.

Gates said he would often make payments to vendors on Manafort's behalf, wiring money from the Cyprus accounts to pay for clothing purchases, home maintenance, and Manafort's other personal expenses.

He said he also had access to Manafort's electronic signature, but only used this when expressly authorized by Manafort.

According to Gates, Manafort specifically told him not to disclose the existence of the Cyprus accounts or shell companies to his personal book keeper Heather Washkuhn.

'Mr. Manafort had basically [advised] that we did not need to inform Ms. Washkuhn of these things,' said Gates.

He said Manafort secured a $4 million-per-year policy consulting contract with then-Ukrainian President Viktor Yanukovych in 2010, after Manafort helped him get elected president.

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Watching daily: Paul Manafort's wife Kathleen (right) has been in court every day and arrived on Tuesday morning accompanied by a friend

In total, the former Trump campaign chairman reportedly collected around $60 million in consulting fees from Ukrainian oligarchs who backed Yanukovych and Ukraine's Party of Regions - $5 million of which was funnelled through offshore entities controlled by Manafort, according to Gates's testimony.

But after Yanukovych fell from power in 2014, Manafort's fortunes in Ukraine shifted dramatically.

'It decreased the income stream, and there was a change in the power structure,' said Gates.

Gates said Manafort's last project in Ukraine was helping the Opposition Bloc party in the 2014 parliamentary elections.

Manafort also did some work for Ukrainian President Petro Poroshenko, but this work was unpaid.

Gates said Manafort drafted a strategy memo for Ukraine's Opposition Bloc after the parliamentary election in 2014.

'The hope was this work would lead to an additional contract,' said Gates.

But the work never materialized, and Manafort's income 'substantially decreased compared to income he received in prior years,' according to Gates.

By 2015, Manafort had zero contracts in Ukraine, his former deputy told the court.

Meanwhile, the Party of Region's political patron, a Ukrainian billionaire named TK, never gave Manafort a promised $1 million payment for his work on the parliamentary elections, according to Gates.

TK eventually agreed to pay the political consultant $500,000 in July 2015, over a year after his work on the elections.

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Once the contacts in Ukraine dried up, Manafort's extravagant spending in the United States began to catch up with him, according to Gates, and the former Trump campaign chairman struggled to pay his bills.