The witness, who is cooperating with prosecutors, claimed he assisted Paul Manafort in filing false tax returns

This article is more than 2 years old

This article is more than 2 years old

The former Donald Trump campaign aides Paul Manafort and Rick Gates were partners in crime who filed false tax returns and hid millions of dollars overseas, Gates told a court on Monday.

Once Manafort’s deputy in a lucrative political consulting business, Gates is expected to be the government’s star witness at his former boss’s high -profile trial for bank fraud and tax evasion.

It is the first criminal case stemming from charges brought by the special counsel Robert Mueller’s investigation into Russia’s assault on the 2016 presidential election. Gates pleaded guilty in February to conspiring against the US and lying to investigators; he agreed to cooperate with prosecutors under a deal that could lead to a reduced sentence.

Coming face to face with Manafort but reportedly avoiding eye contact on the fifth day of the trial in Alexandria, Virginia, Gates testified that he had lied on the political consultant’s behalf while also stealing from him.

Paul Manafort trial: prosecutors seek to paint picture of luxe lifestyle Read more

According to a Washington Post report, the prosecutor Greg Andres asked: “Did you commit crimes with Mr Manafort?”

Gates, 46, replied: “Yes.”

He admitted helping Manafort doctor financial statements, hide sources of foreign income, mislead banks to get loans and cheat on his US taxes, and he claimed that he did so on Manafort’s instructions.

“At Mr Manafort’s request, we did not disclose foreign bank accounts,” Gates told the court.

Gates read out the names of more than a dozen shell companies that he and Manafort had set up in Cyprus, St Vincent and the Grenadines and the United Kingdom to conceal the proceeds of Manafort’s Ukrainian political consulting work.

Asked whether the money in the accounts was income to Manafort, he replied: “It was.”

He also told the court that an associate, Konstantin Kilimnik, had control over overseas accounts. In court filings, Mueller has accused Kilimnik of having current ties to Russian intelligence services, an allegation that he has denied.

In addition, Gates told the jury he had failed to report his own income routed through bank accounts in the UK and embezzled several hundred thousand dollars from Manafort by fiddling his expenses related to their work in Ukraine.

The evidence from Gates, who appeared in court in a blue suit, blue shirt and gold tie, and who worked on the campaign as a liaison to the Republican National Committee, could be the turning point in the trial.

It opened last week with a display of Manafort’s lavish lifestyle, including a $15,000 jacket made from ostrich, and the court heard testimony about what prosecutors say was a web of financial deceit spun over years.

Prosecutors allege Manafort failed to report a “significant percentage” of the more than $60m they say he received from Ukrainian oligarchs. He allegedly opened 30 bank accounts in three foreign countries to “receive and hide” his income, they claim.

Paul Manafort's $15,000 jacket? That's nothing, says ostrich expert Read more

The defence is arguing Manafort was preoccupied by his consulting business and delegated the particulars of his finances to professionals and, in particular, to Gates. They have accused him of embezzling millions of dollars from Manafort.

“Rick Gates had his hand in the cookie jar and he couldn’t take the risk his boss would find out,” they suggested in opening arguments. The witness is therefore expected to face a tough cross-examination from defence lawyers as they seek to destroy his credibility.

Manafort, 69, has pleaded not guilty to 18 counts of bank and tax fraud and failing to disclose foreign bank accounts. The charges largely predate his five months as Trump’s campaign chairman in 2016 and do not relate directly to Russian collusion, but the case has drawn the president’s attention all the same.

He tweeted last week: “Looking back on history, who was treated worse, Alfonse Capone, legendary mob boss, killer and “Public Enemy Number One,” or Paul Manafort, political operative & Reagan/Dole darling, now serving solitary confinement – although convicted of nothing? Where is the Russian Collusion?”