ALEXANDRIA, Va. (Reuters) – Rick Gates, a longtime enterprise affiliate of U.S. President Donald Trump’s former marketing campaign chairman Paul Manafort, on Monday testified at trial that he helped Manafort file false tax returns and didn’t disclose overseas financial institution accounts.

FILE PHOTO: Former U.S. President Donald Trump marketing campaign aide Rick Gates departs after a standing convention on the U.S. District Court docket following his indictment on tax fraud and cash laundering costs within the particular counsel’s investigation into alleged Russian meddling within the 2016 U.S. presidential election in Washington, U.S., November 2, 2017. REUTERS/James Lawler Duggan/File Picture

Gates was anticipated to be a star witness within the authorities’s case in opposition to Manafort having pleaded responsible in February and agreed to cooperate with prosecutors underneath a deal that might result in a decreased sentence.

“We didn’t submit the required kind designating he had management over an offshore account,” Gates advised the jury in federal court docket in Alexandria, Virginia, on the fifth day of the trial.

When prosecutor Greg Andres requested why, Gates replied: “At Mr. Manafort’s path.”

Gates additionally testified he and Manafort knew it was a criminal offense as a result of they’d been notified by Manafort’s accountants in emails.

Manafort’s attorneys have signaled they may search guilty Gates and have accused him of embezzling hundreds of thousands of {dollars} from Manafort. Gates and Manafort have recognized one another for 20 years and ran a multimillion-dollar political consulting enterprise. Gates additionally labored for the Trump election marketing campaign.

Manafort has pleaded not responsible to 18 counts of financial institution and tax fraud and failing to reveal overseas financial institution accounts. The fees largely predate his 5 months on the Trump marketing campaign however have been the primary to go to trial arising from Particular Counsel Robert Mueller’s investigation into Russian interference within the 2016 U.S. election.

The jury has heard how Manafort made tens of hundreds of thousands of {dollars} for work with pro-Russian politicians in Ukraine. Mueller can be investigating potential coordination between Trump marketing campaign members and Russian officers within the election marketing campaign, however the costs in opposition to Manafort don’t deal with that.

Prosecutors on Monday went by way of a listing of abroad firms and Gates testified that every one of them have been managed by Manafort and contained earnings earned by his political consulting work.

FILE PHOTO: Former Trump marketing campaign supervisor Paul Manafort departs from U.S. District Court docket in Washington, U.S., February 28, 2018. REUTERS/Yuri Gripas/File Picture

Gates mentioned an affiliate, Konstantin Klimnik, had management over the abroad accounts. Klimnik is a Russian-Ukrainian political marketing consultant who was indicted in June on costs stemming from the Mueller probe.

Gates testified that Manafort directed him to report abroad earnings as loans with a view to decrease taxable earnings and that at Manafort’s request, didn’t disclose overseas financial institution accounts, which is required by regulation.

The jury had heard testimony on Friday and Monday from accountant Cynthia Laporta, who described how Manafort and Gates doctored monetary statements and backdated loans.

In questioning Laporta on Monday, a prosecutor requested the accountant a few $10 million mortgage purportedly obtained by Manafort from Russian businessman Oleg Deripaska in 2006. Laporta, taking a look at a abstract of loans to Manafort and his companies, mentioned she couldn’t see any indication that the mortgage from Deripaska had been paid off.

For the reason that trial began earlier than U.S. District Choose T.S. Ellis final Tuesday, Manafort’s attorneys have stored their cross-examinations temporary and at occasions kept away from trying to rebut damaging testimony intimately.

However Laporta’s testimony raised the stakes for Manafort, authorized consultants mentioned. Testifying underneath immunity, she was the primary witness to confess she knew accounting maneuvers Manafort and Gates requested of her have been fallacious and may very well be crimes. One accounting trick saved Manafort $500,000 in taxes, she mentioned.

Reporting by Nathan Layne, Sarah N. Lynch and Karen Freifeld in Alexandria, Virginia, Warren Strobel; modifying by Grant McCool

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