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Paul Manafort trial Day 7: Manafort took in $60 million over five years, including $31 million from Ukraine in 2012

August 8, 2018 at 4:29 AM

Related: [Follow our live coverage of Day 8 in the Manafort trial here]

Paul Manafort, President Trump’s onetime campaign chairman, is on trial in federal court in Alexandria on bank and tax fraud charges. Prosecutors allege that he failed to pay taxes on millions he made from his work for a Russia-friendly Ukrainian political party, then lied to get loans when the cash stopped coming in.

The case is being prosecuted by the special counsel investigating Russian interference in the 2016 U.S. presidential election.

Here’s what you need to know about Day 7 of this trial:

• Former Manafort partner Rick Gates wrapped up his testimony as defense lawyers hinted that he had had four adulterous affairs.

• An FBI accountant testified that $60 million flowed through Manafort’s accounts from 2010 to 2014.

• Prosecutors continued to clash with the judge over the speed of the trial and whether a witness should have been watching the trial.

Related: [Manafort’s defense team takes parting shot at Rick Gates as star witness ends day 7 testimony]

GATES: FOUR AFFAIRS? | $60 MILLION IN 5 YEARS | ELLIS, PROSECUTORS CLASH


5:13 p.m.: IRS agent: Manafort did not pay taxes on $16.4 million in Ukrainian income

Prosecutors are using IRS agent Michael Welch to state clearly what they argued in opening statements and have had witnesses testify about for several days now — that Paul Manafort did not pay taxes on all of the income he earned in Ukraine between 2010 and 2014.

Welch testified that Manafort had $16.4 million in unreported income between 2010 to 2014. The IRS agent said that the tax returns Manafort filed in those years were also false because he didn’t indicate that he had foreign bank accounts.

“They failed to check the box that Mr. Manafort had a foreign bank account,” Welch said, later adding: “He should have marked the box, ‘Yes.’ ”

Welch said Manafort received about $15.5 million from Ukraine, which he then paid directly to vendors and which he did not report or pay taxes on. The money never entered Manafort’s business or personal accounts in the United States, Welch said. Manafort also falsely classified an additional $1.5 million in income as a loan, Welch testified. An FBI accountant testified earlier Wednesday that more than $60 million flowed through Manafort’s overseas accounts between 2010 and 2014, and he spent $15 million of that on homes, clothes and other personal purchases.

Related: [Paul Manafort’s ‘lavish lifestyle’ highlighted in indictment]

Asked the obvious question — whether the IRS would want to know about this money — Welch gave the obvious answer: yes, they would.

Welch said he also looked at the income that was never brought into the United States. He said he was “conservative” in what he allowed as possible business expenses — including 132,000 euros to a yacht company, $49,000 for an Italian villa rental, $45,000 for cosmetic dentistry and $19,800 for a riding academy — because he heard “no testimony” explaining their purpose.

Even under that conservative analysis, he said, Manafort did not report millions of dollars in offshore income.

Under cross-examination, defense attorney Kevin Downing raised questions about an “embezzlement deduction” Manafort might have been able to take and whether he might have been able to spread out reported income as a way to explain discrepancies. Welch testified that those would be possibilities, but it didn’t change his assessment that Manafort filed false tax returns and failed to report income.

And, Welch said, if one wanted to take an “embezzlement deduction” one would have to report the income to start with to even qualify.

Prosecutors concluded the day by telling jurors that Manafort and his family had defaulted on a loan in 2016 and faced court proceedings as a result, though Manafort paid back the principal with a separate loan the following year.

Prosecutor Greg Andres told the judge that the government intends to call eight more witnesses — each of whom will testify for an hour or less. He said the government expects to rest by Friday. Testimony resumes at 9:30 a.m. Thursday.


4:29 p.m.: Prosecutors call a witness who has watched the whole trial, angering Judge Ellis (UPDATE: who earlier permitted it)

Next up for prosecutors is IRS Revenue Agent Michael Welch, who was assigned in April to help prosecutors prepare for trial. Welch testified that he examined Paul Manafort’s business and tax records and, as with the last witness, prepared charts summarizing what he had found.

Welch’s appearance on the stand triggered another heated confrontation between Judge T.S. Ellis III and prosecutors. After going through Welch’s qualifications, prosecutors asked whether he could be treated as an “expert” witness — meaning he, unlike other witnesses, will be allowed to offer his professional opinion in court. Ellis said he could do so. Assistant U.S. Attorney Uzo Asonye then revealed that Welch had been seated in the courtroom for the duration of the proceedings.

Related: [Trial exhibit: Manafort email to Rick Gates in Dec. 2016 with urgent list of invites for Trump inauguration]

Ellis erupted, saying that he typically bars all witnesses — save the case agent — from observing the proceedings, and thought he had done so in this case.

Asonye responded that he thought experts were also allowed to stay and observe. Ellis said that was not his practice, and while he would permit Welch to testify, he issued a stern warning to Asonye, who prosecutes cases in his district.

“I want you to remember, don’t do that again. When I exclude witnesses, I mean everybody,” Ellis growled.

UPDATE: Asonye said he believed the transcript would back him up that in this case, saying Ellis had allowed both the case agent and the expert to remain. “I don’t care what the transcript said; maybe I made a mistake,” Ellis snapped. “Don’t do it again.”

The transcript, provided by CNN, does in fact show that Ellis allowed the expert to stay in court.

The scene in the courtroom as Paul Manafort stood on the opening day of his trial, as depicted by veteran sketch artist Bill Hennessy. An IRS agent and prosecution witness apparently has been in the courtroom from the start, despite a rule banning witnesses from watching the trial. (Reuters/Bill Hennessy)


4:25 p.m.: Is that Manafort’s signature? Or that? Prosecutors, judge ponder handwriting on Manafort documents

Prosecutors tried to end their questioning of FBI accountant Morgan Magionos by turning the tables on defense attorneys — showing two signatures on the same bank document seized from Paul Manafort’s home that they seemed to believe were different. Defense attorneys had just performed the same exercise, and Magionos acknowledged that one signature on the bank document seized in Manafort’s home appeared different than signatures on documents from foreign accounts.

The defense seemed to suggest Manafort did not actually sign documents that bear his name on accounts in Cyprus, though in some cases, the documents were even accompanied by his passport photo. Defense attorney Richard Westling asked Magionos if Manafort’s former partner Rick Gates had access to Manafort’s passport, implying he might be to blame. She said she did not know.

In response, prosecutor Greg Andres projected to the jury two different pages of a bank document seized from Manafort’s home, showing two signatures from two different dates that appeared to be Manafort’s. Andres asked Magionos if she thought they looked different, and she said they did.

Ellis interrupted.

“I’m sorry, you’re saying those don’t look the same? That’s what you’re saying?” he asked incredulously.

She confirmed she thought the signatures looked different.

“All right, it’s up to the jury whether they look the same,” Ellis concluded.


4:11 p.m.: FBI accountant acknowledges discrepancies in handwriting of Manafort banking documents

On cross-examination, one of Paul Manafort’s attorneys, Richard Westling, tried to undermine the credibility of the documents FBI accountant Morgan Magionos used to conduct her analysis of Manafort’s foreign banking activity. Westling flashed various documents on the screen showing signatures presumed to be Manafort’s, but pointed out discrepancies in the handwriting.

“It does look a little different,” Magionos testified when Westling asked about the differences between two bank documents, with one document showing a signature that was more truncated than the other.

In a second example, comparing a signature on a foreign banking document to a loan application to the Bank of California, Westling asked, “Those appear to be substantially different, don’t they?”

“Yes,” Magionos replied.

Related: [Trial exhibit: Manafort email in Nov. 2016 asks Rick Gates to discuss Secretary of Army appointment – for a banker]

Under Westling’s questioning, Magionos also testified that she did not know whether Manafort himself signed the documents she used in tracing the overseas funds, but added that the bank statements and other filings did list him as the benefactor of the accounts.

Magionos testified that there were discrepancies between the FARA filings and income Manafort reported to bookkeepers in both 2012 and 2013, but she didn’t find any discrepancies for 2014.



3:42 p.m.: Manafort took in $60 million over five years, including $31 million from Ukrainian politicians in 2012

A forensic accountant from the FBI closed her direct testimony by saying that between 2010 and 2014, more than $60 million flowed through Paul Manafort’s overseas accounts, and he spent $15 million of that on homes, clothes and other personal purchases.

The year 2012 appears to have been Manafort’s most lucrative; he was paid more than $31 million by Ukrainian politicians and kept more than $27 million of that, FBI accountant Morgan Magionos testified.

That was also the year he spent the most money — more than $9.2 million, she testified, mostly on real estate.

Related: [Trial exhibit: Manafort’s ‘WTF’ email to Rick Gates over his high tax bill in 2015]

Prosecutors say Manafort paid taxes on only about half of his foreign income. He is also accused in Washington, D.C., federal court of failing to register as a foreign agent for his work in Ukraine. He did register in June  2017, but Magionos testified that in those filings, he understated his foreign income significantly.

In 2012, for example, she said the Foreign Agent Registration Act filing showed only $12 million in receipts and $7 million in income. But the FARA filing also gave larger numbers than what Manafort told his bookkeeper for his taxes that year, she said.

Magionos did not testify as to his 2012 reported taxable income, but the indictment lists it as $5.4 million.

Kevin Downing, attorney for Paul Manafort, arrives at the federal courthouse in Alexandria, Va. He has cross-examined many of the prosecution’s witnesses, including former Manafort associate Rick Gates. (Chip Somodevilla/Getty Images)


2:56 p.m.: Prosecutors now matching offshore wire transfers to Manafort’s luxury vendors

Prosecutors are continuing to methodically trace how money flowed from Paul Manafort’s overseas accounts to purchase luxury clothing, rugs, landscaping and other goods and services in the United States. With virtually every vendor jurors heard about earlier in the trial, prosecutors have displayed a chart showing the company’s bills to Manafort on one side, and the foreign wire transfers to apparently pay those bills on the other.

On some charts, the amount billed has curiously been less than the amount paid. The invoices for Scott L. Wilson landscaping, for example, listed Manafort as having owed $218,000, but he appeared to have paid more than $512,000 — $503,000 of it through foreign bank accounts. FBI accountant Morgan Magionos said the discrepancy was because she compiled the chart based only on the invoices that the business had provided, though she offered no further explanation.

Related: [Inside the Manafort money machine: A decade of influence-peddling, lavish spending and alleged fraud]

The purpose of the charts is to connect Manafort to his foreign bank accounts, and to show the volume of money which prosecutors say he failed to claim on his taxes. Prosecutors further bolstered their case by showing emails in which Manafort explicitly directed transfers from the accounts.

The data-heavy testimony has dragged at times. Most jurors are still taking notes and assiduously reading the computer screens, but a few have rubbed their eyes, or leaned back and crossed their arms. At one point, after prosecutor Greg Andres presented a chart showing how money from two of Manafort’s foreign accounts flowed through several other accounts before it was ultimately used to buy a home in New York City, Judge T.S. Ellis III interrupted to clarify that Andres’s purpose was to show Manafort did not report all his income on his tax returns.

Andres said it was, and confirmed that prosecutors were not alleging, at least in this trial, that the flow of money through various accounts was otherwise illegal.

“One can get lost with all these movements of moneys, and sometimes it seems that that’s what the government is aiming at,” Ellis said.


2:46 p.m.: Emails show Manafort transferring money from offshore accounts to buy real estate, clothes, cars

An expensive jacket allegedly purchased by Paul Manafort is in evidence in his trial. (Courtesy of Special Counsel’s Office)

FBI forensic accountant Morgan Magionos sifted through various invoices and documents showing that overseas money tied to Paul Manafort was used to pay for purchases at Alan Couture, Big Picture Solutions, Land Rover of Alexandria and other vendors.

Magionos also testified about strings of emails showing Paul Manafort messaging his lawyers about making wire transfers from offshore accounts to vendors.  Magionos testified that the payments from foreign bank accounts went to purchase real estate or other expenses for Manafort, his business, DMP International, and his family and related entities.

“Pls make the 5 transfers listed below from the Leviathan account and confirm to me when completed,” Manafort wrote in one email to his Cypriot law firm. Shortly after, $32,500 was transferred to Alan Couture, a store where Manafort purchased high-end clothes. In sum, more than $748,400 from Manafort’s overseas bank accounts went to Alan Couture between March and November 2010.

Similar money from overseas bank accounts tied to Manafort went to Big Picture Solutions ($1,661,201) and Land Rover of Alexandria ($163,705). Though some domestic funds were used to cover invoices, a bulk of the payments were covered by Manafort’s foreign bank accounts.


2:13 p.m.: Manafort moved offshore accounts from Cyprus to St. Vincent and the Grenadines, accountant says

FBI forensic accountant Morgan Magionos is now testifying that by July 2014, when Manafort was interviewed by the FBI, he had closed all his bank accounts in Cyprus for which he was listed as a “beneficial owner.” Instead, he had opened accounts in St. Vincent and the Grenadines, where Russian business associate Konstantin Kilimnik was listed as the owner and employees of his Cypriot lawyer, Kypros Chrysostomides, were given signature authority.

There was a banking crisis in Cyprus, Gates testified earlier, that led Manafort to move his money to St. Vincent & the Grenadines.

Related: [Background on the financial crisis in Cyprus]

Magionos went on to testify about a list she created of companies in Cyprus, saying Manafort, Kilimnik or Rick Gates were on the incorporating documents. The directors and secretaries for many of those companies, she said, came from an entity called Inter Jura Cy, which was associated with the Cypriot lawyer’s firm.

While Cyprus was at the time known as an offshore tax haven where the wealthy could quietly hide their money, prosecutors said they were able to get Manafort’s records through a Mutual Legal Assistance Treaty with the country.


12:53 p.m.: Forensic accountant takes stand to track Manafort’s money

Morgan Magionos is the FBI forensic accountant who traced Paul Manafort’s financial affairs as part of the investigation and connected the foreign bank accounts to domestic spending activity.

Magionos, a certified public accountant and certified fraud examiner, reviewed documents and statements from banks in Cyprus, Saint Vincent and the Grenadines, and Britain to analyze Manafort’s overseas financial activity.

Magionos found 31 foreign bank accounts spanning 2010 to 2014 that listed Manafort, Rick Gates or Konstantin Kilimnik as the beneficial owners.

Related: [From six homes to a city jail: Paul Manafort, who redefined lobbying, faces trial]

Magionos said she connected the overseas bank accounts to Manafort in part because pictures of his passport were included in the account opening applications.

Those accounts were closed in 2013, Magionos testified.

Court broke for lunch until 1:35, with Ellis again urging prosecutor Greg Andres to move the questioning along as quickly as possible. Andres estimated that he had another hour but would do his best.



12:31 p.m.: Judge again spars with prosecutors

After a lengthy break, Judge T.S. Ellis III again sparred with prosecutors over the pace of the trial and evidence they want to admit. Such heated arguments have been a common occurrence in the trial.

The latest dispute centered on charts that prosecutors want to show jurors demonstrating the flow of money from Paul Manafort’s offshore accounts to specific purchases he made in the United States. They intend to do so as they question the next witness, FBI accountant Morgan Magionos.

U.S. District Judge T.S. Ellis III, shown in 2008, has not hesitated to challenge prosecutors in the Paul Manafort trial. (Tracy Woodward/The Washington Post)

Defense attorneys argued that the charts were cumulative, essentially repeating evidence about which other witnesses already had testified.

That argument appealed to Ellis, who has repeatedly pushed prosecutors to increase the speed with which they are presenting their case. Ellis noted that the defense was not contesting that Manafort made the purchases with foreign accounts, and questioned whether an elaborate presentation with an FBI accountant testifying about the charts was necessary.

In arguing that he should be allowed to use the charts, prosecutor Greg Andres said the FBI accountant had done a great deal of work to put them to together.

“Look, it isn’t relevant that she spent her life doing it,” Ellis remarked, drawing laughter from those in the court.

“We need to find a way to focus sharply,” the judge continued.

The exchange grew somewhat more heated.

“We’ve been focused sharply for a long time,” Andres said. He noted that the government had to tie specific receipts to specific payments, and that defense attorneys had not agreed to any formal stipulations on that topic.

Defense attorney Richard Westling said defense attorneys would stipulate to one of the prosecution’s charts, which offered a high-level summary of Manafort’s purchases and the flow of money. Andres said he was “at a loss,” noting that the defense had not agreed to do so before Wednesday and that it would be faster to merely question the accountant as planned, rather than write a formal stipulation.

Related: [‘He has torn my head off’: Manafort judge known for being tough]

Ellis ultimately agreed to let Andres question Magionos, though he warned that Andres would be on a short leash and that Ellis would consider objections from the defense at his bench as the testimony proceeded.

“Judges should be patient. They made a mistake when they confirmed me,” Ellis quipped.

As jurors were about to be led into the courtroom, Ellis  remarked that he would not let the FBI’s accountant read certain emails from Paul Manafort that prosecutors want jurors to hear. Andres said he hoped to address that issue later in the afternoon. With jurors walking into the courtroom, Ellis thundered that he had read the prosecutors’ brief and seemed to imply he considered the matter decided. He said one previous court decision that they were relying on contained only a “a throwaway line” to support their argument.

Andres fell silent as the jurors took their seats and Magionos was called to the stand.


11:32 a.m.: Gates testimony ends, forensic accountant expected to follow money trail

Did Paul Manafort spend money for this jacket? An FBI accountant is expected to testify about the trail of money from Manafort’s offshore accounts to his clothiers, among other merchants. (Courtesy Special Counsel’s Office)

With Rick Gates off the stand, testimony will now turn from the salacious to the technical. Morgan Magionos, an FBI forensic accountant, is expected to testify for about two hours, talking about tracing payments from Ukraine through Cyprus to Paul Manafort’s clothiers and home improvement contractors in the United States.

Prosecutors and defense attorneys are still debating whether Magionos will be allowed to read from Manafort’s own emails regarding the flow of money. Those statements are admissible, Judge T.S. Ellis said, but he’s not sure they can be introduced through this agent.



11:16 a.m.: Defense suggests Gates had four extramarital affairs between 2010 and 2014

Rick Gates stepped down from the witness stand just before 11 a.m. Wednesday after a stunning suggestion from one of Paul Manafort’s defense attorneys: Gates might have had four extramarital affairs.

The suggestion came in a final round of cross examination from defense attorney Kevin Downing. After prosecutors asked Gates about his pretrial prep with special counsel lawyers, and Gates testified he had “no doubt at all” that his plea agreement would be shredded if he lied on the witness stand, Downing probed more into what he referred to a day earlier as Gates’s “secret life.”

The defense attorney pointed to about $3 million in transactions, from 2010 to 2014, that he has suggested represent money Gates embezzled from Manafort. He noted an extramarital affair that Gates admitted to Tuesday. Then he asked: Did Gates recall telling the special counsel’s office “that you actually engaged in four extramarital affairs?”

Prosecutors objected, asking why that question was relevant. Downing said it might speak to the idea that Gates’s lying on the witness stand would result in his plea agreement being torn up. The lawyers convened at Judge T.S. Ellis III’s bench for a lengthy conversation that was shrouded in white noise piped through the courtroom.

Related: [Former Trump campaign official Rick Gates pleads guilty to 2 charges]

When the conference broke up, Downing did not ask the same question. Instead, he pointed to the 2010-2014 time period and his earlier questions about Gates’s “secret life.” Those questions first prompted Gates to reveal an affair. Downing asked Gates if his secret life encompassed this period of time.

“Mr. Downing, I’d say I made many mistakes, over many years,” Gates said.

Ellis interrupted, telling Gates to answer the question.

“It did,” Gates said.


10:59 a.m.: Gates told Manafort of his affair, said it lasted five months

Near the end of his questioning of Gates, prosecutor Andres asked about the affair Gates disclosed during his testimony yesterday. Gates said it was a five-month affair that occurred 10 years ago. Gates said it was something he discussed with his wife and had told Manafort about.

Andres spent much of the questioning trying to rebuild Gates’s credibility after the defense cross-examination. Gates testified that he voluntarily disclosed to the FBI that he was embezzling from Manafort. Gates also testified that Manafort said they didn’t need to disclose the foreign bank accounts or report the money coming into the accounts to tax advisers.

Related: [Read the superseding criminal information filed against Rick Gates]

Addressing defense questioning of Gates’s motivations for testifying, Andres asked again about Gates’s plea deal and the prison time he faces. Did Gates think he faced up to 200 years in prison on charges out of the federal court in Alexandria, Andres asked? Gates said he thought he would face a lesser sentence. Ellis interjected, asking how short Gates thought the sentence would be. “I thought it was in the range of 100 years, your honor,” Gates said.

Paul Manafort, left, and his wife, Kathleen, arrive at the federal courthouse in Alexandria, Va., in March. Manafort now enters through an underground garage since he is being held in the Alexandria city jail, but he is allowed to switch from a jail jumpsuit to a suit before he appears in front of the jury. (Jacquelyn Martin/AP)


10:33 a.m.: In rebuttal questioning, prosecutors show Gates hid income from offshore accounts in 2014 FBI interview

Kevin Downing ended his cross-examination of Rick Gates by asking what Paul Manafort’s net worth was around 2015 and 2016.

Was it $20 million? Downing asked.

Gates responded that he was “not privy to” Manafort’s personal finances and did not know the value of all his properties, but “I thought somewhere in the realm of $6 [million] to $12 million.”

Prosecutors have said Manafort reported wildly different numbers for his net worth. On loan applications over a three-month period in 2016, he represented his net worth as $15 million, $17 million, $21 million and $36 million, according to the court documents.

Special counsel Greg Andres then came back to the lectern. He started by rebutting the idea that Gates and Manafort were honest with the FBI in 2014, when agents were investigating their former Ukraine client Viktor Yanukovych.

Related: [Who did Manafort and Gates work for in Ukraine and Russia?]

Gates agreed that the agents did not ask about tax returns and that most of the Cyprus accounts at issue were already closed at that point.

He said he did not tell the agents about any hidden income from those accounts.

Gates again testified that Manafort asked him to go to France and meet with one of their Ukraine patrons, wealthy politician Serhiy Lyovochkin. Gates said Manafort wanted to know whether the entity Lyovochkin used to pay them was “clean” — used only for those payments and nothing else.

Andres then went on to ask Gates again about his plea deal. Downing said Tuesday that prosecutors had agreed not to oppose his request for a probationary sentence, although he faces as much as 10 years in prison. But reading the plea agreement in court, Gates agreed that the commitment was not ironclad. The document says the special counsel “may not” oppose such a motion, depending on the “precise nature” of Gates’s cooperation.

Rick Gates, right, answering questions from prosecutor Greg Andres as he testifies in the trial of Paul Manafort, seated second from left, at the Alexandria Federal Courthouse on Aug. 6. He is on the stand for a third day today. (Dana Verkouteren via AP)



10:25 a.m.: Gates disclosed offshore accounts to FBI in 2014, thought he was truthful

Rick Gates took the witness stand for a third day shortly before 10 a.m., describing how he had been interviewed by the FBI as far back as 2014 about his work in Ukraine — and believed he had told the truth.

Under questioning from defense attorney Kevin Downing, Gates said he met with FBI agents and Justice Department lawyers in July of that year. The way he understood it, the bureau was investigating money that Viktor Yanukovych, the political candidate for whom he and Paul Manafort had worked, might have taken out of Ukraine.

Notably, Gates said he disclosed to the FBI some of the Cyprus and Grenadines bank accounts that he and Manafort used to receive payments from their Ukrainian benefactors. He said Manafort told him they should be “open and provide the information” in response to the bureau’s questions. Gates testified that he told the FBI that they opened the accounts so they could easily get payments from the people they worked for in Ukraine.

The testimony is important because prosecutors have sought to demonstrate that Gates and Manafort hid their connection to the accounts and did not report them on required forms. That is the basis for some of their charges. Their disclosing the accounts to the FBI in 2014 cuts against the idea that they were hiding them. Gates also testified that he and Manafort talked after their interviews, and Manafort indicated that he had been truthful in his own conversation with the bureau.

Gates might be on the witness stand only briefly Wednesday. Downing said he intended to question him for only 15 more minutes, and prosecutors said they would have another half-hour or less of questions.


9:25 a.m.: Gates wasn’t actually asked about having an affair. He admitted that on his own.

On Tuesday, defense attorney Kevin Downing appeared to press Rick Gates to admit that he had an extramarital affair as part of the effort to discredit his testimony against Paul Manafort. But a transcript of a bench conference held before the cross-examination shows that Downing hadn’t planned to get into Gates’s infidelity.

“The government raised an issue whether or not we were going to cross-examine Mr. Gates about specific acts of marital infidelity,” Downing told Judge T.S. Ellis III. “We don’t plan on doing that, but we plan on questioning him about what we call his, you know, separate secret life and how . . . it relates to money he had stolen, embezzled, and things that he was doing, but specifically as to infidelity, we do not think we’re going to get into that.”

Related: [Rick Gates forced to admit extramarital affair as Manifort’s defense team attacks his credibility]

Prosecutor Greg Andres had objected to the defense using the affair against Gates, saying the Fourth Circuit Court of Appeals has ruled “that if somebody cheats on their wife or whatever, it’s not necessarily indicative of truthfulness.”

Downing said his point was not that Gates cheated on his wife but that “he was leading a separate secret life from Mr. Manafort and from others” and that he embezzled from his boss to fund that lifestyle.

But as soon as Downing asked about “the secret life of Rick Gates,” the witness volunteered, “There was a period of time, almost 10 years ago, when I had a relationship, yes. ”

When asked whether he took “unauthorized expenses” from Manafort to fund the “separate, secret life,” Gates replied,  “yes, I acknowledge I had a period of time where I had another relationship.” But Gates said most of the money he spent on the affair came from his legitimate bonuses or from his family, and that most of the money he embezzled he shared with his wife.

Rick Gates leaves federal court in Washington in February. Gates returns to the witness stand for a third day this morning in the trial of former business partner Paul Manafort. (Jose Luis Magana/AP/)


9:12 a.m.: Where is Andrew Weissmann?

Until the trial for Paul Manafort started, Andrew Weissmann had been one of the most prominent members of the prosecution team. He spoke in federal court in Virginia when Manafort pleaded not guilty to bank and tax fraud charges there, and defense attorneys accused him of leaking information to the media about Manafort before joining the special counsel’s office.

Behind the scenes, he was equally integral. Manafort business partner Rick Gates testified Tuesday that it was Weissmann who confronted him about a lie he had told special counsel investigators, and it was Weissmann who told him he would have to admit to that lie in an additional charge to keep his plea deal with the special counsel’s office alive.

But Weissmann has notably not questioned any witnesses at Manafort’s Virginia trial. He has not even sat at the prosecution table. When Weissmann has come to the courtroom — and he has not been spotted every day — he has sat alongside members of the public.

Related: [Here are six things you need to know about the Manafort trial]

There is no reason to believe Weissmann’s absence is for nefarious reasons. The special counsel’s office has pushed back against the leak allegation, and while an FBI agent testified that he was present at a meeting with AP reporters about Manafort, the agent said the AP was offered little more than a “no comment” and an acknowledgment that their reporters were generally on track.

It is possible Weissmann is preparing for Manafort’s next trial in D.C. — which touches on issues similar to those in Virginia but delves more deeply into Manafort’s work in Ukraine and the U.S. registration requirements associated with it. Weissmann made a filing in that case as recently as Monday.

A spokesman for the special counsel’s declined to comment.


9 a.m.: Day 6 recap and look ahead

Rick Gates is back on the stand for another hour of cross-examination Wednesday, as defense attorneys seek to paint him as far too compromised to offer credible testimony against his former boss.

Paul Manafort’s former “right-hand man” admitted Tuesday that he embezzled from their consulting firm, engaged in fraud, lied to the special counsel  and conducted an international extramarital affair.

He appeared to hedge at points, reluctant to speak plainly about his crimes. But he was consistent in saying he was now telling the truth and that there was a “strong record” to support his key assertions: that Manafort directed him to hide money from the IRS and fake financial documents to get bank loans.

Part of that record were several emails Manafort sent Gates. The first made clear that Manafort was upset about his 2014 tax bill.

“WTF? How could I be blindsided by this. You told me you were on top of this,” he wrote Gates in April 2015. “This is a disaster.”

Related: [From ‘the Count’ to inmate: The fall of former Trump campaign chair Paul Manafort]

Gates testified that at Manafort’s direction, he went on to reclassify some of the income as a loan to lower the taxes owed.

Another email from February 2016 had Manafort conversing with Gates about a loan forgiveness letter that both Gates and an accountant have testified was fraudulent. The loan was actually income disguised to lower Manafort’s taxes, he said, and then forgiven to help Manafort get a loan.

And later that year, while trying to get another loan, Manafort himself asked Gates for a version of the firm’s 2016 Profit & Loss Statement that could be edited, Gates testified. Manafort then sent to a bank a version of the statement that showed $3 million in profit that year rather than $600,000 in losses, Gates said in describing emails prosecutors presented in court.

Prosecutors will probably draw Gates back to those facts and away from his own misbehavior on redirect examination.

Here’s The Post’s Rachel Weiner summarizing the highlights of the day. As always, cameras are not permitted in the federal courtroom, so we feature the courtroom sketch work of artist Dana Verkouteren:


Rachel Weiner tries to cover Alexandria's federal court from a small windowless room with no cellphone access. She sometimes ventures outside to write about crime in Alexandria and Arlington.

Matt Zapotosky covers the Justice Department for The Washington Post's national security team. He has previously worked covering the federal courthouse in Alexandria and local law enforcement in Prince George's County and Southern Maryland.

Lynh Bui is a local reporter covering Prince George's County police, fire and courts. She joined The Washington Post in 2012 and has previously covered Montgomery County education.

Tom Jackman has been covering criminal justice for The Washington Post since 1998 and anchors the True Crime blog. He previously covered crime and courts for the Kansas City Star.

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