IRS agent testifies that Manafort had $16.5M USA in unreported income

In testimony Tuesday Rick Gates detailed various schemes he engaged in while working for Paul Manafort

In testimony Tuesday Rick Gates detailed various schemes he engaged in while working for Paul Manafort

Special counsel Robert Mueller's team has repeatedly clashed in the Paul Manafort case with the Judge T.S. Ellis, who has refused to let prosecutors display photos of Manafort's luxury purchases, urged them to hurry up their questions and has even reprimanded one lawyer for being impolite and not looking at the judge while speaking to him.

Gates faces more cross-examination Wednesday in federal court in Alexandria, Va. Manafort is accused of overseeing an elaborate offshore tax-evasion and bank fraud scheme, and Gates has offered a first-hand account of its workings.

IRS agent Michael Welch said the total includes foreign wire transfers to US vendors like landscapers and clothiers, wire transfers to buy property, and income reclassified as loans.

"I'm here to tell the truth", Gates replied. "I'm not very patient, so don't try my patience", Ellis said.

Andres sought to rehabilitate Gates with a series of rapid-fire questions about financial machinations underpinning the tax- and bank-fraud case against Manafort.

Gates explained that Manafort's financial difficulties worsened in 2014, when Viktor Yanukovych was no longer in power and the Party of Regions disintegrated.

"In essence, I was living beyond my means", Gates said. Prosecutors agreed to drop a wide variety of additional charges against Gates in exchange for his guilty pleas and cooperation against Manafort.

Manafort's conviction would undermine efforts by Trump and some Republican lawmakers to paint Mueller's inquiry as a political witch hunt, while an acquittal would be a setback for Mueller.

In testimony on Thursday, mortgage assistant Melinda James of Citizens Bank told the court that Manafort lied about the status of two properties he owned in order to obtain a $3.4 million loan.

The still-secret conversation occurred Tuesday afternoon in the middle of Gates' testimony against Manafort, who served as Trump's campaign chairman in 2016.

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Rick Gates says he and Manafort disguised foreign income as loans
District Court judge overseeing the Eastern Virginia trial renewed his angry tone with prosecutors Wednesday. Lawyers for Mr Manafort, Donald Trump's former campaign manager, hammered Rick Gates about his own crimes.

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According to Gates, Manafort, who had by then left the campaign, asked Gates in various ways to use his position on Trump's team to do favors for Stephen Calk, a banker who had loaned Manafort millions of dollars - loans that Mueller's team alleges were consummated under false pretenses.

But the grilling got more intense, and personal, when Mr Downing pressed Mr Gates about a "secret life" he said was funded by embezzlement, including an extra-marital affair that Mr Gates himself acknowledged.

He is the first subject of special counsel Robert S. Mueller's investigation to stand trial. "Mr Manafort had the same path".

In an email shown to the jury, Manafort, the former campaign chairman for President Donald Trump, wrote to Gates on November 24, 2016, "We need to discuss Steve Calk for Sec of Army". Welch said the monetary figure was based on an accounting method used by Manafort. The judge said he thought he'd he'd made clear no witnesses were allowed to sit in on the rest of the trial, and after the prosecutors said they'd heard differently, Judge Ellis erupted. "This robe doesn't make me anything other than human". He testified that he and Manafort knew they were committing crimes for years, concealing money in foreign bank accounts and falsifying bank loan documents.

The culmination came Wednesday when Judge Ellis lost his temper with Uzo Asonye, one of the prosecutors, after learning that an IRS agent on the witness list as an expert had been sitting in the courtroom watching the proceedings all week.

He scoffed at the idea Mr Gates had repented for his actions, noting that prosecutors have said they won't oppose his bid for probation and getting him to acknowledge he had not repaid the money he had taken from Mr Manafort.

Manafort has pleaded not guilty to 18 felony charges of bank fraud, tax fraud and failing to disclose some 30 foreign bank accounts.

Gates admitted during testimony on Monday to embezzling money from Manafort.

Meanwhile, lawyers for Manafort blamed errors in loan paperwork on Manafort's former right-hand man Rick Gates, who was handling the process for his boss.

Manafort was chairman of Donald Trump's presidential campaign, and his longtime deputy was part of the campaign, too.

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