Rick Gates admits crimes with former Trump campaign chair Paul Manafort

RICK Gates, a longtime business associate of US President Donald Trump’s former campaign chairman Paul Manafort, has testified at Manafort’s fraud trial that they committed crimes.

Gates, whose testimony in federal court in Alexandria, Virginia, was continuing, was expected to be a star witness in the government’s case, having pleaded guilty in February and agreed to co-operate with prosecutors under a deal that could lead to a reduced sentence.

Manafort’s lawyers have signalled they will seek to blame Gates and have accused him of embezzling millions of dollars from Manafort.

He has pleaded not guilty to 18 counts of bank and tax fraud and failing to disclose foreign bank accounts.

“We didn’t report the income or the foreign bank accounts,” Gates told jurors, noting that he knew he and Manafort were committing crimes each time.

The charges largely predate his five months on the Trump campaign but were the first to go to trial arising from Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 US election.

The jury has heard how Manafort made tens of millions of dollars for political work with pro-Russian politicians in Ukraine. Gates was Manafort’s partner in the consultancy.

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

Gates said he repeatedly lied to conceal the bank accounts and, at Manafort’s direction, he would classify money that came in as either a loan or income to reduce Manafort’s tax burden.

Asked whether the money in the accounts was income to Manafort, Gates said, “it was.” Manafort’s defence has sought to blame Gates for any illegal conduct and accused him of embezzling millions of dollars from Manafort.

Mueller is also investigating possible co-ordination between Trump campaign members and Russian officials in the election campaign, but the charges against Manafort do not address that.

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

In questioning Laporta on Monday, a prosecutor asked the accountant about a $US10 million ($A13.5 million) loan purportedly received by Manafort from Russian businessman Oleg Deripaska in 2006.

Laporta, looking at a summary of loans to Manafort and his businesses, said she could not see any indication that the loan from Deripaska had been paid off.

Since the trial started before US District Judge T.S. Ellis last Tuesday, Manafort’s lawyers have kept their cross-examinations brief and at times refrained from attempting to rebut damaging testimony in detail.

But Laporta’s testimony raised the stakes for Manafort, legal experts said.

Testifying under immunity, she was the first witness to admit she knew accounting manoeuvres Manafort and Gates requested of her were wrong and could be crimes.

One accounting trick saved Manafort $US500,000 ($A676,949) in taxes, she said.

Laporta detailed multiple examples in which Manafort and Gates sought to doctor financial records, first in order to lower Manafort’s taxable income and then later to inflate his income so that he could get bank loans.

Some of the manoeuvres were at the request of Gates, while others implicated Manafort, Laporta testified.

Similar to prior witnesses, Laporta testified that Gates and Manafort were in lock-step but that Manafort was in charge.