Rick Gates, testifying in Manafort trial, admits to affair, London apartment

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Paul Manafort (L), former campaign chairman for U.S. President Donald Trump, in Washington, DC, U.S., December 11, 2017, and Rick Gates, former campaign aide to Trump, in Washington, U.S., December 11, 2017 are pictured in this combination photograph.

Both Manafort and Gates were indicted a year ago on charges of bank and tax fraud as part of Special Counsel Robert Mueller's probe.

Paul Manafort's former business partner, Rick Gates, is on the stand for the third straight day in Manafort's bank and tax fraud trial as prosecutors and defense lawyers wage their battle over Gates' credibility.

Gates walked into a packed courtroom a day after he calmly acknowledged having embezzled hundreds of thousands of dollars from Manafort and said the two had committed crimes together by stashing money in foreign bank accounts and falsifying bank loan documents.

Gates not only testified that he had committed crimes with Manafort but also admitted he stole money from his former boss.

Prosecutors relied on Gates to provide first-hand support of the accusations against Manafort.

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".

"Do you remember telling the office of the special counsel you actually engaged in four extramarital affairs?" Gates recounted how he and Manafort used more than a dozen offshore shell companies and bank accounts in Cyprus to funnel the money, all while concealing the accounts and the income from the IRS.

"While the firm believes that her actions were related only to work she performed for Mr. Manafort, and that no other client was affected, a detailed, independent internal review is being conducted to confirm that her activity was isolated", the firm said in the statement.

As Manafort came under pressure to pay his bills, he was forced to seek loans, the court heard.

Defense lawyers wrapped up their questioning of Gates Wednesday following a bruising cross-examination that focused on Gates's own crimes, an extramarital affair and a guilty plea with special counsel Robert Mueller's office that may spare him severe punishment.

At first, Gates merely noted that in March 2016 Manafort hired him to work for "one of the presidential candidates".

"WTF", Mr Manafort wrote in response, "How could I be blindsided like this". "I thought he was needlessly evasive and argumentative", said Barbara McQuade, a former U.S. Attorney in MI who has been watching the trial and said she observed jurors reacting with negative body language as he testified. But Gates pleaded guilty months later and agreed to cooperate in Mueller's investigation of Manafort, the only American charged by the special counsel to opt for trial instead of a guilty plea.

Gates laying out a roadmap on how he and Manafort allegedly dodged US taxes. after admitting Monday they committed numerous crimes as business partners. "Mr. Manafort had the same path", Gates said.

Gates testified that at Manafort's direction he went on to reclassify some of the income as a loan to lower the taxes owed. "In reality, it was basically money moving between accounts", Gates said. And Manafort made millions of dollars working as a political consultant for a pro-Russia party in Ukraine before he worked for the Trump campaign, which could raise questions about Trump's friendly rhetoric towards the country.

In fact, his name was barely mentioned in the first five days of the tax and bank fraud case brought against his former campaign chairman.

"I don't recall", Gates replied.

An FBI forensic accountant, Morgan Magionos, told jurors that bank records from Cyprus, St. Vincent and the Grenadines and the United Kingdom revealed the accounts were connected to Manafort and his associates.

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