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

A courtroom sketch depicts Rick Gates on the witness stand testifying at Paul Manafort’s trial Tuesday

Attorneys for special counsel Robert Mueller also got a rare - and narrow - acknowledgment from U.S. District Judge T.S. Ellis III that he likely erred when he angrily confronted them a day earlier over whether he had allowed a witness to watch the trial.

Paul Manafort's attorneys in his financial fraud trial in Virginia portrayed the prosecution's star witness, Rick Gates, as untrustworthy Wednesday.

An IRS agent says Paul Manafort didn't report at least $16 million in income on his taxes.

Asked if he had been coached, Gates replied, "The only answer I was told was to tell the truth".

"I'm here. I'm trying to change", he said.

Gates testified that Manafort asked him to float Calk, who was on Trump's economic advisory council, for Secretary of the Army.

She essentially connected the dots of testimony from previous witnesses - vendors, Manafort's bookkeeper and accountants, and Gates - but did so in a way that presented direct links between one witness's part of the story and another's.

Under questioning, Gates said he may have submitted personal expenses for reimbursement by Trump's inaugural committee, which he helped operate. Prosecutors agreed to drop a wide variety of additional charges against Gates in exchange for his guilty pleas and cooperation against Manafort.

Although the allegations of collusion between Donald Trump and Russian Federation are not at issue in this trial, any significant blows to the government's case are likely be seized on by the president's defenders, including conservative media, to support his contention that Mueller's investigation is a "rigged witch-hunt". And the fact that after loaning Manafort millions of dollars Calk became an economic adviser to Trump casts doubt on Trump's famous pledge to "drain the swamp" and puncture the rampant influence peddling in Washington.

Mr Downing forced Gates to admit he had stolen hundreds of thousands of dollars from Manafort by filing bogus personal expenses claims and that he had engaged in an extramarital affair and kept an apartment in London for that goal.

On Wednesday, Gates initially testified Manafort told him to be truthful during a 2014 interview with the Federal Bureau of Investigation about offshore shell companies and bank accounts that contained millions of dollars in proceeds from their Ukrainian political work.

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Prosecutor Greg Andres pointed out he had created a "loan forgiveness letter between Mr. Manafort and Mr. Manafort".

Manafort, who served briefly as Trump's campaign manager in 2016, has pleaded not guilty.

She said Manafort did not disclose that a brownstone he owned in Brooklyn had a mortgage against it and indicated the Manhattan condominium was a second residence, when it was listed for rent.

Gates said Monday that over the years, Manafort directed him to make payments through wire transfers. Downing later argued it was fair game because Gates had volunteered that he had one affair after being asked about his "secret life".

Those who dealt with Manafort's taxes also testified that even though they asked Manafort whether he maintained any bank accounts overseas, he told them no.

Attorney Kevin Downing suggested the revelation would destroy Rick Gates's plea agreement with the special counsel's office but was blocked by an instant government objection.

Evidently, Laporta's now-former employer, Alexandria-based CPA firm Kositzka, Wicks & Co., had no idea these shenanigans were happening right under its nose, which I don't know about you, but I find hard to believe.

NBC's Pete Williams also reported that prosecutors want Ellis to "explain to the jury that he was out of line when he reprimanded them over allowing an IRS agent witness to watch other testimony", according to NBC's Ken Dilanian.

"T$3 he judge's condescending attitude [could give] the jury the impression that the prosecution's case is dubious", said a former US Deputy Solicitor General.

After Gates testified that Manafort was "pretty good about knowing" where his money was, Ellis couldn't suppress a quip that appeared to call into question Gates' testimony.

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