The Manafort trial: Guilty on 8 counts

4:18 p.m. ET, August 7, 2018

Gates not shaken by sharp defense questioning

About 10 minutes into the defense's questioning of Rick Gates, the longtime deputy who turned on Paul Manafort, Gates remained unfazed, flatly answering about lies he told the Special Counsel's Office when reaching his plea agreement and about money he siphoned from Manafort's business.

Manafort's defense lawyer Kevin Downing has been trying to rattle him, getting worked up with more sharply worded and provocative questions by the minute.

Had the Special Counsel's Office "confronted you with so many lies you can't remember any of it?" Downing asked, getting red in the face, louder and emphasizing each word in his questions.

Downing pressed Gates about his "scheme" to take money from Manafort and about "false and misleading" information he told the Special Counsel's Office before finalizing his plea. Downing used those words several times in a row in his questions. 

Gates responded that senior Special Counsel's Office prosecutor Andrew Weissmann had confronted him with a lie Gates told to Robert Mueller's office about a meeting he hadn't attended, after Gates had begun negotiating a plea agreement.

That lie led to a second charge Gates pleaded guilty to in D.C. federal court. The first charge Gates admitted to was for the lobbying conspiracy with Manafort.

At first, Gates said he had struggled to provide information to the Special Counsel's Office, implying he had misremembered a detail about a Manafort meeting years before, which led to his guilty plea for lying to investigators. Then, after Judge T.S. Ellis asked Gates a followup question about what he pleaded to, Gates clearly said he had lied to the Special Counsel's Office.  

Downing also dug into Gates' embezzlement of Manafort's business monies, crimes he has not been prosecuted for but admitted to the prosecutors and in court previously. Gates said he could not remember which transactions on a list Downing showed him were legitimate and which were ones he had created to steal funds from his boss. 

When Downing again got worked up and lobbed at him the question, "Did you develop a scheme?" Gates replied succinctly and without emotion, "I just added numbers to the reports."

Gates has said in some of his responses so far that he did not know what Downing meant as the defense lawyer referred to several filings Gates made to Manafort while the pair did business together.  

Downing asked Gates whether he had also submitted false expense reports to the President's inaugural committee. Gates replied he had not told the Special Counsel's Office that in his confessions, and said the inaugural expenses were closely tracked by others. 

3:43 p.m. ET, August 7, 2018

Defense begins questioning Gates with a focus on his credibility

Bill Hennessy

Bill Hennessy

The Manafort trial resumed at 3:13 p.m. ET this afternoon as Rick Gates took the stand again to testify, this time in a round of cross-examination lead by Kevin Downing from the defense team.

Downing sought to establish Gates' pattern of lying right from the beginning by asking him about his plea deal with the Office of the Special Counsel, and forcing him to admit several times that he lied to the Special Counsel before he took the plea deal.

Gates said that he met three or four times with the Office of the Special Counsel in late January 2018.

In February, he accepted the plea agreement -- Gates reiterated today that he has met with the Office of the Special Counsel 20 times since that plea deal was struck. 

Gates has been blinking frequently as he gives his testimony, while Downing has been strident in his questioning, pushing Gates again and again on his plea deal.

3:03 p.m. ET, August 7, 2018

Manafort asked for Gates' help converting PDF and Word docs, changed financial numbers

The jury saw several emails between Paul Manafort and Rick Gates, where Manafort asks for help converting PDF and Microsoft Word files related to his 2016 profit and loss document.

"How do I convert into non pdf word doc?" Manafort emailed Gates in October 2016, forwarding along his 2016 P&L statement in PDF format.

Gates replied that he would do it and sent back the Word version: "Here you go." Gates testified that he did not change any numbers on the Word document, but noted that some formatting would get messed up in the conversion.

Manafort then made edits to the Word document and sent it back to Gates, saying he had "attached a revised P&L." The new document showed a net profit of over $3 million.

Manafort requested that Gates then convert the new Word document back to PDF — the format of the original file.

2:48 p.m. ET, August 7, 2018

Manafort recommended banker who gave him loan as Secretary of the Army

Two weeks after Donald Trump's election, Paul Manafort recommended banker Stephen Calk as Secretary of the Army, Rick Gates told the court Tuesday. Calk is a banker whose bank allegedly loaned Manafort money on false pretenses.

"We need to discuss Steve Calk for Sec of Army," Manafort wrote to Gates on Nov. 24, 2016. He signed the email as "P."

Manafort emailed Gates again two days before Christmas in 2016. Manafort told Gates he had attached contact information for various people he wanted to go to Trump's inauguration. That list included Calk and his son.

At that time, Manafort had resigned as campaign chairman, but Gates still worked in the president's transition team and worked on the inauguration.

Calk was allegedly involved in having his bank, Federal Savings Bank, extend a mortgage based on fraudulent financial details to Manafort in 2016. 

Calk also received a slot on Trump's election economic advisory council, Gates testified. Prosecutors and Gates spoke about emails with Trump's staff throughout 2016 during the court proceeding Tuesday afternoon. 

At 2:14 p.m. ET was the first time the jury heard from a witness during Manafort's financial fraud trial the extent of Manafort and Gates' work for Donald Trump's 2016 presidential campaign and transition.  

Prosecution finished questioning Gates at 2:25 p.m. The defense will have its chance to question Gates beginning at 2:45. The court is currently on a break.

2:29 p.m. ET, August 7, 2018

Rick Gates back on the stand, testifies on falsified loan applications

Rick Gates has resumed testimony in the trial of Paul Manafort, retaking the stand around 1:35 p.m. ET.

For the past 30 or so minutes, Gates has been explaining fraudulent bank loan applications that he and Manafort allegedly created during March of 2016, the time that they would have been working for the Trump campaign. 

Several email threads presented by the prosecutors as evidence show messages from March 16, 2016 in which Gates attempts to secure a loan for Manafort from the Banc of California. In one message, Manafort called Gates "the quarterback" on all document preparation. Gates admitted to falsifying the profit and loss statements that were required by the bank in order to secure the loan. 

Gates said that he lied on the bank loan application by overstating Manafort's income by approximately $6 million. He sent the email to the Banc of California anyway, attaching a 2015 falsified profit and loss statement. Manafort was on the email.

In another email dated March 21, 2016, there was an email chain with Gates, Manafort and Citizen's Bank employee David Fallarino, who wrote back that in order to get the loan "we will have to get creative in terms of income" for 2015. 

2:05 p.m. ET, August 7, 2018

Tensions between Judge T.S. Ellis and prosecutor

Judge T.S. Ellis presides over the Paul Manafort trial.

Judge T.S. Ellis presides over the Paul Manafort trial.

Bill Hennessy/CNN

After the jury was dismissed Monday evening, Judge T.S. Ellis and prosecutor Greg Andres clashed over the prosecutor's perceived body language. 

Ellis scolded Andres for lowering his gaze and demanded that Andres look him in the eye when addressing him. Andres defended himself by saying he didn't want to reveal any facial expressions.

Last week, Ellis had reprimanded lawyers on both sides for rolling their eyes and requested that they "rein in their facial expressions."

Andres and Ellis also got into a debate about the relevance of asking certain questions about political work done in Ukraine. Ellis said he would point to the record to show that he rarely interrupted Andres' questions.

Andres, who clearly disagreed, replied, "I will stand by the record as well." 

Ellis shot back, "You will lose."

At the end of their heated exchange, though, the mood softened a bit. Andres told Ellis that he "didn't mean to be disrespectful," and Ellis assured him that he was "not worried at all." Ellis reflected on the stress and pressure of high-profile cases and noted that he was just trying to "minimize the stress time."

1:36 p.m. ET, August 7, 2018

Gates fills in details of faking documents to send to bank

Rick Gates provided specifics about how he and an accountant for Manafort prepared fake documents to send to a bank to secure a loan.

In 2012, Manafort had collected money from Ukrainians in his shell company Peranova Holdings. To avoid paying taxes on that income, Manafort had told his accountants it was a $1.5 million loan, witnesses have said in court. 

Four years later, when Manafort's Ukrainian lobbying income had dried up, the political operative wanted new loans from banks. But the banks worried Manafort didn't have the cash to support payments on that Peranova loan from years before. 

That's when Gates and accountant Cindy Laporta worked together to create fake documents — a cover letter from Laporta's accounting firm and a back-dated loan forgiveness statement from Peranova to Manafort, signed by Manafort's Cypriot law firm — to show the Peranova loan was forgiven, becoming income.

Prosecutors walked Gates through several emails Tuesday, saying as much.

Gates' testimony corroborated what Laporta had explained to the jury last week, and he filled in the plan by recounting emails between him, Manafort and the accountant.

"Did he ultimately approve?" prosecutor Greg Andres asked Gates about Manafort's knowledge of the plan. "He did," Gates said in court Tuesday. The loan "never existed in the first place?" Andres also asked. Gates said that was correct, and that he told Laporta he would create the Peranova documents needed for the bank's approval. 

Andres asked Gates if the faked letter was effectively saying the loan forgiveness was "between Mr. Manafort and Mr. Manafort." It was, Gates replied.

Laporta, Manafort's personal and business accountant with the firm KWC, testified on Friday at length about how she knew the documents were faked and wrote the sham cover letter at Gates' request for Manafort. 

Gates also described in detail how he sent an out-of-date insurance policy to a bank to prove a Manafort-owned property had no mortgage on it, when current documents would have shown it did.

Citizens Bank had questioned whether it could loan Manafort money backed by a property that the bank thought was already encumbered. 

"Mr. Manafort had asked me to submit the prior year's policy," Gates explained to the jury Tuesday. "The circles are now squared," Gates wrote to Manafort in an email in 2016 about convincing the bank there was no mortgage on Manafort's Union Street property.

Gates' testimony about the bank fraud was somewhat dull in the last 30 minutes before lunch. A few spectators in the courtroom nodded off, yet several jurors took close notes. He returns to the stand after lunch.