The Manafort trial: Guilty on 8 counts

The word “Trump” came up in trial today, but it is unclear who it is a reference to.

Prosecutors showed the jury notes that reference “Trump” from a meeting Rick Gates and Paul Manafort had. 

According to the notes, in 2013 a “Trump” was apparently set to receive Yankees tickets from Manafort, though neither the notes nor prosecutors specified which Trump was being referenced.

"Tickets going to Trump next week," the meeting notes said. The reference on the document fell under the item "Yanks," meaning Yankees season tickets Manafort had purchased for several thousand dollars. 

The first bullet point under the "Yanks" header said the tickets were "never received."

Prosecutors did not lead Gates into explaining more detail about the apparent perk — or which Trump it was referring to. Neither Gates nor prosecutor Greg Andres uttered the word "Trump." The agenda was merely shown on screen for a few seconds to the jury.

The Yankees tickets haven't been fully explained in the context of Manafort's fraud case, though prosecutors have alluded in previous court filings and in court that the season tickets were a suspicious purchase of Manafort's that plunged Manafort into debt years later. A Yankees employee is on the prosecutors' witness list but has not yet been called to testify during the trial.

The meeting agenda shown in court Tuesday with the "Yanks" reference also showed how Manafort put Gates in charge of reviewing Manafort's taxes with an accountant and working with their Cypriot law firm on moving money between Manafort's foreign accounts.

Donald Trump himself has not come up yet in the trial, though prosecutors and witnesses have referred to Manafort's Trump Tower apartment as among the real estate properties he falsely described to the banks as his residences.

The Trump Tower apartment, in fact, was used like a rented hotel room for Manafort and his associates when they traveled to New York City, a witness testified last week.

Rick Gates testified Tuesday that he and Manafort were interviewed by the FBI in July 2014 in connection with a forfeiture investigation that the Ukrainian and United States governments were working on.

Gates recalled that he was told they were not under investigation at the time and that investigators asked him questions about his work in Ukraine.

Gates said he and Manafort were interviewed separately, and Gates went first. 

Gates testified that after he was interviewed, Manafort asked him to speak with one of their Ukrainian businessmen about the FBI interview. Gates said they met in France.  

Direct questioning of Gates will likely continue for another two hours, according to prosecutor Greg Andres.

Last week, the government case referenced several "mystery invoices" that appeared to be falsified. 

On Tuesday, during direct questioning of Rick Gates, he acknowledged that he was the one who had created these invoices for fake amounts of money for wire transfers. The prosecutor directly asked him if they were "fake" — Gates replied that they were "modified" invoices. He asserted that the payments were still legitimate. 

The money never actually went to the vendors, like Big Picture Solutions; instead, Gates testified that the money went to banks.

Gates testified that he used information provided by Manafort to create the invoices. The purpose of this, according to Gates, was that the wire transfers would not be recorded on United States business records. 

Prosecutor Greg Andres said in court he expects two more hours of direct questioning of Rick Gates before the defense has an opportunity to question Gates.

Paul Manafort directed moving money through Cypriot accounts over email, Rick Gates testified Tuesday morning. 

Prosecutors began to show emails between Manafort and Gates Tuesday morning that confirm Gates' story that Manafort directed moving the money his consulting company earned from Ukraine through Cypriot accounts. 

One sent in November 2011 was especially condemning.  

Gates had written to Manafort about transferring money from one of Manafort's shell companies, Leviathan Advisors Limited, to their above-board consulting group, DMP International. "Unless you approve otherwise," Gates ended his note proposing the transfer.  

"This works. Proceed as you lay it out below," Manafort wrote back, signing his email with the letter "P."

The subject line of the email was "Payments."

Moving the accounts

At some point during the European banking crisis, Manafort's law firm in Cyprus that oversaw the legal process of setting up the accounts moved them to the country St. Vincent and the Grenadines, in the Caribbean.

Around that time, Manafort asked for his name to be removed from the bank account registrations, Gates said. Gates said his name was taken off some but not all legal documents in the foreign country.

Gates said Manafort especially wanted to avoid having his name listed in any documents linked to the accounts because he was embroiled in a lawsuit with someone in Ukraine.

A second email

Another email prosecutors showed and Gates confirmed came in 2015, from Konstantin Kilimnik to Gates discussing money a Ukrainian client had not yet paid Manafort's firm through the accounts.

At the time, Manafort was dry on cash and beginning to panic.

Prosecutors have alleged that around this time he was using the hollow foreign accounts to help him reduce the taxes he paid to the US government and defraud at least one bank into giving him a loan. 

"This is to calm Paul down," Kilimnik wrote to Gates. "I think the wire will go next week realistically." Gates told the court that "Mr. Manafort was quite upset money had not been sent," and Kilimnik wanted to show the boss they were making the effort.

That contract for 1 million euros, with Ukrainian Sergei Lyovochkin and executed between shell companies both sides used, was never paid in full. 

Rick Gates started his morning of testimony getting into the gritty details of exactly how much money each Ukrainian billionaire contracted Manafort for — showcasing the amount of money that was flowing into the hidden Cypriot accounts in 2011 and 2012.

It amounted to at least 5 million euros, according to Gates' Tuesday testimony. That's about $5,800,000 in today's US dollars.

Prosecutors and Gates showed the jury four different contracts where a Ukrainian's shell company agreed to pay a Manafort shell company for overseas political or policy consulting work. In one instance, the payment supported lobbying in the United States, Gates said.

Manafort reported some of the payments to tax authorities in the US as loans — though they were income, Gates said.

The consulting contracts showed Manafort's entities like Black Sea View Limited, Peranova Holdings and Leviathan Advisors Limited would earn more than 5 million euros from the Ukrainian billionaires Sergei Lyovochkin and Sergei Tigiko.

The Ukrainians used shell companies called Telmar Investments and Dressler Holdings to enter into the agreements and make the payments to Manafort, Gates said. 

The companies, which Gates has referred to as "shelf" companies in his testimony, had no employees and sold no products. Their sole reason for existence was to accept payments, he said.

Note: An earlier version of this post incorrectly stated 5 million euros equated $5,794,415,000 in US dollars. That was a few too many zeros. It is about $5,800,000.

Rick Gates has taken the stand again in the Paul Manafort trial in Alexandria, Virginia.

He entered the court room at 9:35 am wearing a dark navy suit and light blue tie. 

Justice Department lawyer Greg Andres, who was questioning Gates for all of yesterday's testimony, resumed his questioning.

He began by asking about the Cyprus bank accounts that Ukrainian businessmen had asked Gates and Manafort to set up for payment purposes. 

During his testimony on Monday afternoon, Rick Gates offered some insight into his cooperation with the government.

Gates testified that he had met 20 times with the government to prepare for Monday’s testimony. 

He said that he had turned over evidence to the government and that the government has promised not to bring any additional charges.

Gates admitted to three other crimes that had not been previously known: He lied on a mortgage application; he lied on credit card applications; and he filed false expense reports to employer.

Gates was extremely forthcoming about the crimes he -- and Manafort -- allegedly committed, admitting over and over that, “yes,” he knew he was lying to the accountants, lying about having foreign accounts, lying to investigators during an initial meeting.

One of the first pieces of evidence Gates read from was his plea agreement. He admitted that he had conspired against the government with Mr. Manafort from 2008-2015. 

Paul Manafort's former deputy-turned-prosecutor's witness Rick Gates returns to the courtroom Tuesday for a second day of testimony against the former Trump campaign chairman.

The testimony is poised to pack even more drama into the courtroom than the 78 minutes Gates was on the witness stand a day earlier, as Manafort's defense team will get the chance to cross-examine Gates — and they've made clear the crux of their defense will be to blame Gates for Manafort's alleged crimes.

Gates was a deputy to Manafort in his lobbying business and then on the Trump campaign, but after flipping and pleading guilty to charges earlier in February, he testified against Manafort on Monday that they had 15 foreign accounts they did not report to the federal government, and they knew it was illegal.

Gates also told jurors that he cheated Manafort out of "several hundred thousand" dollars, which is likely to be a threat Manafort's attorneys pull on to try to undermine Gates' credibility with the jury.

Manafort is charged with 18 counts of tax and banking crimes, and has pleaded not guilty to all charges.

Special counsel Robert Mueller's team indicated it expects to question Gates for three more hours on Tuesday before the defense team will get its chance to grill him.

On Monday, Gates described his history of working with Manafort, his plea deal and how Manafort's consulting business operated in Ukraine. But there are plenty more details that were laid out in the indictment against Manafort that Gates hasn't yet discussed that will likely be raised on Tuesday.

Gates' testimony is expected to be the key focal point of the Manafort trial, the first that Mueller's team has brought before a jury as part of the broad investigation into Russian election interference in 2016.

Trump hasn't tweeted about Manafort since the first day of the trial last week, and the trial itself is not about the work Manafort did on the campaign. But Gates' testimony pits two former senior Trump campaign aides against one another. After Manafort left the campaign in August 2016 amid swirling questions about his Ukraine work, Gates stayed on the campaign and later helped found pro-Trump advocacy group, before he was ultimately forced out, too, as questions mounted about Manafort.