ALEXANDRIA, Va. – The courtroom showdown between Paul Manafort and his former right-hand man Rick Gates grew painfully personal Tuesday as a defense lawyer forced Gates, the prosecution's star witness, to admit he had a transatlantic extramarital affair and embezzled money to live beyond his means.
During his second day on the witness stand, Gates detailed the lies, phony documents and fake profits he claims to have engineered at Manafort's direction. Manafort, seated at the defense table, stared intently at his former protégé and business partner, who has assiduously avoided Manafort's gaze.
Gates' testimony is central to prosecutors' case as they seek to prove that Manafort, President Donald Trump's former campaign chairman, committed bank fraud and tax crimes. Gates has testified that most of his crimes were committed on behalf of his former boss, while others were self-serving. He pleaded guilty in February as part of a deal with special counsel Robert Mueller.
The most jarring testimony Tuesday came when Manafort's lawyer Kevin Downing questioned Gates. "There was another Richard Gates, isn't that right? A secret Richard Gates?" Downing asked.
The witness, who seemed to immediately understand the lawyer's hint, began speaking in a quiet, strained voice, saying that about 10 years ago, he had "another relationship" — an extramarital affair.
For about two months, Gates said, he kept a separate apartment in London and admitted he had flown first class and stayed in luxury hotels as part of that relationship.
Gates also admitted he embezzled from Manafort. When Downing asked if he stole as much as $3 million, Gates replied that he thought the figure was lower, but agreed that he had taken money from Manafort without permission.
Earlier in his testimony, Gates said he embezzled hundreds of thousands of dollars while working for Manafort.
Many of Downing's questions sought to buttress Manafort's central defense strategy — that Gates, not Manafort, is the real villain, a man who told so many lies and stole so much money he could not remember all of his illegal activity.
In one of the most heated exchanges, Gates compared himself favorably to Manafort, suggesting he had chosen a better path by cooperating with the FBI. "After all the lies you've told and fraud you've committed, you expect this jury to believe you?" Downing asked.
"Yes," Gates responded flatly. "I'm here to tell the truth," Gates said. "Mr. Manafort had the same path," he said, adding later: "I'm trying to change."
At other moments, Gates seemed reluctant to admit the extent of his wrongdoing. When Gates called a payment an "unauthorized transaction," Downing asked him, "Why can't you say embezzlement?" Gates replied: "It was embezzlement from Mr. Manafort."
Downing presented Gates with a document showing money transfers conducted between 2010 and 2014, some of them large dollar amounts out of Cypriot accounts where Manafort kept his money. Gates acknowledged the list included "unauthorized transfers," but could not specify which ones.
At one point, Gates said the document lacked enough detail for him to offer better answers. But the line of questioning prompted him to say repeatedly that he did not recall the money transfers in question — transactions, Downing claimed, about which the special counsel had previously asked Gates. Downing said Gates' memory appeared much clearer when it was a prosecutor asking questions.
"Have they confronted you with so many lies you can't remember any of it?" Downing asked.
Downing accused Gates of swiping money from Manafort's firm to make trips to Las Vegas, to buy sound equipment and to shop at a Whole Foods grocery store in Richmond, Va., where Gates lives with his family. Gates said he did spend the firm's money on those things but that he did not believe it came from offshore accounts. The Las Vegas trips were for a movie production venture, he said.
Gates said he wrote a letter falsely claiming his company would invest a large sum of money in a friend's movie project. "I did it as a favor," he said.
"You committed fraud as a favor?" Downing asked.
"I did; I admitted to that," Gates responded.
At another point, Gates conceded he might have swindled the Trump inaugural committee as well. When Downing asked if he submitted personal expenses for reimbursement, Gates replied, "It's possible."
Downing moved quickly from one topic to the next, and at times the witness seemed confused as to which fraudulent activity was being discussed.
The strategy worked at least once, when Gates contradicted himself within a matter of minutes. Asked about a series of wire transfers, Gates testified that he submitted a false invoice for "professional services" to an offshore bank to initiate a transfer of $65,000 from the Manafort-controlled Global Endeavor Inc. to a different company, and from there into Gates' account.
Gates tripped up as he explained the reason for these transfers, repeatedly agreeing that some of the money was unauthorized but also saying the transfers were reimbursements for business expenses while some were bonuses from Manafort.
Downing asked why Gates would call these transfers reimbursements. "I was, in essence, living beyond my means," Gates replied.
Gates worked for Manafort for more than a decade before the pair were indicted last year on bank fraud and tax charges.