Rick Gates, who has turned on former boss Paul Manafort to testify they committed bank and tax fraud together, returned to the stand for several more hours of testimony in federal court on Tuesday.
Gates, testifying as part of a plea deal, said Tuesday that Manafort would fraudulently classify certain wire transfers as loans to reduce the amount of taxable income in a given year. Manafort, with his arms folded, has been staring daggers at his former deputy during the testimony.
Before proceedings began in the morning, prosecutors said they expected three more hours of testimony from Gates, considered the star witness in the high-profile fraud case against Manafort, the former chairman of the Trump campaign.
Manafort, 69, faces tax evasion and bank fraud charges as he is accused of hiding a “significant percentage” of income earned from his Ukrainian work from the IRS. He also is accused of fraudulently obtaining millions more in bank loans, including while he was working on the Trump campaign.
Manafort has pleaded not guilty to the charges.
But Special Counsel Robert Mueller’s team is running into trouble as the famously-prickly judge in the case, U.S. District Judge T.S. Ellis III, lashed out again at the prosecution.
After jurors were dismissed for the day Monday, Ellis got into an extended verbal debate -- lasting about 10 minutes -- over the merits of the prosecution, the length of the case and even the eye contact of prosecutor Greg Andres.
Ellis specifically pushed Andres on why the prosecution was moving slowly with Gates, as well as why the prosecution is focusing on the link between wealthy Ukrainian politicos and Manafort. Ellis argued that the connection was not the basis of the case.
“What matters are the allegations that he made money from them and didn’t report it,” Ellis said. “You don't need to throw mud at these people.”
“I don’t know if they are bad or good. And I don’t care,” Ellis added, reiterating his previous claim that the prosecution seemed to be focusing not on the actual charges but on what he considered “political contributions.”
The most heated moment of the debate, however, took place when Ellis got perturbed by Andres not looking up at him while speaking.
“Look at me! Don’t look down,” Ellis demanded.
Then, when Andres responded that he was looking at a relevant document, the exchange grew testier.
“You looked down as if to say ‘that’s B.S.!’” Ellis said. “I’m up here!”
Held in Alexandria, Virginia, the case is the first for Special Counsel Robert Mueller since his appointment to oversee the Russia investigation in May 2017. It started on July 31 and is expected to last about three weeks.
Both Manafort and Gates were indicted last October, accused in a multimillion-dollar money-laundering conspiracy tied to lobbying work for a Russia-friendly Ukrainian political party.
Mueller dropped the 22 tax and bank fraud charges against Gates after the former business partner of Manafort agreed to plead guilty.
During his testimony Monday, Gates testified that he and Manafort conspired to commit bank and tax fraud -- and that he secretly embezzled hundreds of thousands of dollars from Manafort while working for him.
During his testimony, Gates read out loud the language from his indictment charging him with conspiracy and making false statements to the government.
“Who did you conspire with?” the prosecutor asked.
“Paul Manafort,” Gates replied.
Gates testified that he and Manafort under-reported income and failed to file FBAR, or Foreign Bank Account Report, forms.
Gates said that Manafort requested “over the years” that Gates make wire transfers from foreign accounts “primarily in Cyprus,” and those funds were not reported.
Gates also testified that he lied to Manafort’s bookkeeper and accountants.
He replied “yes” when asked if he knew it was a crime not to file those reports.
Gates also admitted to embezzling “several hundred thousand” dollars from Manafort while working for him.
Earlier Monday, the judge in the case also took aim at journalists, threatening to kick reporters out of the courtroom if they continue being “disruptive.”
“If you cause a disruption, I will have you excluded!” Ellis said.
The warning came after multiple reporters rushed out of the courtroom at the same time Monday after it was announced that Gates would testify Monday.
Under rules, reporters covering the trial cannot use phones or laptops in the courtroom and must go outside to transmit news from inside.
Fox News’ Peter Doocy, Serafin Gomez, Jake Gibson, Kaitlyn Schallhorn and The Associated Press contributed to this report.