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Manafort hid millions earned in Ukraine
Journal Staff Report

WASHINGTON, Aug. 6 - A longtime business partner of President Donald Trump's former campaign manager Paul Manafort has detailed how he helped Manafort hide millions of dollars that he earned from Ukrainian clients in his first day as a star witness in Manafort's trial, RFE/RL reported.

Rick Gates testified on August 6 in a U.S. court outside Washington that wealthy Ukrainian businessmen paid Manafort millions of dollars for his political consulting work in Ukraine through wire transfers to accounts based mostly in Cyprus that were set up for Manafort.

Prosecutors allege that Manafort committed tax fraud by failing to report a "significant percentage" of the more than $60 million they say he received from his Ukrainian clients.

Gates testified about the payment scheme he said Manafort directed him to use, saying that Manafort had told him "the Ukrainian businessmen...had directed him to set up Cyprus accounts" as cover for their payments.

"At Mr. Manafort's request, we did not disclose foreign bank accounts" to U.S. tax authorities, said Gates, who himself is a former senior Trump campaign aide who pled guilty earlier this year to conspiracy charges and is cooperating with prosecutors in hopes of getting a reduced sentence.

Gates testified that both he and Manafort had control over the foreign bank accounts where the Ukrainian money was deposited.

Another person given control over the accounts, Gates testified, was Konstantin Kilimnik, a political consultant and close business associate of Manafort who was indicted in June on charges of intimidating witnesses in connection with Manafort's case.

In court filings, U.S. Special Counsel Robert Mueller has accused Kilimnik of having ties to Russian intelligence services, an allegation he has denied.

Beyond directing that payments from Ukrainian clients be deposited into Cyprus bank accounts, Gates testified that Manafort told him to report his overseas income as loans to lower Manafort's taxable income -- a point that supported previous testimony provided by Manafort's accountant.

"When income came into the company, Mr. Manafort directed whether it would be treated as income...or loans," Gates said. Reporting earned income as a loan is considered tax fraud under U.S. law. (rfe/ez)




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