Rick Gates testifies he and Manafort committed fraud, admits embezzling hundreds of thousands of dollars

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Report: Rick Gates set to testify in Manafort trial

Critical testimony expected at the trial of President Trump's former campaign chair as Manafort's right-hand man set to take the stand as early as Monday; reaction and analysis from James Trusty, former Justice Department prosecutor.

Rick Gates on Monday took the stand in the federal fraud case against his former business partner, ex-Trump campaign chairman Paul Manafort, testifying that he and Manafort conspired to commit bank and tax fraud -- and that he embezzled hundreds of thousands of dollars from Manafort.

The day ended with the judge in the case ripping into prosecutors, telling them to expedite their case. But earlier, federal prosecutor Greg Andres got the government's star witness to admit he committed crimes while working for Manafort.

“Did you commit crimes with Mr. Manafort?” Andres asked Gates after he took the stand.

“Yes,” Gates said.

Manafort, facing charges of bank and tax fraud related to his work in Ukraine, has pleaded not guilty to the charges.

Gates struck a plea deal with prosecutors to cooperate in the case against his former business partner. The usually bearded Gates appeared in court clean-shaven on Monday.

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Manafort case judge warns prosecutors they 'can't prove conspiracy' without Gates testimony. Peter Doocy reports.

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.

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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.

The trial is set to reconvene Tuesday morning. Andres, the prosecutor, said to expect another three hours of Gates testimony.

After the jury was dismissed for the day, there were fireworks as U.S. District Court Judge T.S. Ellis III lit into Special Counsel Robert Mueller’s team, telling the prosecution to expedite its case against Manafort.

During the back-and-forth, Ellis admonished the prosecutor for not looking at him while speaking. “Look at me! Don’t look down!”

Andres responded that he was looking at a relevant document, but the exchange got more heated. “You looked down as if to say: that’s B.S.!” Ellis said.

Gates' testimony is important for prosecutors: Ellis said in court last week they “can’t prove conspiracy” in the case unless prosecutors call Gates to the stand.

During opening arguments last week, the defense team made it clear they intend to blame Gates, who handled some day-to-day business operations for Manafort, for many of the alleged reporting deficiencies Manafort is charged with.

“Rick Gates had his hand in the cookie jar and couldn’t let his boss find out,” Manafort defense attorney Thomas Zehnle said during opening arguments.

Prosecutors have introduced a bevy of exhibits and are in the process of calling several witnesses as part of their effort to paint Manafort as a tax scofflaw who failed to report money spent on luxury items -- then lied to get bank loans when his foreign consulting work dried up.

The judge in the Paul Manafort trial reminded prosecutors on Friday of the high bar for conviction -- that they must prove the former Trump campaign chairman knowingly violated tax and bank laws related to his political work overseas.

Manafort served as chairman of Trump’s presidential campaign during the summer of 2016, and was forced out in August of that year amid news stories about his ties to then-Ukrainian President Viktor Yanukovych.

Earlier Monday, Ellis threatened to kick reporters out of the courtroom if they continue being “disruptive.”

“If you cause a disruption, I will have you excluded!” Ellis said.

MANAFORT CASE JUDGES ADMONISHES ‘DISRUPTIVE’ REPORTERS DURING TRIAL

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.

Ellis, a 78-year-old Reagan-appointed judge, is known for his colorful comments.

Fox News’ Serafin Gomez, Jake Gibson and The Associated Press contributed to this report.