Rick Gates tells court how Manafort's Ukraine income was hidden overseas

By On August 07, 2018

Rick Gates tells court how Manafort's Ukraine income was hidden overseas

Rick Gates, Paul Manafort’s former business associate, explained to a federal court Tuesday how they both used entities controlled by Manafort in Cyprus to house the millions made from political consulting work in Ukraine.

Testifying for the second day in Alexandria, Va., Gates described how he would help to prepare consultancy agreements between offshore entities Manafort controlled and shell companies that were created by Ukrainian billionaires for the purpose of facilitating payments between the two.

The entities Manafort controlled received payments from the Ukrainian oligarchs for Manafort’s policy and political consulting work. Some of those payments were made in euros, while others were made in U.S. dollars.

[More: Rick Gates tells court he engaged in crime spree with Paul Manafort and stole from him too]

Gates told the court that the entities, created in Cyprus and controlled by Manafort, did not sell any products or have employees, but rather were designed to accept payments from the Ukrainian oligarchs and make payments.

The entities were created by a law firm in Cyprus that Manafort hired, which also came up with most of the names of the offshore companies.

Neither Manafort’s bookkeepers nor his tax preparers knew of the offshore entities, Gates said.

Gates told the jury he first learned Manafort had Cyprus accounts when he began working for him and recalled meeting the man who set them up, referred to in court as “Dr. K,” in Cyprus. Gates held a series of meetings with Dr. K and Manafort, and told the court he began to understand there was some secrecy involved with the offshore entities.

The person who controlled the company, Gates said, was not involved in any of the paperwork, and Dr. K's Cyprus-based law firm handled the affairs.

Gates, the star witness for the prosecution, also detailed how Manafort’s work for Ukrainian President Viktor Yanukovych dwindled after Yanukovych lost power. Manafort entered into a contract with political consulting for Yanukovych for $4 million, later changed to 4 million euros, but Manafort’s income dried up.

After Yanukovych lost power, Gates said, “it decreased the income share” because there was a change in the political structure in Ukraine.

Gates said Manafort’s financial situation “substantially decreased" around July 2015 and said Manafort was having trouble paying his bills. His consulting firm, Davis Manafort Partners International, was no longer doing work in Ukraine, and the firm also did not have any clients, Gates said.

The firm was trying to secure as a client the Opposition Bloc, another Ukrainian political party. It was als o difficult for Manafort to obtain payments for the work Manafort had done, Gates said.

After maintaining the Cyprus bank accounts, Gates told the court that Manafort began to become concerned with having his name attached to them. Manafort’s name was subsequently removed, and his foreign bank accounts moved to Saint Vincent and the Grenadines.

Manafort is facing 18 counts of bank and tax fraud.

Gates took the stand Monday afternoon, and prosecutors estimate his testimony would go through Tuesday morning.

Source: Google News Ukraine | Netizen 24 Ukraine

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