Special counsel Robert Mueller’s team said Wednesday it may not put Rick Gates on the stand to testify against his former business partner Paul Manafort.
While prosecutors said they’re still deciding, a move to keep Gates off the stand would be stunning since he was expected to be the star witness against Mr. Manafort, a former Trump campaign chairman on trial for bank and tax fraud.
By not calling Gates, prosecutors could avoid putting him in the direct crosshairs of Mr. Manafort’s attorneys. On Tuesday, defense attorney Thomas Zehnle blasted Gates in his opening statement. He called Gates a thief and a liar who embezzled millions from Mr. Manafort’s company and then committed financial fraud to cover it up.
Mr. Zehnle also alleged Gates, not Mr. Manafort, was responsible for the crimes prosecutors have lodged against his client. Defense attorneys could still call Gates as a witness, but that could prove challenging with the ability to attack his initial testimony on behalf of the prosecution.
The stunning disclosure came as prosecutor Uzo Asonye was questioning an FBI agent about a financial document apparently authored by Mr. Gates. Judge T.S. Ellis III interrupted the testimony to ask why the agent was discussing the memo and not its supposed author.
“He may testify in this case, your honor, he may not,” Mr. Asonye said.
Journalists and others immediately scrambled out of the courtroom to the report the revelation, amusing Judge Ellis.
“That’s news to me and about 25 others who scurried out of here like rats on a sinking ship,” Judge Ellis shot back.
Mr. Asonye attempted to backtrack, telling Judge Ellis that evidence presented will determine which witnesses testify.
But that only elicited a sharp rebuke from the judge.
“You know who you are going to call,” he said. “If you are going to call Mr. Gates, this is a waste of time.”
The Gates disclosure largely overshadowed the second day of Mr. Manafort’s trial in Alexandria, Virginia. Prosecutors spent most of the afternoon detailing the former political operative’s opulent lifestyle, spending millions on luxury clothes and automobiles with much of it paid with wire transfers from offshore bank accounts.
Maximillian Katzman described Mr. Manafort as one of his “top five clients” at the Midtown Manhattan upscale menswear shop where he used to work. Between 2010 and 2014, Mr. Manafort spent more than $900,000 on suits and other luxury items at the store, including $444,160 in 2013 alone. He said most customers paid by check, but Mr. Manafort was the only client who paid using wire transfers from foreign bank accounts.
Prosecutors have said those accounts, set up in Cyprus and other countries, were used by Mr. Manafort to avoid paying taxes on the millions of dollars he earned from his lobbying work in Ukraine.
Daniel Opsut, who works at an Alexandria Mercedes-Benz dealership, said Mr. Manafort’s wife, Kathleen Manafort, bought a new 2013 Mercedes-Benz SL550 for about $123,000. The car was paid, in part, from a bank account in Cyprus.
Mr. Opsut said paying from offshore accounts is uncommon, but “not unheard of.”
Other witnesses, including an accountant for another high-end clothing retailer, construction contractor and realtor, shared similar stories about millions of dollars in purchases paid for with overseas bank accounts.
Wayne Holland, a longtime neighbor of Mr. Manafort and realtor, said Mr. Manafort bought his daughter Andrea a house in Arlington, Virginia, for $1.9 million. Mr. Holland said the house was paid for through a company called Lucicle Consultants Limited, a shell company in Cyprus.
Judge Ellis quickly became frustrated with the repetitive testimony. On more than one occasion, he scolded prosecutors for spending too much time on Mr. Manfort’s lifestyle.
“I understand this effort to show that he lived lavishly, but at some point it’s not relevant,” he told prosecutor Greg Andres.
Two witnesses testified that invoices linked to them were inaccurate, sparking an odd mystery prosecutors did not explain.
Mr. Katzman was shown a bill purportedly sent from his store, Alan Couture, that he identified as fake. He said the store’s name was incorrectly spelled as Alan Corture and had the wrong Zip code.
The bill was sent to a company called Global Endeavor, but Mr. Katzman was unaware of the company.
“We have never billed to Global Endeavor, nor had a client named Global Endeavor,” he said.
Defense attorney Jay Nanavati appeared to indicate that Gates was responsible for the fake invoices. He asked Mr. Katzman if he knew of Gates’ “level of education and spelling abilities.”
Mr. Katzman said he didn’t and had never met Gates, although he did email him when he was unable to reach Mr. Manafort.
Construction contractor Stephen Jacobsen later said a bill sent to Global Endeavor had the imprint of his company’s logo. But said the $130,000 bill did not include an address and was for architecture and design work, which he did not do.
While jurors were hearing about Mr. Manafort’s spending habits, President Trump defended his onetime campaign chairman. Mr. Trump said Mr. Manfort is being treated worse than Al Capone.
“Looking back on history, who was treated worse, Alfonse Capone, legendary mob boss, killer and ‘Public Enemy Number One,’ or Paul Manafort, political operative & Reagan/Dole darling, now serving solitary confinement – although convicted of nothing?” Mr. Trump tweeted.
The president misspelled Mr. Capone’s first name, Alphonse. He served 11 years in a federal prison on income tax evasion charges.