Manafort's lawyer suggested that the affair - which included a London pad, first-class plane trips and luxury hotels - cost up to $3 million.
Ex-Trump campaign adviser Paul Manafort's defense seeks to discredit the Mueller team's star witness during cross-examination; Peter Doocy reports on the bombshell day in court. And Manafort made millions of dollars working as a political consultant for a pro-Russia party in Ukraine before he worked for the Trump campaign, which could raise questions about Trump's friendly rhetoric towards the country. On Monday, he testified that he helped Manafort file false tax returns and hide his foreign bank accounts.
Manafort to Gates in 2015, "WTF?"
Manafort defense attorney Kevin Downing tried to confront Gates over whether he had engaged in four extra-marital affairs and failed to disclose them to prosecutors before becoming a witness for the government.
The accountant testified she was unaware if the loan was recognized as income or ever paid back.
Prosecutors have noted that Gates and Manafort were not the targets of the investigation at the time of the interview.
Gates (46) admitted he had embezzled from other employers; he had volunteered the information once he began cooperating. Gates has already pled guilty to two counts in Mueller's probe and testified against Manafort as part of a plea deal with the special counsel's office.
"The only answer I was told was to tell the truth", Gates said. Gates recounted how he and Manafort used more than a dozen offshore shell companies and bank accounts in Cyprus to funnel the money, all while concealing the accounts and the income from the IRS.
Manafort and Gates were the first two individuals indicted in Mueller's investigation into potential collusion between Russian Federation and the Trump campaign.
Prosecutors had intentionally left many of these pieces of evidence blank on an itemized list of documents they are presenting in court, signaling they could be the most sensational and attention-grabbing files in the evidence binder.
Prosecutor Greg Andres pointed out he had created a "loan forgiveness letter between Mr. Manafort and Mr. Manafort".
In his first hour on the witness stand, Rick Gates catalogued years of crimes, saying most of his wrongdoing was committed on behalf of his former boss Mr Manafort, while other crimes were for his own benefit, including the theft of hundreds of thousands of dollars. However, the Manafort case - as President Donald Trump has been quick to point out - focuses on Manafort's business dealings and has no direct connection to Manafort's work with the Trump campaign. Both sides agreed ahead of time to limit discussion of the campaign so as not to prejudice the jury, though they had agreed to allow testimony about the overlap of a bank loan with Manafort's role in the campaign.
After saying Monday that he committed crimes with Manafort, including concealing offshore accounts to avoid reporting them to the USA government at tax time and claiming false income to get loans, Manafort defense attorney Kevin Downing asked the witness, "This jury is just supposed to believe you after all the lies that you've told and the fraud you've committed?"
In October 2016, for instance, Gates sent Manafort DMP's profit and loss statement (P&L) from January 1 through June 30 of that year, emails introduced in court Tuesday show. His wife is "aware of" the affair and knew about the account where he sent money he embezzled from Manafort, he said.
For this Manafort was paid US$4million a year, in quarterly payments of US$1million, Gates recalled, though at some point the currency switched from USA dollars to Euros.
And Gates faced fraud charges from the special counsel after it discovered he had written a letter to a Swiss movie production company falsely claiming that his own production company was investing in a film project by his friend, Steve Brown.