Former top Donald Trump campaign official Rick Gates is expected to plead guilty in federal court – hours after prosecutors hit him with a comprehensive new indictment that accuses him as scheming to dodge millions in taxes.
Gates is expected to plead guilty to conspiracy and lying to investigators – serious federal charges but nevertheless only a fraction of the offenses the government has accused him with committing.
Gates met with prosecutors just weeks ago, but was not truthful in his description about what happened there.
According to a new government information filed by prosecutors, ‘Gates conspired to defraud the United States regarding the money he and his business partner Paul Manafort earned, and lied to the FBI in a February 1, 2018 interview about a 2013 meeting he’d had with Manafort and an unidentified lobbyist,’ the Washington Post reported.
The indictment doesn’t identify the lawmaker, but California Rep. Dana Rohrabacher has been identified as the only lawmaker Manafort met with that year.
Rohrabacher – one of the most outspoken Russia defenders in Congress – told the LA Times: ‘I assume when old friends call me up and are wanting to get reacquainted and stuff I always assume they are in some way under contract with somebody.’
Describing the meeting at the Capitol Hill Club in Washington, he said: ‘We discussed a myriad of things, a lot of personal stuff, a lot of different analysis of the politics of the day. It was a nice little dinner.’
The extent of the schemes Gates is accused of participating in are laid out in a new superseding indictment.
He is set to appear in court at 2 pm Friday.
Rick Gates, former campaign aide to U.S. President Donald Trump, departs after a bond hearing at U.S. District Court in Washington, U.S., December 11, 2017
Gates told family members and friends the ‘costs and the circus-like atmosphere of an anticipated trial are too much,’ CNN reported.
The latest indictment charges both Gates and Manafort with failing to disclose their work acting as foreign representative of the pro-Moscow government in Ukraine – then spells out detailed lobbying activities they engaged in.
In 2012 they solicited two firms – identified as Company A and Company B – about ‘representing the government of Ukraine in [Washington] D.C.,’ according to an email.
They then went about ‘hiding’ their lobbying and public relations work for Ukraine.In fact, they engaged in a ‘multi-million lobbying campaign’ on behalf of Victor Yanukovych’s government.
The indictment quotes an April 8 memo in to Yanukovych spelling out their ‘extensive’ lobbying activities.
‘They lobbied multiple Members of Congress and their staffs about Ukraine sanctions, the validity of Ukraine elections, and the propriety of Yanukovych’s imprisoning his presidential rival, Yulia Tymoshenko,’ according to the indictment.
They used an offshore account ‘to funnel $4 million to pay secretly’ for a report defending the prosecution of Yanukovych’s predecessor.
After the first indictment, NBC News identified Company A as Mercury Public Affairs and Company B as the Podesta Group, formerly headed by Tony Podesta, the brother of Hillary Clinton campaign chair John Podesta.
The potential guilty plea signals Gates is ready to cooperate with special counsel Robert Mueller’s investigators – which could in turn put more pressure on his longtime associate, former Trump campaign chair Paul Manafort.
Gates is expected to enter his guilty plea as soon as Friday afternoon, the New York Times reported, citing two sources familiar with his plea.
It was not immediately clear what charges Gates would cop to. The development comes after Robert Mueller delivered another bombshell Thursday, charging Gates and Manafort with running an elaborate scheme to launder $75 million and dodge tens of millions in taxes.
The 32-count indictment Thursday replaced an earlier 12-count indictment, piling on the tax fraud charges, and applying further pressure on both men.
Paul Manafort, former campaign manager for Donald Trump, is charged with shielding along with Gates $30 million from the feds
The new superseding indictment accused them of laundering $30 million out of a total of $75 million they had been paid, to avoid taxes.
A person familiar with his defense said Gates is mainly concerned with protecting his family, ‘both emotionally and financially,’ according to the Times. But by helping prosecutors, Gates – who is intimately familiar with the offshore accounts, clients, and work done by Manafort – could make the former top Trump aide’s situation more challenging.
The underlying charge is that the man who helped steer President Trump to the White House took extraordinary efforts to avoid paying his own taxes and turned in false tax returns to the IRS.
The new indictment lays out an elaborate scheme where the pair did business abroad for some unsavory clients – including the pro-Russian former Ukrainian regime – set up dozens of LLCs with offshore bank accounts in overseas tax havens, then wired money from them direct to companies they wanted to pay in the United States for their own lavish lifestyles.
Dramatic move: Robert Mueller’s bombshell indictment alleges that the man running Trump’s presidential campaign at the time of the Republican nomination was a tax cheat
They lied to the Treasury and IRS that they did not hold foreign bank accounts, and even lied to the people who prepared their taxes, the charges allege.
The pair also masked what was in fact income as loans to avoid paying taxes on it.
When the pro-Russian regime of Victor Yanukovych was deposed in Ukraine, the pair hit money troubles, so turned to mortgage fraud in the U.S., getting loans with the aid of bogus financial documents to ensure a supply of liquid cash.
The new charges hit the pair with conspiracy, fraud, and tax charges – with a total of 32 counts.
The new charges add to the initial 12-count indictment filed in October, and follows reports of lengthy talks with Gates over a possible plea deal.
The slapping of new charges on him appears to signal that talks have broken down – and brings down even more pressure for Gates to submit.
According to the government, more than $75 million flowed through offshore accounts set up by the pair.
Manafort, ‘with the assistance of GATES, laundered more than $30,000,000, income that he concealed from the United States Department of the Treasury (Treasury), the Department of Justice, and others,’ according to the charges.
The indictment continues: ‘GATES obtained more than $3,000,000 from the offshore accounts, income that he too concealed from the Treasury, the Department of Justice, and others.’
Among other revelations from the stunning 32-count indictment:
- The pair fraudulently secured $20 million in loans by inflating their balance sheet;
- Manafort ‘spent millions of dollars on luxury goods and services for himself and his extended family’
- They relied on offshore accounts in Cyprus, the Grenadines, and other tax havens;
- Manafort and Gates had a total of 33 US companies which had access to offshore accounts
- They ‘disguised, as purported ‘loans’ more than $10 million transferred from entities in Cyprus that were in fact income.
Disgraced: Attorney Alex Van Der Zwaan is expected to plead guilty on Tuesday to lying to Robert Mueller’s investigators
They are also charged with covering up the scheme. Gates is accused of lying to the IRS even after he had been charged by Mueller with money-laundering.
According to the indictment, ‘As recently as October 2017, in preparation for his amended 2013 tax filing, GATES was asked by his tax preparer: ‘Did you have any foreign assets/bank accounts during 2013 or 2014?’
His response: ‘No.’
Authorities combed through Manafort’s tax returns, concluding that from 2008 to 2014, he ‘represented falsely that he did not have authority over any foreign bank accounts.’
They also dug through Manafort’s array of real estate deals and loans using his homes in New York and Virginia as collateral.
He ‘falsely represented the amount of debt he had by failing to disclose on his loan application the existence of’ another mortgage on his Union Street [a $3 million townhouse in Brooklyn] home, for example.
The charging document also revealed that the two are alleged to have a ‘co-conspirator’ working for a bank – one who was involved in the mortgage fraud.
The charges allege: ‘When the document [a loan application] was first submitted to Lender B, a conspirator working at Lender B replied: ‘Looks Dr’d. Can’t someone just do a clean excel doc and pdf to me??’ A subsequent version was submitted to the bank.’
The array of charges follow a report in the DailyBeast that Gates has fired his lawyer, Tom Green of Sidley & Austin. Green is known as a deal-maker who has negotiated complex plea agreements.
Instead, Gates is now being represented by Barry Pollack of Miller Chevalier, now must contend with the litanny of tax and fraud charges against his client.
The latest court action comes just two days after a Russian oligarch’s son-in-law admitted lying to the FBI.
Alex van der Zwaan pleaded guilty at federal court in Washington D.C. in a plea deal with the special counsel.
The Los Angeles Times reported Sunday that Gates will himself plead guilty to fraud charges and will agree to testify against his longtime partner, Manafort.
But Thursday’s bombshell raises questions over whether that will now happen.
Court documents also disclose that Manafort and Gates are charged at federal court in northern Virginia, meaning Mueller has not one but two active grand juries.
There remains uncertainty over what is happening in the initial criminal case against Gates as the Daily Beast reported Thursday that he had fired the attorney who was seen as likely to make a deal with Mueller.
MANAFORT’S PROPERTY EMPIRE
NEAR TO THE SEAT OF POWER: BOUGHT FOR $2.75 MILLION
Manafort, who was educated in Washington D.C., has been a long-time resident on the other side of the Potomac, having previously lived in Mount Vernon.
He now owns a large condo in Alexandria, overlooking the river.
In January 2015 he and his wife bought the three-bedroom, 2.5 bathroom unit in this large condo block for $2.75million, through 601 NF Associates LLC.
The 2,779 square foot property is now estimated to be worth $2.9 million.
LOFT IN NEW YORK’S TRENDY SOHO: PAID $2.85 MILLION
As well as a place in the Trump Tower on 5th Avenue, the Manaforts own the entire floor of a SoHo building.
Public records show they bought it through one of Manafort’s LLCs, MC Soho Holdings, for $2.85 million in February 2012, with a mortgage for $1.5 million.
The two-bed, two bath property enjoys a huge living area, and sunny views in an area known for its designer clothes outlets and celebrity-friendly restaurants.
In March 2016, the couple became the formal owners of the property in their own name.
They have two mortgages outstanding on it now, both loans from Citizens Bank, totaling $2.042 million.
The court papers filed Monday show that he was renting it out on AirBnB and alleged that he told his son-in-law to mislead a mortgage appraiser that it was his second home.
BROWNSTONE IN BROOKLYN: $3 MILLION FIXER-UPPER
The Manaforts appear to be as much property investors as owners.
In 2012 one of his LLCs, MC Brooklyn Holdings LLC, paid $2.995 million for this four-story unit on Union Street in Carroll Gardens, one of Brookyln’s most prestigious areas. His investment was revealed by local blog, Pardon Me For Asking.
There are permits to turn it into a single-family house and work has been under way for some time although city authorities ordered work to be stopped in January this year, apparently because the applicant for permission to work had ‘withdrawn’.
This is likely to be linked to the change of ownership that month from Manafort’s LLC to him and his wife.
The property now has $6.8 million of mortgages taken out on it, made up of three separate loans all in the couple’s names.
Manafort told the New York Post that he plans to finish renovations by the end of the year, after neighbors complained about the state of the 22-foot wide brownstone.
LONGTIME HAMPTONS RETREAT: UNKNOWN MILLIONS
The Manaforts have owned this large detached property in Bridgehampton, on Long Island, since at least 1984.
It is an estimated 5,600 square feet, set far back from a quiet country road.
It puts the couple in walking distance of the beach and allows them access to the Hamptons social scene – although it is unclear how much the couple participate; the Hamptons can offer a very discreet summer retreat to those who do not wish to be widely seen.
An estimate for its value was not immediately available but a nearby 9,000 square ft property on a similar amount of land sold in 2014 for $11 million, suggesting that a price tag of $5m to $6m could be realistic as a starting point – but the huge investment in the home detailed in the Mueller indictment would have to be taken into account too.
THE PROPERTIES WHICH ARE SAFE… SO FAR
NEIGHBOR TO THE PRESIDENT: PAID $3.6 MILLION
Manafort bought his upper-floor apartment in Trump Tower in November 2006, using an LLC he controlled called John Hannah LLC.
Public records show a purchase price of $3.675 million. The condo is thought to be around 1,500 square feet, and the number of bedrooms and bathrooms is unclear.
Its estimated current value would be likely to be significantly higher.
It was only in January 2015 that the property was transferred from the LLC to direct ownership by the Manaforts.
But in April that year, the Manaforts took out a $3 million mortgage on the property with UBS.
CHINATOWN HOME FOR HIS DAUGHTER: PAID $2.5 MILLION
Manafort and his daughter Andrea bought a three-bedroom, three-bathroom condo apartment in a desirable part of Manhattan’s Chinatown in 2007 for $2.54 million.
Public records suggest that it was jointly purchased by Andrea, now 31, and Jesand Investment Corporation LLC, which is controlled by her father.
The 2,100 square foot home has three outdoor terraces, a built-in wine cooler, and is in a doorman building with its own gym and parking.
Andrea is no longer thought to live in New York but public records do not suggest the Manaforts have yet sold the property.
It was listed for sale in 2013 for $4.85 million and put on the market again for $2.6 million in 2014 but no sale appears to have resulted.
She married her husband Christopher Shand, an HR manager for a restaurant chain, in their native Washington D.C.’s St Regis hotel in May 2015.
FLORIDA HOME HANDY FOR MAR-A-LAGO: BOUGHT FOR $1.5 M
The Manaforts enjoy a waterside 4,000 square foot property in Palm Beach Gardens for a sunshine getaway.
They purchased it in September 2007 for $1.5 million and it is thought to have four bedrooms and four bathrooms.
The address is the one which appears to be most commonly used on company registrations for the Manaforts’ network of LLCs, suggesting it may be their most common place of residence.
It is in easy reach of Mar-a-Lago, the president’s ‘Winter White House’, which is around 20 minutes drive away.
$2.7 MILLION LOAN TO HELP SON-IN-LAW BUY BEL-AIR MANSION
The complexities of Manafort’s property deals involve his son-in-law Jeffrey Yohai, 35.
Public records show that Manafort loaned $2.71million to help yet another LLC buy a Bel-Air property with a 3,746 square feet two-story home set on 1.26 acres of land. It has views over the ocean, making it a prestigious property in one of Los Angeles’ most desirable areas.
The five bed, five bath house appears to have been bought by the LLC, which is one of house developer Yohai’s vehicles, for $8.5 million, public records suggest.
However Yohai went into Chapter 11 bankruptcy late in 2016, The Real Deal reported, and Manafort is now a creditor to his son-in-law, who had three other properties under development which are part of the bankruptcy petition.
DailyMail.com is not adding his $2.7 interest to the estimate value of his property portfolio.
Separately Yohai was involved in a legal case alleging that he was running a Ponzi scheme in New York.
THE D.C. POWER MANSION: SOLD FOR $1.4 MILLION
Sold: Five-bed, seven and a half bathroom property in Mount Vernon wet for $1.425 million in 2015
The Manaforts sold their long-time Mount Vernon mansion in June 2015 for $1.425 million.
The five-bed, 7.5 bathroom property had one of the area’s largest outdoor swimming pools and was where both their daughters were brought up.