Gates, who also served in a senior role in Trump's presidential campaign, read off the names of more than a dozen shell companies he and Manafort set up in Cyprus, St. Vincent and the Grenadines and the United Kingdom to stash the proceeds of Manafort's Ukrainian political consulting work.
Gates, who began working closely with Manafort in 2006, pleaded guilty to one count of conspiracy against the U.S.by avoiding taxes and one count of lying to investigators in February 2018.
Gates also testified that he embezzled "several hundred thousand" dollars from Manafort by submitting false expense reports that were paid out of some of the undisclosed foreign bank accounts in Cyprus.
The testimony is poised to pack even more drama into the courtroom than the 78 minutes Gates was on the witness stand a day earlier, as Manafort's defense team will get the chance to cross-examine Gates - and they've made clear the crux of their defense will be to blame Gates for Manafort's alleged crimes.
The accusations against Manafort and Gates mostly stem from their work helping to elect Viktor F. Yanukovych, the former president of Ukraine, and other pro-Russia forces in Ukraine, and to secure business ventures with the oligarchs backing those politicians. They were the first two people indicted by Mueller's grand jury.
Gates, Manafort's long-time business partner, is expected to face a tough cross-examination later on Tuesday by defense lawyers in the first trial to arise from Special Counsel Robert Mueller's investigation into Russian interference in the 2016 US election.
Trump insists Trump Tower meeting 'totally legal'
Trump Jr respond.ed "I love it", when first offered the political "dirt" on Clinton, the Democratic presidential nominee. Mueller is investigating Russian interference in the 2016 election and possible coordination with Trump campaign aides.
Manafort, 69, has pleaded not guilty to 18 counts of bank fraud, tax fraud and failing to disclose foreign bank accounts. Gates also said that they sometimes characterized payments as loans to mask income. Gates was copied in on Manafort's emails, attended events in Manafort's place and generally carried out his boss' wishes.
"Yes", Laporta said, "of course" she would call Manafort if she suspected Gates was enriching himself with Manafort's money. Mr Gates was Mr Manafort's partner in the consultancy.
The second week of the tax evasion and bank fraud trial of Paul Manafort kicked off Monday.
The prosecution did not cover much substantial ground Monday on its exhibit list with Gates before Judge T.S. Ellis III adjourned court for the day. Gates, who is facing five to 10 years in prison, testified Monday that as part of his plea deal he agreed to turn over evidence to the government and testify.
Aside from admitting to the false expense reports, Gates said he also created a fake letter to an investment company for a different colleague, Steve Brown.
Gates testified that Manafort directed him to report overseas income as loans in order to lower taxable income and that at Manafort's request, did not disclose foreign bank accounts, which is required by law. But Trump has shown interest in the proceedings, tweeting support for Manafort and suggesting that he had been treated worse than gangster Al Capone.
Some of the maneuvers were at the request of Gates, while others implicated Manafort, Laporta testified. One accounting trick saved Manafort $US500,000 in taxes, she said.