Downing then asked about what he called "the secret life of Rick Gates", inquiring whether Gates kept an apartment in London and if he engaged in an extramarital relationship there.
Manafort's lawyer suggested that the affair - which included a London pad, first-class plane trips and luxury hotels - cost up to $3 million.
Downing said an admission of that kind by Gates could lead the special counsel's office to tear up his plea agreement, which is contingent on his truthful testimony during the criminal trial of Manafort, Trump's former campaign chairman. Instead, prosecutors for Mueller have accuse Manafort of hiding at least $30 million that he earned while representing Russia's neighboring country of Ukraine and its president, Viktor Yanukovych, an ally of Russian President Vladimir Putin. The defense asserted in its opening statement that Gates could have committed the bank fraud, tax fraud and foreign banking crimes that form Manafort's charges. "Mr. Manafort had the same path", Gates said.
On Tuesday, Gates was forced to answer questions about past infidelity, his embezzlement and what Manafort had directed him to do while in his employment.
The topic came up as Kevin Downing, Manafort's defense attorney, hammered away at Gates' admitted habit of filing doctored expense reports in an attempt to paint Gates as self-motivated and untrustworthy.
"He always had control over the accounts", Gates said of Manafort, and the income was not reported to his bookkeepers, his accountants or the U.S. tax authorities.
Prosecutors also say the men falsified documents to lie to banks in order to qualify Manafort for loans.
In a final back and forth between lawyers over Gates's credibility, the focus turned to his decision to plead guilty and cooperate with special counsel Robert Mueller's investigation, which Manafort's defence have portrayed as an attempt to save his own skin.
"I'm here to tell the truth", Gates replied.
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Gates walked into a packed courtroom a day after he calmly acknowledged having embezzled hundreds of thousands of dollars from Manafort and said the two had committed crimes together by stashing money in foreign bank accounts and falsifying bank loan documents.
Manafort, who served briefly as Trump's campaign manager in 2016, has pleaded not guilty.
For most of his testimony, Gates did not look at Mr Manafort, while the defendant stared intently at his former partner.
Downing also ventured into territory the two sides have mostly avoided: discussion of Donald Trump's presidential campaign.
The 46-year-old former political consultant told jurors how Manafort asked for tickets to Trump's inauguration so he could give them to a banker involved in approving a loan at the center of his financial fraud trial. Gates said that these loans were actually income. But Trump has shown interest in the proceedings, tweeting support for Manafort.
Cindy Laporta, a tax accountant for Manafort, testified Monday under immunity that she helped file falsified bank loan applications for him even though she knew they were inaccurate. Gates said the money he took was sent to his account in the United Kingdom and was never disclosed to his accountants or the US government.
More recently, after the launch of the Mueller investigation but before his plea bargain, Gates lied to the FBI about a meeting between Manafort and an unnamed US Congressman regarding a "specific issue". Gates testified they were not loans but compensation to Manafort.
Update from the Paul Manafort trial: Rick Gates admitted... everything in testimony yesterday.
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.