They have tried several times to impugn his credibility before the jury.
That is expected to continue on Wednesday - and then prosecutors are expected to have an opportunity to question Gates again and try to rehabilitate him. He also admitted to embezzling money from other employers in the past.
"They were documented as loans, but in reality they were funds moving between the accounts".
Gates testified Tuesday that Manafort hit the roof when faced with an enormous tax bill. He testified that he and Manafort knew they were committing crimes for years, concealing money in foreign bank accounts and falsifying bank loan documents.
Manafort was Trump's campaign chairman in summer 2016 but resigned before the election. Gates said the money he took was sent to his account in the United Kingdom and was never disclosed to his accountants or the USA government. Gates also provided the first witness testimony that overlaps with Trump's presidential campaign. But prosecutors dropped charges against Gates after the former business partner took a plea deal and agreed to cooperate with prosecutors.
The case has little to do with either man's work for the Trump campaign and there's been no discussion during the trial about whether the Trump election effort coordinated with Russian Federation - the central question Mueller's team has tried to answer.
Kevin Downing, an attorney for Manafort, accused Gates of having a "separate, secret life" with his lover in London and of using business expenses to pay for the affair, including an apartment in London.
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 proved essential to prosecutors' attempt to tie Manafort to the dozens of foreign bank accounts in Cyprus, the United Kingdom, and St. Vincent and the Grenadines where he allegedly hid millions of dollars of taxable income from the IRS for almost a decade.
Everything you need to know about the Saudi Arabia-Canada fallout
When asked about the contract, Freeland said the government "looks forward" to hearing from Riyadh about the future of the deal. Earlier this week, Riyadh froze all trade and education ties with Canada and expelled the country's ambassador to Saudi Arabia.
While Gates endured his second day on the witness stand on Tuesday, he also recounted the many legally troubling falsehoods he resorted to while working alongside Manafort.
He said 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. He told jurors he embezzled from Manafort by filing false expense reports.
The charges largely predate the five months Manafort spent on Trump's campaign.
During questioning by prosecutors on Tuesday morning, Gates said that Manafort had emailed him in late 2016 asking for the incoming Trump administration to consider tapping Federal Savings Bank Chief Executive Steve Calk for Secretary of the Army. At one point, as Gates had trouble recalling the details of his confession, Downing asked him, "Have they confronted you with so many lies that you can't even remember them?"
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.
Gates said it was a "very common method" for Dr. K and that, once the money was moved into the accounts, Manafort decided what to do with it. In addition, he testified, he did not submit the required forms at Manafort's direction.
Mr Gates told jurors that he had been "tasked" by his boss "to determine how we could lower the taxes".
"Like, Manafort must have been so mad but also at the same time so proud".
Gates converted the 2015 DMP P&L to a Word document for Manafort, but there were spacing, font, and other discrepancies between that copy and the original.
Prosecutor Greg Andres pointed out that he had created a "loan forgiveness letter between Mr. Manafort and Mr. Manafort".