ALEXANDRIA, Virginia -- In August 2015, seven months before he became president Donald Trump’s election campaign chairman, Paul Manafort was hard up for cash.
Manafort's political consulting work in Ukraine had dried up following the ouster of Moscow-friendly President Victor Yanukovych the previous year, and he was scraping for new work with the Opposition Bloc, a successor to Yanukovych’s Party of Regions.
But the party’s financiers hadn’t paid him for his work months earlier, so his Ukrainian point man, Konstantin Kilimnik, wrote an e-mail to Manafort’s deputy, detailing how he would be getting the Opposition Bloc to pay.
"This is to calm Paul down," Kilimnik wrote to the deputy, Rick Gates on August 25, 2015.
Manafort’s precarious financial position was on full display on August 7 during the second day of testimony by Gates, who is the U.S. government’s star witness in the tax and bank fraud prosecution of Manafort.
The trial, which is being held in federal court in Alexandria, Virginia, is the first arising out of Special Counsel Robert Mueller’s investigation into the interactions between Trump associates and Russian officials and agents.
The 18 charges against Manafort predate his time working for Trump’s presidential election campaign beginning in March 2016. Though the charges concern money earned from the work he did in Ukraine for Yanukovych, they do not directly deal with Russia, or with questions of Trump aides' dealings with Russian agents.
Earliest this year, Gates pleaded guilty to similar charges that Manafort faces, and agreed to cooperate with prosecutors in their case against Manafort.
After Manafort joined Trump’s presidential campaign, he hired Gates to join the campaign as well.
During the August 7 proceedings, Gates testified on the multitude of Cyprus shell companies that he helped Manafort set up, largely to transfer payments from wealthy Ukrainian businessmen to his Cypriot and U.S. bank accounts.
Asked by prosecutors whether he was involved with Manafort in commuting the alleged crimes, Gates responded, "Yes."
One of the main focuses of prosecutors is how Manafort and Gates reclassified income from wealthy Ukrainian lawmakers as loans in order to reduce Manafort’s taxes in United States.
Gates told the court how Manafort's companies received payments from Ukrainian businessman Serhiy Lyovochkin. Manafort's bookkeeper classified the payment as a loan but Gates testified it was not.
In previous days, prosecutors had called a series of witnesses -- including a suit tailor, a home renovator, a real estate agent, and a landscape designer – seeking to demonstrate what they said was Manafort’s lavish lifestyle, which was funded allegedly from wire transfers from offshore accounts.
Prosecutors have said they intend to complete their arguments as early as next week. Once that happens, Manafort's defense team will present its case to try and convince the jury of his innocence.
If the trial continues quickly, it could wrap up before the second, more consequential trial against Manafort is scheduled to begin in September.
That trial, in federal court in Washington, D.C., focuses on allegations that Manafort failed to register as a foreign agent when he was working for Yanukovych and his political party.
While Manafort's case is the first that Mueller has brought to trial, the special counsel has charged 31 other people with dozens of offenses, including conspiracy, failure to register as foreign agents, and lying to federal law enforcement.
That includes 12 Russian military intelligence officers who allegedly used hacking and other tools in attempts to sway the 2016 U.S. presidential election.
In addition to Gates, others who have pleaded guilty to Mueller’s charges are Trump's first national security adviser, Michael Flynn.
Trump has repeatedly attacked Mueller's investigation, denying any effort by him or his associates to collude with Russian officials to sway the election.