Accountant testifies she helped Manafort falsify tax returns

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Laporta also testified about two additional loans for a combined $1 million that she said had no supporting documentation.

Laporta, who filed Manafort's tax returns beginning in 2013, had been granted immunity to testify - a move that suggested she may have been complicit in some of the alleged financial crimes Manafort has been charged with.

Manafort's trial, being held in USA 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.

Friday began with testimony from Ayliff, who handled Manafort's tax preparations before retiring and turning them over to Laporta.

Ultimately, she listed the loan at $900,000, but prosecutors didn't disclose the original amount.

"It's hard-hitting testimony that creates an uphill battle for the defense, but that's what cross examination is for", said Andrew Boutros, a former federal prosecutor who is now a white collar defense lawyer.

The defense has argued that even if Manafort did direct the effort to inflate his income on his loan applications, it doesn't prove that he willfully broke the law.

Laporta confirmed she was testifying under immunity because of the fear that she could be prosecuted for her actions. Five of the 18 counts he faces relate to filing false tax returns.

One way to do that could be to show that documents Manafort had provided to the accountant contained details about foreign bank accounts.

The testimony about Manafort's financial problems came after a string of witnesses walked jurors through the millions of dollars he spent on landscaping, home improvement and what a landscaper described as one of the biggest ponds in the Hamptons.

"You're going to learn that Mr. Manafort was never audited by the IRS, nor were any of his companies".

"He was trying to reduce income and therefore, income taxes", Laporta testified.

"The plan for Paul Manafort is to ensure that he dies behind bars".

They have "every intention" of calling him as a witness, prosecutor Greg Andres said Thursday. It was later signed by a "Georgia Chystostomides". Yet she passed it on to Citizen's Bank, according to the emails and her testimony. Asked why such accounts would be important to a tax-preparing accountant, Laporta said the information would be necessary to properly account for income, any possible foreign income taxes owed, and for FBAR purposes - because the penalties were severe for noncompliance with the federal foreign account reporting regime. She says she could tell the document was falsified because the fonts were off and words were misspelled, including the month of September. "I wanted it to be the client's document".

Prosecutors say Manafort used the offshore bank accounts, based mainly in Cyprus, to purchase millions of dollars of goods and services directly so he could avoid paying taxes on the money he received for political consulting work he did in Ukraine.

"I could have called Mr. Gates and Mr. Manafort liars", she acknowledged. She testified that in 2016, Manafort lied to banks about how much money he made and sent them phony invoices. The defense has sought to blame Gates for any illegal activity. "But Mr. Manafort was a longtime client of the firm, and I didn't think I should do that". Asonye asked. Ayliff said no.

"Only a fool would give that information to his accountant if he was trying to hide it from the IRS", Downing said, referring to whether the accountant had names of the Cyprus-based entities in his files and had retained them for his records. But attempts to verify the loan's terms were futile.

Manafort's trial is the first to make its way to jurors after indictments by special counsel Robert Mueller. Such accounts must be reported to tax authorities if they contain $US10,000 or more. Once that happens, Manafort's defense team will present its case to try and persuade the jury of his innocence.

In another email, this one from Manafort to Laporta, the defendant allegedly wrote, "see below for my answer" and "see answers below".

Some US lawmakers said shutting down the investigation early would be a mistake.