As a sober Gates recited his testimony, Manafort reacted about the way you'd expect.
Gates, who is awaiting sentencing, told jurors that he siphoned off the money without Manafort's knowledge by filing false expense reports. "At Mr. Manafort's request. we did not disclose the foreign bank accounts".
Gates told the jury of six women and six men on Monday that he had been ordered by Mr Manafort not to disclose foreign bank accounts in Cyprus.
In a court filing on Monday, prosecutors said they may call Federal Bureau of Investigation forensic accountants Morgan Magionos and Renee Michael to read from Manafort's emails. But instead of classifying those payments as "income", Gates and Manafort told his accountants and his bookkeeper, Heather Washkuhn, that the payments were actually "loans" in order to avoid $15 million in taxes over roughly a decade.
Manafort, a veteran lobbyist, has tried to get the financial charges against him dismissed and arguing that Mr Mueller has a "blank check" that he "has cashed, repeatedly".
Gates also told jurors that he cheated Manafort out of "several hundred thousand" dollars, which is likely to be a threat Manafort's attorneys pull on to try to undermine Gates' credibility with the jury.
Manafort and Gates were the first two people indicted in special counsel Robert Mueller's investigation into potential ties between Russian Federation and the Trump campaign.
He also said he lied in a deposition in a civil case against Manafort involving a private equity fund and wrote a letter saying his friend Steve Brown, who is facing fraud prosecution in a NY federal court, had income that didn't exist.
Gates is the government's star witness in its case against Manafort, who is accused of bank and tax fraud.
Mr Manafort, 69, could spend the rest of his life in prison if found guilty of all the fraud charges.
Manafort served as chairman of Trump's presidential campaign during the summer of 2016, and was forced out in August of that year amid news stories about his ties to then-Ukrainian President Viktor Yanukovych. But Trump has shown interest in the proceedings, tweeting support for Manafort and suggesting he had been treated worse than gangster Al Capone.
That's but a drop in the ocean of the roughly $30 million prosecutors are claiming Manafort hid from the IRS.
Both were indicted last October for hiding millions of dollars they made lobbying for Ukrainian politicians. Later, they say, when that income dwindled, Manafort launched a different scheme, shoring up his struggling finances by using doctored documents to obtain millions more in bank loans. It is alleged that Manafort earned millions of dollars, which he neglected to declare to the authorities. They sought to show jurors how that money flowed from more than a dozen shell companies used to stash the income in Cyprus. Laporta testified that she saw no evidence that the loan was ever repaid.
Rick Gates testified today that he committed crimes while working with Paul Manafort. But while Laporta acknowledged that she regularly communicated with Gates, she said she believed Manafort was in the know.
In one note read to the jury, Gates says Manafort wrote "WTF" and "not happy" about tax payments he was going to have to make.
Ms Laporta, looking at a summary of loans to Mr Manafort and his businesses, said she could not see any indication the loan from Mr Deripaska had been paid off.