Former Trump campaign official Rick Gates pleads guilty in special counsel investigation

Last Updated Feb 23, 2018 5:16 PM EST

Former Trump campaign adviser Richard Gates III pleaded guilty on charges of conspiring against the U.S. and of making false statements to the federal government. He is, reports Paula Reid, cooperating with the special counsel as part of his plea deal, and his plea offer says that his plea is contingent on his cooperation and testimony. Each of the two counts carries a maximum five-year penalty, which would be served consecutively, if he's convicted.

Gates, 45, appeared before Judge Amy Jackson Friday, accompanied by his lawyer, Tom Green. The special counsel's office was represented by Kyle Freeny, Andrew Weismann and Greg Andres. 

The former Trump campaign official pleaded guilty to two counts -- the first count, conspiring against the U.S., comes from the original October indictment of Gates and former Trump campaign chairman Paul Manafort. Gates is admitting that while he worked for the firm Davis Manafort Inc. (DMI), he helped Manafort defraud the U.S. by transferring and wiring millions of dollars from accounts overseas. This is income Manafort is accused of not reporting to the Treasury Department. 

Gates also admits that he helped Manafort mislead Manafort's tax preparer and did not disclose the accounts overseas, which had more than $10,000. He classified overseas payments as "loans," so that Manafort didn't have to pay taxes on them. Gates also did not report their existence on either tax or Foreign Bank and Financial Account Reports (FBAR). Gates admitted that he knew that it was illegal for a U.S. citizen to have an overseas bank account without reporting it to the IRS.

There is also the matter of the FARA charge -- Gates is admitting he failed to file as a foreign agent for lobbying work with Ukraine and President Yanukovych on the "Anti-Crisis Project" or the "AC Project" under the Foreign Agents Registration Act (FARA). He is connected with the use of an offshore account to pay $4 million for a negative report about former Yanukovych rival Yulia Tymoshenko. According to the plea, Gates and Manafort also came up with cover stories to conceal their lobbying efforts.

When the Justice Department contacted Gates and Manafort in September 2016 to see if they should be filing under FARA, DMI sent false and misleading letter back saying things like DMI "does not retain communications beyond thirty days" and that they "did not include meetings or outreach within the US." In fact, the two had weekly calls and frequent emails with the companies they were working for.

Gates is also pleading guilty to making false statements to the special counsel and FBI. On February 1, 2018 Gates lies to the special counsel's office and the FBI about the March 19, 2013 meeting between Manafort, a Company A lobbyist, and a member of Congress. Gates who was not at that meeting, lied saying that he was told Ukraine was not discussed at that meeting. But Ukraine was discussed, and he was told "that the meeting went well."

After Gates' court appearance Friday, Manafort released a statement reiterating his claim of innocence, and expressing disappointment in Gates' guilty plea.

'"Notwithstanding that Rick Gates pled today, I continue to maintain my innocence," Manafort wrote. "I had hoped and expected my business colleague would have had the strength to continue the battle to prove our innocence. For reasons yet to surface he chose to do otherwise. This does not alter my commitment to defend myself against the untrue piled up charges contained in the indictments against me."

The judge finally released Gates' original attorneys from the case. Tom Green, who has been working on a plea deal for Gates, is now his official attorney, Paula Reid reports. Gates does not want to put his young family through a lengthy public trial. Also, the enormous cost of defending himself against these charges is a factor in his desire to bring this legal battle to a speedy conclusion.

It is expected that Gates will have to serve a term of several months in jail and face financial penalties, but those details will depend on the extent of his cooperation with Mueller's team. He is currently facing dozens of years in prison if convicted on all counts.

The plea comes just after Gates was charged with new crimes Thursday in Mueller's probe. On Thursday, Mueller brought a new 32-count indictment against Gates and former Trump campaign chair Paul Manafort. The latest charges stem from work Manafort and Gates executed in Ukraine. The latest indictment says that they failed to pay taxes on such Ukrainian income, by "disguising it as alleged 'loans'" from offshore accounts. Those charges were filed in Virginia. 

The 12-count indictment filed against Gates and Manafort in Washington, D.C., also entailed their business scruples. Those charges include conspiracy to launder money and making false statements. 

Mueller is examining Russian election meddling in 2016 and any ties to Trump associates. Last week, Mueller's team brought charges against 13 Russians accused of intervening in the 2016 U.S. election through spreading misinformation on social media and traveling to the U.S to create chaos. 

CBS News' Paula Reid and Clare Hymes contributed to this report. 

This is a developing story and will be updated.