Manafort, who managed Donald Trump’s presidential campaign, faces 18 charges of bank fraud, tax evasion and failing to disclose foreign bank accounts.
The 69-year-old denies all charges but could spend the rest of his life in jail if convicted.
The case is not related to alleged meddling in the US election or possible collusion with Russia.
Gates, who was a senior Trump aide and Manafort’s deputy, has already admitted two felony charges (financial fraud and lying to investigators).
He has agreed to cooperate with Special Counsel Robert Mueller in his investigation.
He told jurors on Monday that he had embezzled hundreds of thousands of dollars from Manafort and that the two had committed crimes together.
He said millions of dollars had been concealed in foreign bank accounts, listing shell companies he and Manafort set up in places including Cyprus and the UK.
Gates admitted lying to hide the accounts and said that, under Manafort’s instructions, he would classify any earnings as either a loan or income with the aim of reducing Manafort’s tax burden.
He also said that he had falsified loan applications and other documents to help his boss get bank loans.
The charges relate to Manafort’s work for Ukraine’s former pro-Kremlin president, Viktor Yanukovich.
Prosecutors say this work resulted in earnings of around $60m (£46m) and that a significant percentage of this was omitted from Manafort’s income tax returns.
They also allege that when that income began to fall away, Manafort turned to using falsified documents to get bank loans.
The jury has already heard about Manafort’s lavish lifestyle, which famously included owning a $15,000 ostrich jacket.
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.
He has also sought to blame Mr Gates for the crimes.
While the case has nothing to do with either man’s work on the Trump campaign and the charges mostly pre-date that time, the US president has shown interest in proceedings.
He has tweeted support for his former campaign manager, suggesting he has been treated worse than gangster Al Capone.
Manafort has a second trial scheduled for September involving allegations that he acted as an unregistered foreign agent for Ukrainian interests and made false statements to the US government.
News Source SkyNews