Rick Gates, who held a senior role in Donald Trump's presidential campaign, is often described as Manafort's "right hand man". Gates was also charged in the case, but he made a deal with Special Counsel Robert Mueller's office to plead to a lesser charge in exchange for his cooperation.
As Gates testified in a calm, dispassionate way about the crimes he says he and Manafort committed together (as well as crimes he says Manafort didn't know about, including embezzling hundreds of thousands of dollars from him), Manafort appeared to be looking directly at his former colleague.
The defendant's lawyers say Rick Gates embezzled millions of dollars from Mr Manafort's consulting firm. They were the first two people indicted by Mueller's grand jury.
Gates is testifying in Manafort's trial on bank and tax fraud charges in a packed federal courtroom in Alexandria, Virginia, in a case stemming from the special counsel's investigation.
His testimony represents the biggest test yet for Mueller's investigation even though this case does not directly play into the issue of alleged cooperation by the Trump campaign in Russian election interference.
Manafort has pleaded not guilty to 18 counts of bank and tax fraud and failing to disclose foreign bank accounts.
He has also sought to blame Mr Gates for the crimes.
But Tuesday, Manafort did not stare Gates down.
When the trial broke for lunch Tuesday, Manafort looked back at his wife, sitting in the front row, smiled and winked at her, followed by a quick shake of his head, seeming to indicate he was unfazed or unbothered by the morning's testimony.
Trump hasn't tweeted about Manafort since the first day of the trial last week, and the trial itself is not about the work Manafort did on the campaign.
The jury heard testimony on Friday and Monday (local time) from accountant Cynthia Laporta, who described how Mr Manafort and Mr Gates doctored financial statements and backdated loans.
Prosecutors showed contracts laying out that Manafort would be paid $4 million a year in quarterly installments of $1 million, all channeled through Cyprus.
Paul ManafortPaul John ManafortGates testifies he committed crimes with Manafort Trump reversal on Russian meeting raises pressure on interview If Trump meeting is illegal, then Clinton dossier is criminal too MORE's longtime business associate Richard Gates testified Tuesday that he and Manafort used offshore shell companies and accounts in Cyprus to disguise millions of dollars in income as loans.
Gates is considered the "star witness" of the trial, which is in its second week. Gates was Manafort's partner in the consultancy.
On Monday, U.S. District Judge T.S. Ellis repeatedly clashed with prosecutors about the relevance of such testimony and once again urged them to speed things along.
Laporta said she had grown to distrust the information Gates was providing her, though she didn't know about the embezzlement.
He said that some of Manafort's income was disguised as loans from 15 shell companies that Manafort controlled, a lot of them in Cyprus. Manafort instructed his bookkeeper to classify it as a loan for tax purposes, though Gates admitted in court that it was not one and Manafort had never received a loan from Lyovochkin.