Prosecutors: Paul Manafort believed he was above the law

Prosecutor Uzo Asonye told the jury yesterday during his opening statement that Manafort considered himself above the law as he funnelled tens of millions of dollars through offshore accounts.

That "secret income" was used to pay for personal expenses such as a USD 21,000 watch, a USD 15,000 jacket made of ostrich and more than USD 6 million worth of real estate paid for in cash, Asonye said.

"A man in this courtroom believed the law did not apply to him — not tax law, not banking law," Asonye said as he sketched out the evidence gathered by special counsel Robert Mueller's team in Manafort's bank fraud and tax evasion trial.

Manafort's trial is the first arising from Mueller's investigation into potential ties between Donald Trump's presidential campaign and Russia.

It opened with extraordinary anticipation amid unresolved questions about whether Trump associates coordinated with the Kremlin to tip the election in the president's favour.

But it was clear from the outset that the case would not address that question: Prosecutors did not once reference Manafort's work for the Trump campaign nor mention Mueller's broader and ongoing investigation into Russian election interference. Mueller was not present in the courtroom.

Manafort, the lone American charged by Mueller who has opted to stand trial instead of cooperate with prosecutors, was described by his defense lawyer as a hugely successful international political consultant who left the details of his finances to others.

He relied on a team of financial experts to keep track of the millions of dollars he earned from his Ukrainian political work and to ensure that money was being properly reported, said attorney Thomas Zehnle.

He especially trusted business associate Rick Gates, who pleaded guilty in Mueller's investigation and is now the government's star witness.

But that trust was misplaced, Zehnle said in an opening statement that made clear that undermining the credibility of Gates — a former Trump campaign aide who spent years working for Manafort in Ukraine — is central to the defense strategy.

Zehnle warned jurors that Gates could not be trusted and was the type of witness who would say anything he could to save himself from a lengthy prison sentence and a crippling financial penalty.

"Money's coming in fast. It's a lot, and Paul Manafort trusted that Rick Gates was keeping track of it," Zehnle said. "That's what Rick Gates was being paid to do."

Manafort, who has been jailed for nearly two months, wore a black suit and appeared fully engaged in his defense, whispering with his attorneys during jury selection and scribbling notes as the prosecution began its opening statement.

The trial, decided by a jury of six men and six women who were seated after a brief selection process Tuesday, is expected to last several weeks.

After opening statements, the jury heard from the government's first witness, Democratic strategist Tad Devine, who testified about his collaborations with Manafort on behalf of Ukrainian presidential candidate Viktor Yanukovych and his Party of Regions.

Devine testified that Manafort ran a tightly disciplined, professional campaign that contributed to his candidate's victory.

Central to the government's case are allegations that Manafort funneled more than USD 60 million in proceeds from his Ukrainian political consulting through offshore accounts, including in Cyprus, and hid a "significant" portion of it from the IRS.

He created "bogus" loans, falsified documents and lied to his tax preparer and bookkeeper to conceal the money, which he obtained from Ukrainian oligarchs through a series of shell company transfers and later from fraudulently obtained bank loans in the US, prosecutors said.

But Zehnle said there was no evidence that Manafort ever intended to deceive the IRS.

He denied allegations that Manafort had tried to conceal his earnings by storing money in bank accounts in Cyprus, saying that arrangement was not of Manafort's doing but was instead the preferred method of payment of the supporters of the pro-Russia Ukrainian political party who were paying his consulting fees.

Defence lawyers also sought to address head-on Manafort's wealth and the images of a gaudy lifestyle that jurors are expected to see.

"Paul Manafort travels in circles that most people will never know and he's gotten handsomely rewarded for it," Zehnle said. "We do not dispute that."

Earlier, US District Judge TS Ellis III interrupted the prosecutor during his opening statement to caution him against suggesting there was something criminal about being a multimillionaire.

"It isn't a crime to have a lot of money and be profligate in your spending," the judge said.

Though prosecutors made no reference to Trump nor discussed in any way Manafort's leadership of the Trump campaign, Manafort's case is nonetheless widely viewed as a test to the legitimacy of Mueller's ongoing probe, which Trump has dismissed as a "witch hunt".