Prosecutors accused former Trump campaign chairman Paul Manafort of being a "shrewd" liar who orchestrated a global scheme to avoid paying taxes on millions of dollars, in opening statements that kicked off Manafort's trial on Tuesday.
Manafort lived an "extravagant lifestyle" fueled by "secret income" that he earned from his lobbying in Ukraine, said Uzo Asonye, a prosecutor working on the case with special counsel Robert Mueller's team. Manafort became wealthy from the "cash spigot" that came from working for his "golden goose in Ukraine," former President Viktor Yanukovych, Asonye said.
Paul Manafort's trial officially kicked off Tuesday with jury selection
Manafort is facing charges on 18 counts of tax and banking violations
The opening statement indicated that prosecutors plan to put Manafort's wealth on trial as a key element of their case, arguing he funded his lavish spending habits by breaking the law.
"All of these charges boil down to one simple issue: that Paul Manafort lied," Asonye said. "Manafort placed himself and his money over the law."
The case against Manafort outlined by prosecutors on Tuesday represents a new phase in Mueller's investigation into Russian election meddling -- the first jury trial stemming from the probe that President Donald Trump has repeatedly attacked as a "witch hunt."
Following opening statements, Tad Devine, the Democratic political consultant who worked with Manafort in Ukraine, took the stand as the first witness called in the case. Devine was the chief strategist for the 2016 presidential campaign of Sen. Bernie Sanders of Vermont.
Manafort arrived at the Alexandria courthouse Tuesday morning wearing a black suit, with his hair neatly parted. He's facing 18 charges, including accusations of filing false tax returns, failing to report foreign bank accounts and defrauding several banks. If convicted, he faces a maximum sentence of 305 years in prison. He has denied all charges. In addition to the Virginia case, Manafort faces lobbying-related charges in Washington.
For the defense, Manafort attorney Thomas Zehnle made clear the plan is to point the finger at Manafort's longtime deputy Rick Gates, who pleaded guilty to a conspiracy charge and lying to federal investigators in February. Gates was charged with several crimes in the Virginia case, but after his plea, those charges were dropped.
Manafort's "trust in Rick Gates was misplaced," Zehnle said. Gates changed his story over time -- to the point of saying anything to the government, Zehnle argued. And Gates found himself in legal trouble "because he embezzled millions of dollars from his longtime employer," Zehnle said, meaning Manafort.
Tuesday's opening statement was the first time Manafort's team has revealed its strategy in full. It's a bold move, especially given that Gates could also be a key witness in other parts of Mueller's investigation into Russian interference in the 2016 US presidential election.
The defense also intends to use witnesses the prosecutors plan to call to substantiate their charge that it was Gates who lied and stole money.
"He had his hand in the cookie jar," Zehnle said of Gates.
Zehnle also shifted much of the blame to the Ukrainian oligarchs Manafort worked for and the business associates he worked with.
"This is the way that they required it to be done," Zehnle said, arguing why oligarchs had paid Manafort through secret foreign accounts. Prosecutors said Tuesday that Manafort had hid 30 foreign bank accounts from US authorities.
Manafort reacted differently to the prosecutors' opening statements than to those of his own attorney. As Asonye spoke for 30 minutes, Manafort stared down at the table with his glasses on. He removed his glasses and looked intently at his defense attorney when it was Zehnle's turn.
Manafort sat looking at his papers on the desk in front of him as Asonye called him a liar. His wife, Kathleen, seated behind him, sat stoically, looking at the floor as the prosecutor attacked her husband.
Luxurious spending habits and a 'star witness'
Asonye used some dramatic flair in his opening statement.
"A man in this courtroom believed the law did not apply to him," he began, facing jurors and with his back to Manafort.
To demonstrate Manafort's lavish spending habits, Asonye told jurors that Manafort owned several homes, acquired real estate in New York and Virginia, bought expensive cars and a $21,000 watch, and even got a $15,000 jacket "made from an ostrich."
He described how Manafort allegedly made $60 million in Ukraine that he didn't report to the federal government, then used his own 30 bank accounts in three foreign countries to create sham loans and collect untaxed income he spent on the luxury goods.
Asonye walked jurors through a simple narrative trying to boil down complex instruments like offshore shell companies that the government says Manafort used to hide millions of dollars in payments received from Ukrainian oligarchs.
He urged jurors to "just follow the money."
As he started delivering his opening statement, Asonye earned a rebuke from Judge T.S. Ellis, who told him not to tell jurors that "the evidence will show" that the allegations against Manafort are true.
In his opening statement, Zehnle called out prosecutors for barely mentioning Gates and noted that he is the government's "star witness," who had pleaded guilty to lying to the government.
Manafort never intended to deceive the IRS or anyone else, Zehnle argued. In 2014, Manafort voluntarily sat down with the FBI and told them he had been paid $27 million for his work in Ukraine, Zehnle said, and identified the offshore accounts he says he was required to use to do business with Ukrainians.
Manafort's attorney also described how two accountants from the firm Kositzka, Wicks and Co., Philip Ayliff and Cindy Laporta, will say they received false information from Gates about Manafort's accounts. Ayliff and Laporta are among the five witnesses to receive immunity in exchange for their testimony.
Zehnle said Devine would testify about their work together in Europe. Though he didn't mention Russia or the ties to that government Manafort's Ukrainian clients have, Zehnle told the jury Manafort hoped to bring Ukraine closer to Western European democracies through his lobbying work.
Manafort "could not possibly anticipate his work in Ukraine would bring him to this courtroom today," Zehnle said.
The statement was the closest either side stepped during their opening statements toward the foreign politics and focus on Russia that set off Mueller's investigation.
First witness takes the stand
In his testimony, Devine described the organization of Manafort's foreign political consulting operation and how it included Manafort, Gates and Konstantin Kilimnik.
Devine testified extensively on how much work Manafort did in Ukraine alongside Gates and Kilimnik. He spoke about an effort for Manafort to work with other Ukrainian politicians, besides Yanukovych, as recently as 2014.
Following the defense's questioning, prosecutor Greg Andres asked Devine, "Did you ever set up an account" in Cyprus "to receive money from Ukrainian politicians?" Devine said no.
Prosecutors tried to prevent Manafort's team from asking Devine if he and Manafort worked for opposing political parties in the US. The jury never heard it, but Devine has worked for Democrats, including Sanders, while Manafort has spent his career working for Republican candidates.
The trial will resume on Wednesday morning with prosecutors planning to call Daniel Rabin, a Democratic political consultant who worked on Ukrainian campaigns.
Tuesday's opening statements and testimony came after the jury was also selected and sworn in on Tuesday. The 12-person jury comprises six men and six women. There are also four alternates, three women and a man.
Ellis had given the pool of 65 potential jurors an overview of the charges against Manafort, though he reminded the group that the indictment "is not evidence of any guilt whatsoever."
The pool was also nearly evenly split between men and women. The group was predominantly white, with fewer than a dozen nonwhite potential jurors. Most were comfortably middle-aged.
Of the potential jurors, two joked that they were "recovering attorneys." One younger woman said she knew Justice Department attorneys from her work at a Silicon Valley-based tech company. Another man brought a John Grisham novel into the courtroom.
The trial is expected to last several weeks.
Manafort was a senior Trump campaign aide and he led the campaign for several months, but the charges are not directly related to campaign activity, as the White House has repeatedly emphasized.
"The judge has very strictly instructed no mention of Paul Manafort's role in the Trump campaign, no mention of Trump, Russia or collusion," senior White House aide Kellyanne Conway said Tuesday morning on Fox News. "This trial obviously centers on matters that have nothing to do with the campaign."
While Trump has repeatedly railed against Manafort and the "witch hunt" on Twitter in recent weeks, he has not tweeted about Manafort specifically in more than a month. He said June 15 that Manafort received a "tough sentence" after his bond was revoked over allegations of witness tampering.
Before jury selection got underway, Ellis said he did not plan to offer decisions on Tuesday about all of the documents that Manafort's team wants to keep out of the trial. They hope to prevent jurors from seeing some documents and photos from Manafort's lobbying work in Ukraine.
Instead, the judge gave broad directions to the prosecutors: Try to reduce the number of Ukrainian documents given to the jury, use testimony to add context and don't refer to individual documents in opening statements.
Appeals court rejects request to be freed
Manafort appears likely to remain in jail throughout his trial after a federal appeals court on Tuesday rejected his request to overturn a lower court's decision to send him to jail before trial.
Tuesday's ruling from a three-judge panel on the DC Circuit Court of Appeals was unanimous.
Manafort's bail was revoked in June while he was on house arrest, after prosecutors accused him of tampering with witnesses.
The appellate judges said Manafort was rightfully jailed because he had decided "to push the envelope by contributing to an op-ed in a foreign newspaper" while under a gag order, and also had "repeated communications with potential witnesses" for his upcoming trial.
The panel agreed with some of Manafort's arguments, for instance that the gag order in his Virginia case was somewhat ambiguous. But it ultimately said this wasn't enough to look past Manafort's conduct and set him free from jail.
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