NEW YORK (Reuters) - Investors in the defunct billion-dollar hedge fund firm Platinum Partners had ample notice they might not get their money back, a lawyer for Platinum founder Mark Nordlicht told jurors on Tuesday, urging them to acquit his client of criminal fraud charges.

FILE PHOTO: Mark Nordlicht, Platinum Partners founding partner and chief investment officer, exits after a hearing at U.S. Federal Court in Brooklyn, New York, U.S., January 12, 2017. REUTERS/Brendan McDermid

In his opening statement in Brooklyn federal court, lawyer Jose Baez said Nordlicht never defrauded investors, who included himself and his own family.

“This case is a fraud,” Baez said of the criminal prosecution, which began more than two years ago with the December 2016 arrest of Nordlicht and other Platinum executives.

The trial began early Tuesday afternoon with an opening statement from Assistant U.S. Attorney Patrick Hein.

He told jurors that Nordlicht and his co-defendants, Platinum’s co-chief investment officer David Levy and its Chief Financial Officer Joseph SanFilippo, bilked investors out of “millions and millions of dollars” in two different schemes.

In one scheme, Hein said Platinum overvalued the often-illiquid assets of its flagship hedge fund, reported false annualized returns topping 17 percent and selectively paid out cash to some investors over others.

In the second scheme, Nordlicht and Levy defrauded bondholders in Black Elk, an oil exploration company Platinum owned, by diverting money from asset sales to Platinum ahead of Black Elk’s 2015 bankruptcy, Hein said.

Baez countered by showing jurors numerous examples of documents given to investors warning that the investments were risky, that Platinum’s investments were not necessarily liquid and that redemptions of cash were at Nordlicht’s discretion.

“The warnings and the notices to these investors are everywhere,” he said.

Baez said Nordlicht and the other defendants believed they could recover from a liquidity crunch in 2014 and 2015. He said they ultimately failed because of “leaks” to media about the federal investigation of Platinum, and that there could be something “sinister” behind those leaks.

That drew a sharp rebuke from U.S. District Judge Brian Cogan after the jury left for a break.

Cogan had previously ruled that defense lawyers could not suggest to the jury that the government engaged in misconduct.

“Do you want to be the guy whose representations I can’t really trust?” the judge asked.

Levy’s lawyer, Morris Fodeman, delivered his own opening statement after the break, saying his client always acted “lawfully, properly and in good faith.”

A lawyer for SanFilippo is expected to deliver his opening statement on Wednesday.