"A man in this courtroom believed the law did not apply to him," Assistant US Attorney Uzo Asonye told the jury. "Not tax law, not banking law." The defence, in rebuttal, said that Manafort was a victim of the deceptions of his former partner, now a government witness, and that any failure to pay taxes was inadvertent. Paul Manafort and his wife Kathleen Manafort arrive at the Alexandria Federal Courthouse in March. Credit:AP Manafort faces 18 charges of financial fraud, as prosecutors say he failed to pay taxes on some of the millions of dollars he made working as a strategist for a political party in Ukraine, and then lied to banks to get loans when those payments stopped. Though the case grew out of the special counsel probe, the trial will not delve into issues surrounding Russian interference in the 2016 election; it is about Manafort's money. Manafort faces a second trial in September in federal court in Washington, DC, on related charges that include failing to register as a foreign lobbyist.

Manafort collected more than $US60 million ($80 million) between 2010 and 2014 from his Ukraine work, where President Viktor Yanukovych, an ally of the Kremlin, was Manafort's "golden goose", Asonye said. Protesters gather outside court for the first day of Paul Manafort's fraud trial. Credit:AP When Yanukovych had to flee Ukraine for Russia in 2014, Manafort's "cash spigot" was shut off, the prosecutor said, and the political strategist set out to generate money by lying to banks on loan applications. Asonye said Manafort misstated his income and hid debt to get banks to approve the loans; Manafort's company DMP reported no profits in 2016. "He created cash out of thin air," Asonye said. Manafort "got whatever he wanted," the prosecutor said, including a $US15,000 ostrich coat and a $US2 million house "just a stone's throw away" from the courtroom where he is now on trial.

Asonye's efforts to paint Manafort as a free-spending tax cheat were interrupted more than once by US District Court Judge TS Ellis, who noted "it isn't a crime to be profligate in your spending." The prosecutor said the charges boil down to "one simple issue: Paul Manafort lied." Manafort's defence lawyer Thomas Zehnle said the case was about "taxes and trust", and that the real liar was not Manafort, but his former right-hand man, Rick Gates. Gates has pleaded guilty to conspiring to defraud the US and to lying to the FBI, and as part of his plea deal agreed to provide evidence against others, including his former colleague. "Mr Manafort placed his trust in the wrong person," Zehnle said, arguing that his client built "one of the most successful political consulting and government relations shops in Washington," while also working on "the global stage".

That work is not partisan, Zehnle said, pointing out that Tad Devine, a former strategist for Independent Senator Bernie Sanders would testify about working in Ukraine with Manafort. Zehnle said Manafort's work for Yanukovych was to "bring the country closer to Western democracies after decades of Soviet rule" - toward the European Union and away from Russia. That comment was met with audible sneers from a few members of the gallery. Protests in Ukraine were first triggered in late 2013 by Yanukovych's decision not sign an EU association agreement, an embrace of the West that Russia opposed. Zehnle said Manafort also never intentionally deceived the IRS about his income and that his client made mistakes, not realising he needed to file certain forms and make certain declarations. "This is not a case where someone flew to Switzerland and stashed money in an account," Zehnle said. The lawyer also said that earlier in the investigation, Manafort willingly sat down with FBI agents investigating the misuse of funds in Ukraine. Manafort's defence strategy appears aimed at the credibility of Gates, the star witness against him, by accusing Manafort's one-time protege and partner of embezzling millions of dollars.

"Rick Gates had his hand in the cookie jar, and he couldn't take the risk that his boss might find out," Zehnle said. He said Gates prevented other people involved in Manafort's finances - accountants and bookkeepers - from sharing information about the accounts with each other. On the first day of the trial, the northern Virginia federal courthouse lived up to its reputation as a "rocket docket" where cases move quickly. In a matter of a few hours, the judge had winnowed a jury pool of about sixty people down to 12 jurors and four alternates. After lunch, opening statements took about an hour, followed by the trial's first witness, Devine. The architect of Sanders' presidential campaign, Devine also worked closely with Manafort as a political consultant in Ukraine - a striking example of how US political consultants from across the spectrum take their expertise overseas, where they can often earn large amounts of money advising foreign politicians. Devine said he worked for Yanukovych's Party of Regions in Ukraine from 2005 to 2010 and returned briefly for a project in 2014. "It was an incredible operation," he said of his first campaign there. Manafort had hired great people, he said, and had "substantial resources . . . I was really impressed by him."

Devine said Yanukovych won the presidency in 2010 because of the "excellent campaign that Paul ran." Devine said he produced TV commercials and wrote speeches for Yanukovych, earning $US500,000 and a bonus of $US100,000 when Manafort's client won. While working on the campaign, Devine met other Manafort associates who have since come under investigation, including Gates and Konstantin Kilimnik, a Russian citizen. At the time, Devine said, Kilimnik worked as a translator. Prosecutors have said Kilimnik has ties to Russian intelligence, and they accused him and Manafort of trying to tamper with witnesses earlier this year. Devine said Manafort was clearly the boss in his relationship with Gates, though they were partners. "Paul was in charge," Devine said. "Rick worked for Paul." The trial continues on Wednesday, US time.

with Justin Jouvenal, Rosalind Helderman and Devlin Barrett Washington Post