Ukraine in focus as Manafort trial in U.S. heads to second day

[August 01, 2018]  ALEXANDRIA, Va. (Reuters) - The political consulting work that President Donald Trump's onetime campaign chairman Paul Manafort did to earn $60 million in Ukraine is expected to take the spotlight on Wednesday on the second day of his criminal trial.

The first witness set to be questioned by prosecutors is Daniel Rabin, a political consultant who produced TV ads for Manafort in Ukraine. Rabin will likely be asked to elaborate on the nature of Manafort's work for pro-Russian politicians there.

Prosecutors said their second witness would be an FBI agent, whose name was not disclosed.

Manafort is charged with tax fraud, bank fraud and failing to report foreign bank accounts. His trial is the first under Special Counsel Robert Mueller's probe into Russia's alleged interference in the 2016 presidential election. He has pleaded not guilty to all the charges against him.

In their opening statement on Tuesday, prosecutors said Manafort earned some $60 million in Ukraine and failed to report a large portion of it to U.S. authorities.

They portrayed him as a tax cheat who hid the money in offshore accounts, and lied to borrow millions more against real estate in a bid to maintain an extravagant lifestyle once the work dried up.

Manafort's attorneys, on the other hand, described their client as a talented consultant who made it to the pinnacle of U.S. politics and on the global stage.

They argued he did not willfully mislead or deceive the IRS, and that he was betrayed by his former business associate Rick Gates.

In his opening on Tuesday, Manafort attorney Thomas Zehnle made it clear the defense plans to make attacking Gates a key plank of their defense.

They noted that Gates, who has pleaded guilty to making false statements, is being trusted to tell the truth when he testifies as a star witness for the prosecution.

The defense lawyer said Gates would "tell untruths" about Manafort. He also accused Gates of not being honest with the accountants that prepared Manafort's tax returns and of embezzling funds from their business.

Former Trump campaign manager Paul Manafort departs from U.S. District Court in Washington, DC, U.S., February 28, 2018. REUTERS/Yuri Gripas/File Photo

It is unclear when Gates will take the stand in the trial in U.S. District Court in Alexandria, Virginia.

Prosecutors filed a witness list of 35 people and, after calling political consultant Tad Devine as their first witness on Tuesday, revealed only the next two up for Wednesday.

Prosecutors questioned Devine for about an hour, asking him to explain the nature of Manafort's work in the Ukraine. Among other things, Devine disclosed that Rinat Akhmetov, a Ukranian oligarch, was a key financial backer of Manafort's work.

While prosecutors have said they will not present evidence in this trial about possible collusion between Russia and the Trump campaign, they may dig deeper into Manafort's connections with Russian and Ukranian oligarchs, legal experts have said.

Devine said in his testimony on Tuesday that Manafort used Western-style polling and advertising to help lift pro-Russian political figure Viktor Yanukovych to victory in Ukraine's 2010 presidential election.

Yanukovych was later swept from power and fled to Russia in 2014, triggering a big loss of business for Manafort.

(Reporting by Nathan Layne and Karen Freifeld in Alexandria, Virginia; Editing by Michael Perry)

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