The FBI spy whose testimony helped jail Real IRA leader Michael McKevitt tried to establish a money laundering racket on board a gambling ship off the coast of America, the Omagh bomb civil action has heard.

Lawyers for McKevitt launched a ferocious attack on the character of David Rupert as they opened their defence against claims that McKevitt was responsible for the August 1998 atrocity which claimed 29 lives.

They also claimed David Rupert had links to the former dictators in Panama and Chile — Generals Noriega and Pinochet.

Rupert, a US trucking company boss who infiltrated dissident republican ranks, was the star prosecution witness when McKevitt was convicted of directing terrorism and jailed for 20 years in 2003.

But McKevitt’s barrister, Michael O’Higgins SC, told the High Court in Belfast that the businessman was a liar who had first demanded $2m to give evidence at the criminal trial in Dublin.

Mr O’Higgins claimed Rupert was a confidence trickster prepared to lie and blame others when confronted.

He said: “I will be submitting to the court that Mr Rupert was guilty of rank perjury during the course of giving evidence in the Dublin trial.”

McKevitt is being sued along with Liam Campbell, Seamus McKenna, Colm Murphy and Seamus Daly by Omagh families who are seeking damages. All five men deny responsibility.

Mr O’Higgins also raised allegations of a savings fraud where David Rupert was said to have pocketed a $30,000 loan mistakenly paid to him after he sold his house.

The barrister added: “There is also his audacious plan to engage in a money laundering operation whereby a gambling ship was to be moored in international waters off the coast of Florida.

“He made no secret that this plan, if it came to fruition, would involve bringing in the Bank of Panama, where black money, the proceeds of active drug dealing and prostitution, would be laundered through this operation.

“It also includes a very colourful cast of characters — General Noriega and General Pinochet are mentioned in dispatches,” he said.

The trial continues.