Boris Boillon, who has been nicknamed "Sarko Boy" and compared to James Bond in the media, told presiding judge Peimane Ghaleh-Marzban that he could "look you straight in the eye" and swear that he intended to put the money on his books.
His words echoed those of Jérôme Cahuzac, the disgraced former economy minister, whom Ghaleh-Marzban jailed for three years last December after he finally admitted having a tax-dodging Swiss bank account, having denied it for several months.
Boillon, who was instrumental in improving relations between Sarkozy and deposed Libyan president Moamer Kadhafi, faces charges of fraud, forgery and money-laundering after being stopped at the railway station with a bag stuffed with 350,000 euros and 40,000 dollars all in unused notes on 31 July 2013.
French law forbids the undeclared transfer of sums higher than 10,000 euros to another European Union country.
He insists that the money was payment for acting as an intermediary for an Iraqi company, notably for a large construction project that Ghaleh-Marzban has commented is shrouded in a "nagging odour of corruption".
Turned back from Brussels to collect cash
Having brought the cash to France from Iraq, without declaring it in either country, he hid it in four bundles, two in his Paris apartment, one in the cellar and one in a hole he dug in the cellar floor.
On 31 July he left for Brussels but, he told the court that, having read an article about a rise in burglaries in the French capital in the train, he decided to turn back and collect his money.
Boillon claims not to have known about the money transfer ban but accepts he should have declared the payment to the authorities.
His lawyer, Jean Reinhart, claims he did so later and has "even paid tax on it".
Boillon was ambassador to Iraq in 2009-11 and Tunisia in 2011-12 before setting up his own consultancy, Spartago, working mainly with Iraqi firms.
In 2016 he worked at France's UN representation.
He has since been suspended by the French foreign ministry pending the result of the trial.
Sarkozy himself has faced a number of legal cases, including allegations that he received 50 million euros from Kadhafi to fund his successful 2007 presidential election campaign.