Trump’s business partnerships with shadowy Russians in New York real estate deals

A bombshell Bloomberg View report dropped Wednesday morning detailing President Donald Trump’s shadowy business partnerships with Russian investors on New York City real estate deals.

Rachel Maddow teased the report, which links the president to possible money laundering operations through his business associate Felix Sater — a mob informant and felon who has boasted of his ties to the Kremlin and Russian intelligence.

While special counsel Robert Mueller is looking into whether Trump obstructed justice in firing former FBI Director James Comey, the investigation into possible collusion between Trump’s campaign and Russia also continues. As The Washington Post reported last week, the investigation into Trump also involves tracking concerning financial activities. The New York Times went even further, saying that Mueller is looking into whether Trump associates laundered payoffs from Russians and funneled them through offshore accounts.

“It’s ridiculous that I wouldn’t be investing in Russia,” Trump said during a 2007 deposition. “Russia is one of the hottest places in the world for investment.”

“Russians make up a pretty disproportionate cross-section of a lot of our assets,” Donald Trump Jr. said a year later.

A troubling history of possibly compromising business relationships has scored cash for Trump for years, according to Bloomberg. The Bayrock Group, a now-dormant development firm that operated in Trump Tower, partnered with Donald Trump Jr. and Ivanka Trump on a series of deals between 2002 and 2011. The largest of the deals was part of a project in Manhattan, the Trump Soho Hotel.

During the years that the two worked together, Bayrock was a link between several dark projects in the U.S. and Europe that once named after Trump. Bayrock used Icelandic banks to launder money from government investors, legislators and others, Bloomberg reported.

One principal was a career criminal, according to Bloomberg, named Felix Sater, who worked with organized crime in both the U.S. and Russia. Before he brought the company to Trump he worked as a mob informant for the FBI and ran to Moscow to avoid any criminal charges.

Trump, Arif and Sater, at right

A former Bayrock insider, Jody Kriss, admitted that he left the firm out of fear the company was a front for a money laundering scheme and filed a lawsuit claiming he’d been swindled out of millions by cash skimming and tax dodging.

A federal judge agreed in December that Kriss’ suit could move forward as a racketeering case.

Trump claims he barely knows Sater, but the two met frequently at Trump Tower and Sater showed Trump’s children around Moscow on a visit, and he also carried Trump Organization business cards.

Sater was also involved with Trump’s personal attorney Michael Cohen and former national security adviser Michael Flynn on a Ukrainian peace proposal.

He went to prison for 15 months in 1993 for slashing the man’s face open with a margarita glass during a bar fight, and Sater later fled to Moscow after federal prosecutors charged him and his associates with laundering about $40 million from elderly Holocaust survivors for the mob.

Sater “was always hustling and scheming, and his contacts in Russia were the same kind of contacts he had in the United States,” Lauria wrote in his 2003 memoir, “The Scorpion and the Frog.” “The difference was that in Russia his crooked contacts were links between Russian organized crime, the Russian military, the KGB, and operatives who played both ways, or sometimes three ways.”

He eventually came back to the U.S. to face charges but traded on his knowledge of Stinger missiles for sale on the black market in Afghanistan to strike a plea deal in the money laundering case, which was then sealed.

Sater and Kriss joined Bayrock, headquartered at Trump Tower, in 2002 with a $10 million investment from former Soviet official Tevfik Arif, who reportedly made his fortune running upscale hotels in Turkey that catered to wealthy Russians.

Marketing documents for Bayrock pitched prospective investors claiming a former Soviet oligarch, Alexander Mashkevich, was one of Bayrock’s primary sources of capital.

According to Bloomberg, Bayrock was never out of money, despite running a small development firm. Kriss’ lawsuit alleges they could operate “month after month, for two years, in fact, more frequently, whenever Bayrock ran out of cash.” If times got tight, Bayrock’s owners would “magically show up with a wire from ‘somewhere’ just large enough to keep the company going.”

Both Sater and Arif wooed Kriss to Bayrock by promising him 10 percent of the firm’s profits, according to the lawsuit. Being located in Trump Tower gave “an air of success” to the company, according to Kriss — as well as an opportunity to work with Trump.

Sater was the one who built the relationship with the future president, according to court records. He used three Trump Organization executives to eventually lead him to Trump in 2002, when the celebrity real estate developer wasn’t in a good place financially and had barely escaped personal bankruptcy in the 1990s. His reputation was sunk and no bank wanted anything to do with him, so Trump turned to developing golf courses. Arif and Sater pitched him the idea of doing international hotel chains with Trump’s name, according to Kriss — which they claimed would help pump up his “brand.”

The relationship proved mutually beneficial, and both Bayrock and Trump saw their fortunes rise after the debut of his reality show, “The Apprentice,” in 2004.

“That put Bayrock in a great position once the show debuted,” Kriss said. “The show did it for Trump, man. Nobody was interested in licensing his name before that.”

Bayrock promised Trump an 18 percent equity stake in the Trump Soho hotel, which would provide a steady stream of cash from fees and his name on a Manhattan building. No one knows whether Trump did any research into the Bayrock partners backgrounds, but Bloomberg alleges that Trump was known for lacking concern for such matters.

Sater claims he revealed his convictions to Trump Organization members and assumed they relayed it to Trump, but he can’t say for sure.

“It’s not very hard to get connected to Donald if you make it known that you have a lot of money and you want to do deals and you want to put his name on it,” said Abe Wallach, who served as Trump’s right-hand man from 1990 to 2002. “Donald doesn’t do due diligence. He relies on his gut and whether he thinks you have good genes.”

Due to a language barrier, Arif had little to do with Trump, so it was left to Sater and Kriss — who had most of their interactions with Donald Trump Jr. and Ivanka Trump, but the future president always had final say.

According to a deposition, Sater met with Trump multiple times a week to talk about business, including a plan to use Sater’s Russian connections to build a “high-rise” in Moscow.

Sater claimed he wouldn’t call Trump “my friend” in a 2008 deposition, but the two traveled together to look at deals. “Anybody can come in and build a tower,” he said. “I can build a Trump Tower because of my relationship with Trump.”

They began the international hotel-condo projects by exploring deals in Turkey, Poland, and Ukraine. Sater took Ivanka and Don Jr. to Moscow looking for land for a Trump-branded hotel, but none got past the planning stages. In the U.S., however, Bayrock and Trump projects moved forward.

Developing a Phoenix hotel became a nightmare when a zoning debate surfaced and Sater ended up in court with a local investor named Ernest Mennes. In a lawsuit, Mennes claimed he threatened to reveal Sater’s criminal history, and Sater said that he had a cousin that would “electrically shock Mr. Mennes’ testicles, cut off Mr. Mennes’ legs, and leave Mr. Mennes dead in the trunk of his car.”

Mennes also claimed Bayrock and Sater skimmed money off of the development. They ultimately settled the suit, sealed the court documents and Sater’s lawyers deny Mennes’s allegations

They then started the Trump International Hotel and Tower project in Fort Lauderdale, Florida, in 2005. It ultimately ended up in foreclosure. Finally, Bayrock and Trump built the Soho hotel with a Trump, Sater and Arif photo from a launch party in 2007 — which Trump advertised as part of “The Apprentice.”

An influx of funding came in from an Icelandic investment bank named the FL Group. Sater and Lauria had a longtime mob ally recruited into FL. Trump didn’t seem concerned about vetting the firm despite operating in a country with problematic banking systems. The FL Group went under, a little more than a year after its investment, but was never prosecuted despite other Icelandic banks being jailed for money laundering.

In an interview, Kriss said competitors of the FL Group also asked to invest in Bayrock. He took the proposal to Sater and Arif, who told him that the money from Icelandic banks “was mostly Russian,” and that the group was forced to take FL’s funds for other deals with Trump because the firm was “closer to Putin.”

“I thought it was a lie or a joke when they said Putin,” Kriss remembers, though he doesn’t have financial records to prove it. “I didn’t know how to make sense of it at all.”

When Kriss complained he was owed a payout after the FL deal, but he said that Sater threatened him, so he took $500,000 and eventually quit.

By December 2007 Sater’s past was splashed across the New York Times, and he began using an alternative spelling of his name, “Satter.” Just days following that article, Trump sat for a deposition with the Bloomberg story’s author, Timothy O’Brien, as part of a libel lawsuit Trump had filed for “TrumpNation.” O’Brien’s attorneys asked if Trump planned to sever ties with Sater because of the organized crime ties and The Times article. Trump said he wasn’t sure yet.

“Have you previously associated with people you knew were members of organized crime?” one of O’Brien’s lawyers asked Trump.

“No, I haven’t,” Trump replied. “And it’s hard to overly blame Bayrock. Things like that can happen. But I want to see what action Bayrock takes before I make a decision.”

When asked about Sater any time since Trump claimed they weren’t close. In a 2013 deposition around the failed Fort Lauderdale project, Trump was asked about Sater again.

“He was supposedly very close to the government of the United States as a witness or something,” Trump claimed. “I don’t think he was connected to the Mafia. He got into trouble because he got into a barroom fight.”

“I don’t know him very well,” Trump swore under oath. He then claimed he hadn’t spoken much to Sater. “If he were sitting in the room right now I really wouldn’t know what he looked like.”

Trump continued, claiming that he didn’t think any questions about Sater’s background should have influenced his business partnership. “Somebody said that he is in the Mafia. What am I going to do?” Trump said.

By 2008, Sater was forced to resign from Bayrock. The Trump Soho hotel was a flop, opening in 2010 with unfilled units. Those who did buy condos sued Bayrock and Trump and it was forced into foreclosure.

When Kris left Bayrock he set up another firm and sued Sater, Arif, Trump and Bayrock in Delaware in 2008. He claimed Bayrock was a criminal operation and demanded back pay. The case was moved to New York in 2010. Interestingly, however, Sater accidentally left a copy of his deal with the government for the Stinger missile on an old Bayrock computer. An employee found it and gave it to Kriss’s attorney, who filed it as an exhibit.

Trump was ultimately dropped from the case, and Sater came after Kriss with multiple lawsuits claiming, among other things, that Kriss used the courts to come after Slater.

Kriss then began receiving threatening emails, and he discovered there were hundreds of websites that had false and disparaging information about him. He moved to sue the anonymous authors for defamation and the court ruled in his favor and the sites were delisted from Google. He used the court order to find the source of the sites and found them tracked back to Sater’s home address in Sands Point.

At one point, Kriss claims “goons” showed up at his real estate projects in Brooklyn asking his workers if they knew the stories about their boss. Letters questioning his background arrived in every mailbox of every resident in two buildings where Kriss had apartments. Investors in his new company, East River Partners, stood by him but Kris said that Sater’s digital attack on him may be impossible to overcome.

His new attorney, Bradley Simon, stated that he continues to be mystified by how Sater has managed to stay in business this long.

“Sater was a cooperating witness for the Eastern District of New York and he continued going on a crime rampage,” says Simon. “He’s filed all kinds of frivolous lawsuits, but that’s what he does. He seems to have unlimited funds.”

After leaving Bayrock, the Trump Organization briefly employed Sater as a consultant and more recently he was named in other litigation for an Ohio shopping mall where millions allegedly disappeared. The case was settled in 2013.

Sater and others at Bayrock would not comment for O’Brien’s expose.

http://www.rawstory.com/2017/06/trumps-links-to-russian-money-laundering-raises-new-questions-about-secret-real-estate-deals-since-election/

Advertisements

3 thoughts on “Trump’s business partnerships with shadowy Russians in New York real estate deals

  1. It would bea good day to release his taxes, but I am not holding my breath.

    Liked by 2 people

  2. If anyone can find the answer to trump’s taxes, Rachel can do it. She is one of the best investigative reporters out there.

    Liked by 1 person

  3. You know, the one trait that always seems to be a sub current to everything trump says, is a total lack of humanity. There is no warmth, no genuine sense of caring or concern. He sounds like there is something there at times, like the statements about miners, but still doesn’t tell the truth to them. Coal is no longer the future of energy. The world has moved on and in order for miners to survive they will need to move on too. He will never put money and STRUCTURE and HOPE to offer them a new way. He will never do that because he will not cop to the truth, and admit to his campaign tactics to get votes and pull on people’s heart strings. There is no there there, no humanity.

    Liked by 2 people

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s