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Mar 02 2021

The Russian Connection: Still Following the Money

Remember Donald Trump’s business ally Felix Sater who had some really shady connections to Russian oligarchs and a money laundering scheme to build a Trump hotel in Moscow. The tower was never built and questions about $440 million went unanswered. Sater was convicted of first degree assault in 1991 for slashing a commodities broker across the face with a broken Margarita glass. In 1998, he pleaded guilty to his involvement in a $40 million stock fraud scheme orchestrated by the Russian Mafia, and became an informant for the Federal Bureau of Investigation (FBI) and federal prosecutors, assisting with organized crime investigations. In 2017, Sater agreed to cooperate with investigators into international money laundering schemes. Well, Felix is back and without Rump’s Department of Justice to protect him, files that were doubled sealed are now being opened in the case of the missing $440 million and apparently, there is quite a lot more to the story and Trump’s part.

From a report by James S. Henry and David Cay Johnston, DC Report @ Rawstory

However we decide to account for Donald Trump’s astonishing rise and fall, we now know that he was certainly no stranger to a sprawling netherworld of Russian gangsters and oligarchs.

Now there are stunning new allegations in federal court documents that this Russian criminal network with worldwide reach hired Felix Sater, one of Trump’s closest associates, to hide a fortune stolen in Kazakhstan.

The central Asian country was once part of the Soviet Union. The stolen fortune cited in the lawsuit is the tip of the iceberg. [..]

Stolen money amounting to $440 million was invested in America and run through trust funds maintained by Moses & Singer. The New York City law firm has long represented Sater, a Soviet-born American.

The documents alleging Sater’s illicit conduct are listed in the lawsuit brought by the city of Almaty, the capital of Kazakhstan, and the looted BTA Bank in that city.

Some of the $440 million was intended to finance a Trump tower in Moscow, court papers show.

During the 2016 campaign Trump’s then fixer, lawyer Michael Cohen, told a top aide to Vladimir Putin that the modern czar would be given the tower’s $50 million penthouse. The Moscow tower was never built.

The gratuity, first reported by Buzzfeed, was intended to ensure that Russian oligarchs snapped up the rest of the apartments. Trump would have a huge windfall after, to his own surprise, he became the American president. As a candidate, Trump lied repeatedly, insisting he had no business dealings in Russia and was not pursuing any deals.

Mueller Stymied

Special Counsel Robert S. Mueller III told Congress last year that his team was limited to investigating only criminal acts involved in the 2016 presidential campaign. He was instructed not to touch on counterintelligence.

That was a huge favor to Trump and to a vast network of Russian gangsters and fronts connected to Trump, to his campaign and another of his lawyers, Rudy Giuliani. The shady businesses specialize in bank fraud, kleptocracy, tax dodges and money laundering in America. [..]

The Almaty plaintiffs describe a farflung scheme to hide much of the stolen money in America using Sater, a violent felon and stock swindler, and Robert S. Wolf, a Moses & Singer partner. [..]

Sater “was aware” the money he funneled through Moses & Singer’s client trust account was stolen, court papers say. That’s when Sater negotiated his fee for helping to hide the looted money, according to a 2019 court filing in the case.

He could do this because he is also a conduit for American intelligence on activities in the old Soviet Union. Our Justice Department says it gave Sater in 1998 what we see as a sweetheart deal after he confessed to stock swindles that cost victims at least $40 million. He never spent a day in prison. [..]

The new court documents indicate that Sater’s involvement in the ongoing Almaty schemes is much greater than was previously known.  [..]

Money Laundering

The Almaty plaintiffs in a Jan. 5 letter to the federal magistrate overseeing the case complained that Sater’s lawyers at Moses & Singer were slow-walking production of documents. The law firm provided the last of the subpoenaed records a few days later.

The letter says bank records “demonstrate that the entities listed in the subpoena were involved in the money laundering schemes” described in the case.

The plaintiffs’ letter then outlines how looted bank funds were used to acquire various properties.

One is a decrepit and sprawling Syracuse, N.Y., home for disabled children and adults. There’s also the Tri-County Mall near Cincinnati, Ohio.

In all at least $36 million was funneled through the Moses & Singer trust account for client funds, the judge was told.

Real estate is a favorite vehicle for money laundering because property records are not linked to Internal Revenue Service or Securities & Exchange Commission computers. That greatly reduces the risk that schemes will be detected. [..]

Shuffling Millions

The plaintiffs said bank records show that in 2013, “Sater used several of his shell companies to wire Moses & Singer proceeds from the Tri-County Mall sale, an investment again funded with the Kazakh Entities’ stolen funds…

“Sater transferred $36 million of the Tri-County proceeds to the account of his company, Sands Point Partners Fund L.P. Then Sater withdrew $2 million in cash, transferred $950,000 directly to Moses & Singer, and then transferred $32 million to the account of Sands Point Partners Group GP.”

Sater controls Sands Point, court papers show.

The papers also describe how others in the alleged loot-and-hide scheme benefitted from Sater and the complicity of Moses & Singer and lawyer Wolf, a partner of the law firm.

Congress requires Suspicious Activity Reports by firms and their lawyers, rules that the American Bar Association has worked to curtail. If Wolf or anyone at Moses & Singer had reason to suspect illicit funds were involved they could be prosecuted, losing under the crime-fraud exception the confidentiality that clients and lawyers enjoy.

The court papers hint at conflicts among the bank thieves and money launderers, a network whose members are either suspected of or have been convicted of major crimes including kill-the-witness murder.

A Bigger Scheme in the U.K.

The $440 million Almaty theft is connected to a larger scheme in which an estimated $10 billion was looted from the government of Kazakhstan.

In December a British court froze about $5 billion of the money.

Questions about whether any of that money was laundered via Trump real estate deals are being pursued in other litigation.

Those questions arise in part because Trump’s personal lawyer, Giuliani, has had extensive dealings going back at least 14 years with the shadowy and corrupt world of Kazakh petroleum interests. Giuliani has represented people who call themselves businessmen. Yet local news accounts and court documents in Almaty characterize them as gangsters.

The new court filing says that “after settling a dispute” with two Kazakhs criminally charged in the Almaty bank looting, “Sater transferred $20 million of the Tri-County proceeds to the account of (his wife’s) Viktoria’s Gourmet Foods LLC, which then transferred that $20 million to Moses & Singer. Moses & Singer transferred the $20 million to Argon Holding Corp., which is another entity controlled by (Viktor) Khrapunov.”
Khrapunov was mayor of Almaty when BTA bank was looted between 2007 and 2010, according to the criminal complaint against him in Kazakhstan. His son, also accused in various court proceedings, is married to the daughter of the bank president. [..]

Law Firm Transfers Money

In a 2019 court filing, the Almaty plaintiffs wrote that “Sater was a co-conspirator who helped Ablyazov and the Khrapunovs launder their stolen money in the United States. Sater dealt personally with Ilyas Khrapunov” and another individual “and helped them identify potential investments and structure money laundering schemes….

“While Sater originally offered limited assistance to the Kazakh Entities in their investigation, the Kazakh Entities began investigating Sater directly in 2017 after learning details of his own theft of over $20 million of the Kazakh Entities assets.”

Last May Sater told the magistrate overseeing the case that he feared he would be murdered.

“Sater testified that he feared that the Khrapunovs and Ablyazov had spies within Almaty and BTA and that his safety could be at risk if his cooperation were discovered,” Judge Kathleen Parker wrote.

“This fear is credible, given that Ablyazov was convicted in Kazakhstan in 2018 of murdering a former BTA executive and has been convicted of other numerous crimes.”

Remember Trump’s claims that he knows “all the best people” and would rely on them as president? When you heard that, you probably did not have have in mind these people.

With these court documents now being unsealed and the clean up of the Justice Department underway, this could certainly add to the Trump Crime Family’s legal headaches.