The real estate industry has traditionally been lightly regulated compared to the finance and banking industries, despite of the sometimes-large sums of money involved in transactions. As a result the industry has tended to be a magnet for money laundering. Trump’s long-running engagement with the development company the Bayrock Group and its former managing director, convicted felon Felix Sater, are under scrutiny by the special counsel. Bayrock has offices in Trump Tower and founded by Tevfik Arif, a former Soviet official; it was also central to putting together multiple deals with Trump, including the troubled Trump SoHo building in New York.

It appears that Trump’s children, Ivanka and Donald Trump Jr., narrowly avoided being charged for fraud for their part in promoting the Trump Soho project.  The decision to not bring charges against Ivanka and Donald Jr., despite the recommendation by prosecutors, was made by the Manhattan District Attorney Cyrus Vance Jr., who later received more than $50,000 in campaign contributions from Trump’s lawyer, Marc Kasowitz, and his partners. Kasowitz, denies having made this contribution “as a ‘quid-pro-quo’ for anything.  Vance, for his part, defended his decision, saying that he did not, “at the time believe beyond a reasonable doubt that a crime had been committed.” (The case and its handling could certainly be re-opened by the special counsel.)

The lawsuits have alleged that Bayrock maintained links to Russian criminal syndicates and conducted $250 million in tax evasion with money laundering central to its business model. Bayrock’s former chief financial officer suggested that at moments when Bayrock was running low on funds, large infusions of cash would come in from Russia or Kazakhstan from shadowy investors hoping to hide their money.

This period of business activity at Bayrock reflects a time when Trump was actively engaged with the real estate development firm.  Trump stated under oath: “It’s ridiculous that I wouldn’t be investing in Russia,” and added, “Russia is one of the hottest places in the world for investment.” Trump settled a lawsuit that claimed that hehad misled investors in Trump SoHo to the tune of several million dollars. The terms of that settlement remain confidential.

One of the key figures involved in these deals has been the Russian-born, mob-linked businessman Felix Sater, who plead guilty to racketeering for his role in a $40 million stock fraud scheme involving the Genovese and Bonanno crime families and was convicted of stabbing a man in the face with a broken margarita glass in New York. Sater avoided jail time by cooperating as an informant in the stock fraud case. And, in a twist worthy of Hollywood, he also appears to have done covert work for the CIA as part of his successful efforts to avoid further jail time. One of the allegations in the lawsuits against Bayrock is a conspiracy to conceal Sater’s role and beneficial ownership in Bayrock, a critical point in light of regulations governing information presented to potential investors.

Despite their long association, Trump has repeatedly denied knowing about Sater’s criminal past, notwithstanding the fact that Sater widely represented himself as a Trump associate in business deals. Moreover, a member of Trump’s security detail actually worked on Sater’s case when he was in the FBI.  It recently came to light that Sater exchanged a series of emails with Trump’s lawyer, Michael Cohen, in an attempt to broker a Trump project in Moscow with the help of Russian president Vladimir Putin. A November 3, 2015, email from Sater to Cohen claimed in reference to Trump, “Our boy can become president of the USA and we can engineer it.” The email continued, “I will get all of Putins team to buy in on this, I will manage this process.”

Further highlighting the potential to view these machinations as part of an ongoing criminal enterprise is the fact that Cohen, Trump’s lawyer, and Sater have been friends since childhood; Cohen himself has been linked to a series of high-profile real estate purchases in New York that appeared to be financed by money flowing out of Ukraine. Cohen, his family members, and business partners purchased close to a dozen Trump properties in a very short period of time starting around 2001 when Cohen was 40 years old. These purchases seemed to far outstrip his assets and resources at the time. Cohen’s brother was married to the daughter of Alex Oronov, a very wealthy Ukrainian businessman who had links to Ukrainian and Russian underworld figures. Oronov died in March 2017, leading some commentators to claim the timing of his death was suspicious, while family members insisted that he had suffered a long illness.


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