The Dubious Friends of Donald Trump: The Russians

Although still in its early days, Donald Trump’s presidency is coming under fire. The Russians are alleged to be in possession of sensitive information about Trump. And that exposes Trump to blackmail. Fake news, tweets Trump: “I have nothing to do with Russia – no deals, no loans, no nothing!” Trump swears he has no ties with the Russians. But is that actually the case? 

For months, the FBI have been investigating Russian interference in the American presidential elections. ZEMBLA is investigating another explosive dossier concerning Trump’s involvement with the Russians: Trump’s business and personal ties to oligarchs from the former Soviet Union. Powerful billionaires suspected of money laundering and fraud, and of having contacts in Moscow and with the mafia. What do these relationships say about Trump and why does he deny them? How compromising are these dubious business relationships for the 45th president of the United States? And are there connections with the Netherlands? ZEMBLA meets with one of Trump’s controversial cronies and speaks with a former CIA agent, fraud investigators, attorneys, and an American senator among others.

ZEMBLA: ' The Dubious Friends of Donald Trump: The Russians'  Wednesday 3 May 2017, 9:10pm, VARA on NPO 2 and on this page.

Investigations conducted by ZEMBLA show that Bayrock has formed a business construction in the Netherlands, which may have been used to siphon off one and a half million dollars. In this enterprise, Bayrock collaborated with Viktor Khrapunov, a fugitive ex-mayor and governor from Kazakhstan. The Kazakhstan government accuses Khrapunov of systematically looting hundreds of millions of public assets.

The network of companies works as follows:  
The hub of the enterprise is the Dutch letter box company KazBay B.V. In the act of incorporation  it states that KazBay is owned by two companies: the Dutch firm Bayrock B.V. and the Swiss company Helvetic Capital S.A. This email  explains that Trump’s business partner Bayrock Group L.L.C. is behind Bayrock BV, and that the actual owner of Helvetic Capital S.A. is none other than the wife of Viktor Khrapunov.

This  mail  clearly refers to the use of a Dutch go-between company. Its contents also reveal that the Dutch construction was formed by the law firm of Rudy Giuliani who, at the time, was a partner in Bracewell & Giuliani LLP, and is also a Trump confidante.

In this  agreement   Bayrock and Khrapunov agree to deposit 1.48 million dollars in KazBay. On 25 September, Bayrock transfers its share of 740,000 dollars, evidence of which is recorded in the bank statements .

Bayrock informs an investor that the 1.48 million was invested in mining operations in Kazakhstan. According to this email the business partner asks to see records of the expenses. Bayrock, however, appears unable to account for the 1.5 million dollars. When ZEMBLA asks about the suspect investments, Bayrock declines to answer.

In  a response   Bayrock told ZEMBLA that:

In the  Kriss vs Bayrock lawsuit  a former Bayrock employee accuses the company of perpetrating large-scale tax fraud and of running a criminal organisation. 

The Dutch intermediaries were directors of KazBay for eighteen months. During this time, various articles   were published, exploring the murky past of Bayrock and Khrapunov.

Six months ago, the Financial Times wrote  this article   about Khrapunov and his business partner Bayrock, accusing KazBay of operating as a money laundering channel.

Donald Trump appeared entirely unconcerned by the criminal background of his then business partner Felix Sater. In an email   to an investor, Saterobserves that Trump’s main consideration was to turn the situation to his own financial advantage. In the email which was earlier disclosed by Forbes Magazine,   Sater refers to a meeting that took place on 23 January 2008.

According to internal documents  belonging to Bayrock, the gathering was an important meeting which required the presence of all Trump SoHo business partners. Prior to the meeting, Sater appears to have been in contact with Trump. I

n an e-mail  Sater tells his colleagues: “Donald is happy with me”.

At the time of the meeting, Trump is fully aware of Sater’s past. A month earlier, on 17 December 2007, the New York Times published  an article  on Sater and his criminal deeds. On 19 December 2007, Donald Trump  declares  his intention to look into the matter.

Frederick Oberlander is a New York-based attorney specialised in tax law.

He took legal action as far as the United States Supreme Court calling for the public disclosure of the sealed legal dossier of Felix Sater. His attempts have proved largely successful. Previously, a variety of lower courts had ruled that Oberlander was enjoined from in any way revealing secret documents on Sater that he had obtained from a Bayrock employee, and instructed not to refer to the case at all.

'qui tam' case
Oberlander has been conducting legal proceedings against Bayrock for years. He instigated what’s known as a ‘qui tam’ case against the company in 2015. ‘qui tam’ is a specifically American law suit filed by a private individual, acting as prosecutor (a private Attorney General) to recover misappropriate government funds (in this case taxes).

In the case against Bayrock, the public prosecutor of the State of New York has given Oberlander the go-ahead to represent a group of clients who are suing Bayrock ‘on behalf of themselves and the people of the State of New York’.

According to Oberlander, Tevfik Arif, Felix Sater and Julius Schwartz are guilty of perpetrating various types of fraud, and have attempted to conceal their fraudulent activities.

On September 27th 2017, a New York State Supreme Court Judge dismissed the Qui Tam lawsuit.

 Statement Bayrock Group LLC.:
“We are gratified by Justice Charles E. Ramos’s ruling today dismissing in its entirety the Qui Tam lawsuit brought by attorney Fred Oberlander.  We argued that Oberlander’s repeated misconduct and violations of New York’s attorneyethics rules required dismissal of the action.  We have maintained throughout that the lawsuit was without merit and based on stolen confidential materials.” 

This presentation divulges that the Icelandic investment company FL Group is one of Bayrock’s strategic partners. In 2007, the two companies sign a million-dollar property development agreement. Donald Trump approves the agreement, and also adds his signature .

Court documents  state that Russian investors, who are supporters of Vladimir Putin, are said to be behind the FL Group. The documents also refer to a covert plan concocted by FL and Bayrock. Together, the companies are purported to have been planning a tax fraud amounting to 250 million dollars. In their above-mentioned response, Bayrock let us know they have no intention of commenting on cases that are subject to ongoing litigation.

The FL Group (now known as Stodir after a restructuring in 2009) informed Zembla as follows:

Reactions to 'The dubious friends of Donald Trump: the Russians':

Felix Sater denies having threatened people with violence. In spite of repeated requests, Sater has not answered ZEMBLA’s questions.  Donald Trump, Alexander Machkevich and Viktor Khrapunov have not responded either.

Frederick Oberlander  
Frederick Oberlander is a New York-based attorney specialised in tax law. 

He took legal action as far as the United States Supreme Court calling for the public disclosure of the sealed legal dossier of Felix Sater. His attempts have proved largely successful. Previously, a variety of lower courts had ruled that Oberlander was enjoined from in any way revealing secret documents on Sater that he had obtained from a Bayrock employee, and instructed not to refer to the case at all. 

Oberlander has been conducting legal proceedings against Bayrock for years. He instigated what’s known as a ‘qui tam’ case against the company in 2015. ‘qui tam’ is a specifically American law suit filed by a private individual, acting as prosecutor (a private Attorney General) to recover misappropriate government funds (in this case taxes). 

In the case against Bayrock, the public prosecutor of the State of New York has given Oberlander the go-ahead to represent a group of clients who are suing Bayrock ‘on behalf of themselves and the State of New York’. 

According to Oberlander, TevfikArif, Felix Sater and Julius Schwartz are guilty perpetrating various types of fraud, and have attempted to conceal their fraudulent activities.