In late September 2017, a Manhattan court dismissed a $250 million civil tax fraud case against Felix Sater, who is a Russian-American businessman and former associate of President Donald Trump. Sater was working as a development manager and advisor at the Bayrock Group, an international real estate development company. Later in 2006, Sater became the senior advisor to Trump in the Trump SoHo project.
The Bayrock Group was founded by Tevfik Arif in 2001. This group once operated merely two floors beneath Trump’s office in Trump Towers.
This civil tax fraud case was filed against Sater and his real estate company and was prosecuted as a qui tam case. Qui tam cases are powerful for whistleblowers, and are brought under the False Claims Act. A whistleblower can file on the state’s behalf, and is rewarded in successful cases. With a qui tam case, it is up to the attorney general as to whether they choose to intervene, and Attorney General Eric Schneiderman chose not to do so.
The alleged whistleblower in this case is lawyer Fred Oberlander, who at one point happened to represent a former business partner of Sater in a money-laundering lawsuit against Bayrock. Oberlander confirmed filing his case based on information that federal judges had removed from the federal complaint previously as confidential. However, this did not go well for Oberlander, and the case was later confirmed to be dismissed.
Schneiderman’s office, however, did state that they would continue to monitor this case from now on. Sater’s lawyer, Robert Wolf, made the comment that Oberlander and another attorney involved had both been directed to the Department of Justice for criminal contempt. Wolf also stated that “merit” played a large role in the dismissal on the case, more so than typical procedures. Likely due to the reported misconduct of Oberlander and the other attorney involved.
In 2010 Bayrock’s former finance director, Jody Kriss, brought the initial lawsuit against Sater and the real estate company. Kriss indicted Sater and Tevfik Arif of money laundering, racketeering, and fraud, which in turn swindled him out of millions of dollars. Kriss also purported that the company was “substantially and covertly mob-owned and operated”. Continuing to claim they were involved in multiple crimes including but not limited to: bank fraud, embezzlement, extortion, tax evasion, and extortion.
According to Kriss, when Sater and Arif began working with President Trumpt they failed to inform Trump about any sort of criminal history from Sater’s past. Trump later declared that he would not have been affiliated with the real estate company if he had any knowledge of the crime related information. Furthermore, in a deposition Sater stated that he met with Trump on a regular basis, yet Trump claims that he would not know who Sater was if he saw him in person, even though Sater was at one point working in such close quarters to Trump.
In a 2007 deposition Trump professes, “It’s ridiculous that I wouldn’t be investing in Russia”, then goes on to say that Russia is “one of the hottest places in the world for investment.” From this statement, it appears that Trump highly regards his connections with Russia, and would not put himself in a situation that may disturb or complicate those ties.