The central Asian country was once part of the Soviet Union. The stolen fortune cited in the lawsuit is the tip of the iceberg. Keep reading.
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.
Step just one foot outside Trump's small immediate circle of violent felons and accused white-collar criminals and you find a kill-the-witness murderer plus allegations of human trafficking by Russian gangsters. Read on.
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.
Wolf asked DCReport to delay the publication of this article so that he could prepare responses to our simple questions, including anything he wanted to say that we didn't ask about. We delayed this piece for more than a month. Wolf provided no statement.
We also reached out to the law firm's managing partner, Dean Swagert. He did not respond to an email or a telephone call.
Trump-Sater Connections
For years Sater traveled widely with Trump on his personal jet, spoke on his behalf to journalists and was filmed with Trump at public events. Flash back to the opening of the scandal-ridden Trump SoHo hotel and apartment tower in Lower Manhattan. Trump has testified that he barely knows Sater and would not recognize him if they were in the same room. Even Sater called that a lie.
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.
Sater's Fed Ties
Federal prosecutors worked to conceal records, misled or outright lied to the stock swindle victims and attacked the reputation of a lawyer who tried to open these records, according to the lawyer, Fred Oberlander. For his efforts Oberlander's law license was suspended, but it was later reinstated.
Oberlander has revived his efforts to unseal records about Sater's conduct and what Justice Department prosecutors knew and did. He has also tried to uncover what happened to money from the Trump SoHo Hotel project. Trump's name has since been removed from that building in Lower Manhattan.
Before assuming office Trump was entitled to 18% of the profits from the project which he worked on with Sater. Trump signed a letter that authorized a reorganization during which millions of dollars disappeared into an Icelandic bank under the thumb of an oligarch.
Federal prosecutors in the Eastern District of New York, where Loretta Lynch was the U.S. attorney before she became Barack Obama's attorney general, have pretty much given Sater free range to pursue his schemes, creating a financial Whitey Bulger.
Bulger was an Irish American Boston gangster who played federal law enforcement so well that his FBI handler let him get away with racketeering crimes and murders for almost 20 years. That FBI agent ended up in prison.
Brooklyn's Russian Mobsters
The Brooklyn federal courthouse appears to be central to how Russian gangsters in Brooklyn and Long Island get away with crimes in return for funneling information to our government.
That courthouse is home to an estimated 60 to 75 double sealed criminal cases. It is common to seal criminal case files at times, but a double seal means there is not even a public docket indicating a case exists. The estimate comes from other records that hint at cases for which no public record exists.
It is believed these cases all involve Russian-speaking mobsters who, like Bulger, have persuaded the Justice Department that they are more useful as informants and should be allowed to maintain their corrupt businesses.
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.
Even when they are discovered collecting the records and matching them to transactions is costly and time-consuming. A 20% actual cut in the IRS budget in the last decade makes the service struggle just to process tax returns. A further unexpected stress on the IRS is processing pandemic relief checks.
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.
Murder in Almaty
The bank president during the theft, Mukhtar Ablyazov, was convicted in Almaty of murdering one of the bank's executives in a scheme to cover up the looting. That development last spring brought Sater to the attention of the magistrate overseeing the Almaty case in Manhattan.
The city of Almaty and BTA Bank, in court papers in New York, say that Sater and a pal "assisted" Khrapunov and Ablyazov in hiding the $440 million looted from the bank.
In 2017 DCReport examined the larger Kazakh theft of $10 billion.
That case has turned up many people in Trump's orbit. Matthew L. Schwartz, a former federal prosecutor, now representing the Almaty plaintiffs, told reporter Richard Behar:
"The international financial fraud perpetrated by Ablyazov, Viktor and [his son] Ilyas Khrapunov, and their associates, are as large and far-flung as they come. It involves billions of dollars and has touched at least two dozen different countries—from Kazakhstan, Russia, and Ukraine to the United States, England, and France—and just about every place else."
Law Firm Transfers Money
The Almaty plaintiffs say that the Syracuse and Cincinnati real estate deals "are just two of many examples where Moses & Singer transferred money to and from accounts associated with the defendants in this case, including MeM Energy Partners LLC and Bayrock Group Inc."
Bayrock is a Sater-controlled enterprise while MeM is controlled by a man described in court papers only as a Sater associate. Court papers assert that this Sater associate knowingly participated in laundering some of the stolen BTA bank funds.
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.
