Russian Native and Former Trump Associate Avoids Tax Fraud Charge

The civil tax fraud case against Russian-born former Trump crony Felix Sater has been dismissed by a federal court in New York.

Website Business Insider reported that on Wednesday, September 27, 2017, a Manhattan court formally dismissed a $250 million civil tax fraud case against the former Trump associate and real estate company Bayrock, of which Sater is co-founder.

The person who allegedly exposed the tax corruption in the matter is Fred Oberlander, an attorney who previously represented Jody Kriss. Kriss is a former business partner of Sater who was charged in a money-laundering suit in which the company was the defendant.

In the tax fraud matter, the company was being prosecuted as a qui tam case. This type of case makes it possible for the party who is exposing the corrupt activity to file charges on behalf of the state. Once this is done, the attorney general’s office takes a look at the information and decides whether to pursue the matter or not. At Wednesday’s hearing Oberlander said that he had filed the complaint due to information that had come to his attention and which had ultimately been stricken from Kriss’ original complaint.

An attorney who was present for Wednesday’s court hearing told Business Insider that it was almost a certainty that the complaint would be dismissed due to the fact that Oberlander used as a significant of the grounds for his filing information that had previously been ordered stricken from the complaint by federal judges due to it’s confidential nature. Following the hearing it was confirmed by Sater’s attorney, Robert Wolf, as well as by Sater himself, that the case had in fact been dismissed.

When the case was initially filed in 2016, attorney general Eric Schneiderman’s office chose not to pursue the claims. An inaccurate press release was issued at Oberlander’s direction indicating that Schneiderman was in fact going to look into the case. Schneiderman immediately notified the New York Supreme Court informing them of the bogus press release and indicating that his office had expressly refused to pursue the matter. He indicated that the attorney general’s office would, however, continue to monitor the situation in order to protect the interest and the rights of the State.

Sater’s attorney spoke on the matter, stating that the case had been dismissed not an any procedural grounds, but rather on it’s merits. Wolf further acknowledged the fact that his client as well as an attorney by the name of Richard Lerner, who was working on the case, had on two occasions been referred to the Department of Justice to be investigated fro criminal contempt directly related to alleged “misconduct” in the proceedings against his client.

The original lawsuit was filed against Sater and his company in 2010. It was brought by former Bayrock finance director Jody Kriss. The suit alleged that from almost the onset of it’s creation, the company had been predominantly owned and operated by organized crime figures, and that they used the company to consistently engage in patterns of corruption and illegal activities such as mail, bank, and wire fraud, money laundering, racketeering, tax evasion, conspiracy, extortion, bribery, embezzlement, and more. Kriss claimed in the suit that both Sater and company founder Tevfik Arif used these illegal activities to cheat him out of millions of dollars. A New York judge ruled in December that Kriss’ lawsuit had merit and could move forward as a racketeering case.

Kriss’ complaint alleged that in 2003 Arif and Sater began negotiations with the Trump Organization to market some of Bayrock‘s projects under the Trump branding. They declined, however, to inform Trump of Sater’s criminal record. Donald Trump gave a deposition in 2007 stating that he would never have permitted his organization to become involved with Bayrock or their developing any Trump projects had he been aware of Sater’s criminal record. Trump stated that he did not know Sater personally. However, an individual close to the matter, speaking on the condition of anonymity for fear of retribution by Sater, told Business Insider reporters that Sater had standing meetings with Trump on a weekly basis. The corporation’s office had previously occupied office space two floors beneath Trump’s own in Trump Tower, located on Fifth Avenue.

Bloombery reported that in a deposition he gave about the case, Sater himself said he “constantly” met with Trump. Bloomberg had previously reported that, according to Jody Kriss, Trump highly valued Sater both for his fierce loyalty and for his Russian connections. In his 2007 deposition, Trump stated that it was “ridiculous” that he wouldn’t be investing in Russia, calling it one of the “hottest places in the world” for investment.

Richard Lerner told the media he plans to appeal the court’s decision to dismiss the qui tam case.