‘Mr. Trump has
sought to distance himself from Mr. Sater in recent years. If Mr. Sater “were
sitting in the room right now,” Mr. Trump said in a 2013 deposition, “I really wouldn’t know what he
looked like.” – NYT
To celebrate his first 100 days in office on Saturday
evening President Trump flew to a farm expo
center in Pennsylvania Capital, Harrisburg, where he held a love-in rally with his most fervent
bedrock supporters “reprising the populist themes of his
campaign and savaging a familiar foe: the news media.” (Trump Savages News Media at Rally to Mark
His 100th Day; By MARK LANDLER;
New York Times,
April 30, 2017; https://www.nytimes.com/2017/04/29/us/politics/trump-rally-pennsylvania.html?ref=politics&_r=0)
The New York Times, witheringly dismissed as
a part of the “fake news” liberal media, by Trump, pointed out “In a rally
timed to coincide with an annual dinner of the White House press corps in
Washington, which he declined to attend, Mr. Trump laced into what he referred
to as “the failing New York Times,” as well as CNN and MSNBC, which he accused
of incompetence and dishonesty.
“Their
priorities are not my priorities, and not your priorities,” Mr. Trump said to a
sea of supporters, many in familiar red “Make America Great Again” caps. “If
the media’s job is to be honest and tell the truth, the media deserves a very,
very big fat failing grade,” he said, adding that they were “very dishonest people, ” the NY Times honestly reported.
Why does Trump
hold the liberal media in general, and the New
York Times in particular, in such clear political contempt? It probably has
something to do with its detailed investigative expose’s at least over the past
decade of some of Trump’s most egregious
business activities, and his closest
business associates, that have got under
the notoriously thin skin of the Republican President.
One such
article, published nine years ago, revealed details of a close Trump associate,
Russian immigrant wheeler-dealer, Felix H.Sater.
(Real
Estate Executive With Hand in Trump Projects Rose From Tangled Past”; By CHARLES V. BAGLI; New York Times, DEC. 17,
2007; http://www.nytimes.com/2007/12/17/nyregion/17trump.html)
Here are the opening paragraphs”
“It is is a classic tale of
reinvention, American style.
Born in the Soviet Union in 1966,
Felix H. Sater immigrated with his family to Brighton Beach when he was 8 years
old. At 24 he was a successful Wall Street broker, at 27 he was in prison after
a bloody bar fight, and at 32 he was accused of conspiring with the Mafia to
launder money and defraud investors.
Along the way he became embroiled in
a plan to buy antiaircraft missiles on the black market for the Central
Intelligence Agency in either Russia or Afghanistan, depending on which of his
former associates is telling the story.
But in recent years Mr. Sater has
resurfaced with a slightly different name and a new business card identifying
him as a real estate executive based on Fifth Avenue. And although he may not
be a household name, one of the people he is doing business with is: Donald J. Trump.
Mr. Sater — who now goes by the name
Satter — has been jetting to Denver, Phoenix, Fort Lauderdale, Fla., and
elsewhere since 2003, promoting potential projects in partnership with Mr.
Trump and others. In New York, the company Mr. Sater works for, Bayrock Group,
is a partner in the Trump SoHo, a sleek, 46-story glass tower condominium hotel
under construction on a newly fashionable section of Spring Street.
Several years
later, another newspaper, the Miami
Herald, the local paper for Trump’s holiday resort at Mar o Largo in South
Florida, revealed some intriguing new details about Mr Sater and his
associates:
“A decade before he launched the celebrated
Fort Lauderdale Trump Tower, Felix Sater hatched a bold plan to keep out of
prison. Charged in a New York securities
scandal, the 46-year-old businessman traveled to his native Russia where he
took on a unique role that went far beyond flipping on dangerous criminals.
He began spying for the CIA. Tapping into the vast underground of the
former Soviet Union, Sater was able to track down a dozen Stinger missiles
equipped with powerful tracking devices on the black market. With the backing of U.S. agents, Sater agreed
to buy the weapons — keeping them out of the hands of terrorists. In return,
the CIA pledged to keep Sater from going to jail in the stock scam he concocted
with New York organized crime figures.”
(Swindler, Stinger-missile brokers, the CIA: How
a developer of Fort Lauderdale Trump Tower, a troubled project that cost
investors millions, got the feds to erase his criminal past.” By Michael Sallah;
Miami Herald, September 2012; http://www.miamiherald.com/2012/09/08/2992317/strange-bedfellows-swindler-stinger.html)
The Miami
Herald continued”
“Now, years after the failure of
the Trump Tower, a legal battle has ensued between burned investors trying to
reveal Sater's background and federal agents who say national security is at
stake.’"The problem is at scandal level, and the damage done to victims is
incalculable,’ argued attorney Richard Lerner in a brief before the U.S.
Supreme Court.
Though the federal prosecutor's office in Brooklyn has declined to talk
about Sater's role with the government, records just released show he was
finally sentenced in 2009 — 11 years after he was charged in the New York stock
fraud case. The outcome: a $25,000 fine, no prison time.
During one hearing, the judge said the case had reached top members
"of a national law enforcement security agency. I should say agencies —
plural." But he didn't elaborate.
The fight has been taken so seriously
the judge is using the name John Doe instead of Sater to hide his identity and
to "protect the life of the person."
Despite the drama over hiding
his past, some details have been divulged over the years, including records in
the National Archives that show he cooperated with prosecutors in the
securities scheme.
Then, another defendant in the
scam, Salvatore Lauria, co-wrote a 274-page book in 2003 describing the deal
they cut with the CIA to stay out of prison.
"We were hoping for a free
ride or a get-out-of-jail-free card for our crimes on Wall Street," he
wrote in The Scorpion and the Frog: High Crimes and High Times.
When Sater was charged in the securities scandal in
1998, he was already in Russia with another defendant, Gennady Klotsman, according
to the book, which used a pseudonym for Sater. In the next two years, the three men would
look for ways to stay out of prison with Sater delving into the dangerous world
of arms traders and smugglers.
At the time, Russia was teeming
with a network of people selling tanks, fighter planes, radar systems and
missiles, wrote Lauria, 43. "The
CIA was worried the weapons would be sold to our enemies," he said. For
Sater, it was the perfect solution. They
would get Russian operatives to buy the anti-aircraft missiles from terrorists
— with the CIA kicking in $300,000 for each missile, the book states.
“…Not until a civil racketeering suit was filed two
years ago accusing him and others of massive fraud in the Fort Lauderdale tower
and other projects did his role in the $40 million stock scheme come to light.
A former finance director for
the developers accused Sater and others of diverting millions from the IRS
through shell companies. "Something
very bad and perhaps despicable was done by the use of those documents,"
said Judge Glasser.
Sater's former lawyer, Kelly
Moore, also argued that sealing the records was not just crucial to
"protecting human life" but "national security," records
show. But lawyers pressing the suit have now taken the case to the Supreme
Court, saying the judge went far beyond his bounds by hiding a racketeering
case for 14 years — including the entire docket.
"A covert dual justice
system of secret criminal trials is illegal and can have no place in American
law," wrote Lerner in a brief before the Supreme Court.
Paul Cassell, a former Utah
federal judge who joined the appeal, said the victims were deprived of ever
knowing whether a ringleader in a major stock scam was punished. "[Sater]
apparently continues to live the high life off of the money that he stole from
victims," he wrote in a brief for the National Organization for Victim
Assistance.
The New York Times earlier explained: “…much remains unknown
about Mr. Sater, 41, and determining the truth about his past is a bit like
unraveling the plot of a spy novel: Almost every character tells a different
tale.
A
federal complaint brought against him in a 1998 money laundering and stock
manipulation case was filed in secret and remains under seal. A subsequent
indictment in March 2000 stemming from the same investigation described Mr.
Sater as an “unindicted co-conspirator” and a key figure in a $40 million
scheme involving 19 stockbrokers and organized crime figures from four Mafia
families.
The
indictment asserted that Mr. Sater helped create fraudulent stock brokerages
that were used to defraud investors and launder money. Mr. Sater and his
lawyer, Judd Burstein, repeatedly refused to discuss in detail his role in the
stock scam.
But
a onetime friend, Gennady Klotsman, who is known as Gene and who was accused
with Mr. Sater as a co-conspirator, contends that they both pleaded guilty in
1998, and that Mr. Sater began cooperating with the authorities. Prosecutors
are unwilling to discuss either the 1998 complaint or the 2000 indictment.
“I’m
not proud of some of the things that happened in my 20s,” Mr. Sater said in an
interview. “I am proud of the things I’m doing now.”
Trump at the
time claimed he was:
“surprised to learn of
Mr. Sater’s past. ‘We never knew that,” he said of Mr. Sater. “We do as much of
a background check as we can on the principals. I didn’t really know him very
well.” Trump said that most of his
dealings with Bayrock had been with its founder, Tevfik Arif, and that his son
Donald and his daughter Ivanka were playing active roles in managing the
project. Neither Bayrock nor Mr. Trump has been accused of wrongdoing.”
The Times
further reported:
Mr.
Sater has generally kept a low profile on the Trump projects, although he
mingled with guests and the owners at the September could jeopardize the brand
impression the brand makes.”
Mr.
Sater’s first brush with the law came in 1991. Mr. Sater and Mr. Klotsman were
at El Rio Grande, a Midtown watering hole, celebrating with a friend and
eventual co-conspirator, Salvatore Lauria, who had just passed his
stockbroker’s exam.
Mr.
Sater later told a judge that he was in a good mood, having made a quick $3,000
in commissions that day. But he got into an argument with a commodities broker
at the bar, and it quickly escalated. According to the trial transcript, Mr.
Sater grabbed a large margarita glass, smashed it on the bar and plunged the
stem into the right side of the broker’s face. The man suffered nerve damage
and required 110 stitches to close the laceration on his face.
“I
got into a bar fight over a girl neither he nor I knew,” Mr. Sater said in an
interview. “My life spiraled out of control.” Mr. Sater was convicted at trial
in 1993, went to prison and was effectively barred from selling securities by
the National Association of Securities Dealers.
But
according to the 2000 federal indictment in the fraud case, Mr. Sater, Mr.
Klotsman, Mr. Lauria and their partners gained control in 1993 of White Rock
Partners, which later changed its name to State Street Capital Markets.
Although the companies “held themselves out as legitimate brokerage firms,” the
indictment states, “they were in fact operated for the primary purpose of
earning money through fraud involving the manipulation of the prices of
securities.”
The
trio would secretly gain control of large blocks of stock and warrants in four
companies through offshore accounts, the indictment said. In an illegal “pump
and dump” scheme, they would inflate the value of the shares through
under-the-table payoffs to brokers who sold the securities to unsuspecting
investors by spreading false information about the companies. Brokers were
prohibited from acting on sell orders from investors unless they found another
buyer, the indictment said.
The
partners would then sell large blocks of stock at a steep profit. Investors
suffered substantial losses as share prices plummeted. Despite the prohibition
against selling securities, a subsequent complaint by regulators at the
N.A.S.D. recounted how Mr. Sater “cursed, yelled and screamed” at the firm’s
brokers in an attempt to motivate them. He also offered cash rewards to brokers
who sold the largest block of house stocks.
At
the same time, Mr. Sater, Mr. Lauria and others sought protection and help from
members of the Mafia in resolving disputes with “pump and dump” firms operated
by other organized crime groups. In 1995, for instance, Edward Garafola, a
soldier in the Gambino crime family, sought to extort money from Mr. Sater. Mr.
Sater, in turn, got Ernest Montevecchi, a soldier in the Genovese crime family,
to persuade Mr. Garafola to back off, according to the indictment.
The
denouement of Mr. Sater’s career on Wall Street began in 1998 at a locker at a
Manhattan Mini Storage in SoHo, where investigators discovered two pistols, a
shotgun and a gym bag stuffed with a trove of documents outlining the money
laundering scheme and offshore accounts of Mr. Sater and his partners.
According to a law enforcement official, as well as Mr. Klotsman and another
defendant in the case, Mr. Sater had rented the locker and then neglected to
pay the rent. Mr. Sater denied having anything to do with the locker or the
guns.
At
the time investigators opened the storage locker, Mr. Sater and Mr. Klotsman
had gone to Russia, where their wheeling and dealing continued, they said.
Their most interesting stories, however, are hard to assess.
Mr.
Sater and Mr. Klotsman tried to cut a deal with the C.I.A., according to a book
co-written by Mr. Lauria, “The Scorpion and the Frog: High Times and High
Crimes.” In exchange for leniency, the book said, they offered to buy a dozen
missiles that Osama bin Laden had placed on the black market. The deal later
collapsed.
Fast forward a decade, with Trump
installed in the White House as 45th President, and Mr Sater
re-surfaces on an on line investigative Blog, Talking Points Memo. at a
moment when several Congressional Committees and the Justic Department are
investigating the Trump Team past and present associations with Russia.
(“Another
Thought About Felix Sater:”; Talking Points
Memo, February 20, 2017 http://talkingpointsmemo.com/edblog/another-thought-about-felix-sater)
“It seems clear that the FBI and the
CIA knew quite a lot about Felix Sater. They worked with him and had him
performed services tied to 'national security' for over a decade. It seems
quite likely though we don't know for certain that he worked on the CIA's
behalf purchasing weapons on the Central Asian and post-Soviet black market in
the years when such weapons were easier to come by. If this is true, that also
certainly required him to have pretty deep relationships in the post-Soviet
criminal underworld and possibly with state actors as well. These specifics we
cannot be certain of. What is clear, from Court statements and the federal
governments actions is that Sater was performing services which the US
government considered very valuable and very secret.
Sater
was also clearly dirty. He had been convicted of securities fraud in league
with New York City organized crime families. He had been sued multiple times
for defrauding investors in other projects. He had also played a key role
arranging investments from Russian and post-Soviet sources to fund various
Trump enterprises. There are other things which may be true, for which there is
a substantial amount of circumstantial evidence. But everything I'm focusing on
here rests on very firm foundations.
“…Sater's business relationship with
Trump were extensive enough that there's little doubt that his FBI and likely
CIA handlers would have had some knowledge of them since he carried on this
relationship while working as an FBI/CIA informant and awaiting sentencing - at
least from 2003 to 2009 and perhaps going back to 2000.
Trump's
longstanding ties to Sater probably wouldn't have mattered much as long as
Trump was just a flashy real estate developer and reality TV star. But one can readily
imagine that US law enforcement and perhaps intelligence would have become
highly concerned once Trump - with his reliance on money from Russian oligarchs
and the post-Soviet criminal underworld - started edging his way toward the
presidency and especially after he won election on November 8th, 2016.
My
point here is that before US law enforcement and intelligence agencies learned
about the Russian hacking campaign, received intercepts about communications
between Trump advisors and Russian state officials or got hold of that
'dossier' from the former MI6 agent, they may well have had concerns about
Trump and the people around him that stemmed from things they learned long
before he ever decided to run for President.)
(See too: “Learning Eye-Popping
Details About Mr Sater,” ByJosh Marshall’ Talking Points Memo,
February 19, 2017; http://talkingpointsmemo.com/edblog/learning-eye-popping-details-about-mr-sater )
The hated NY Times picked up the issue of Trump associates’ links to Russia
in a story printed in mid-February this year, a month after the Trump
inauguration: and a key player was Felix
Sater. The paper revealed that
“A week before Michael T. Flynn
resigned as national security adviser [over links to Russia’s President Putin] , a sealed
proposal was hand-delivered to his office, outlining a way for President Trump
to lift sanctions against Russia.
Mr. Flynn is
gone, having been caught lying about his own discussion of sanctions with the
Russian ambassador. But the proposal, a peace plan for Ukraine and Russia,
remains, along with those pushing it: Michael D. Cohen, the president’s personal
lawyer, who delivered the document; Felix H. Sater, a business associate who
helped Mr. Trump scout deals in Russia; and a Ukrainian lawmaker trying to rise
in a political opposition movement shaped in part by Mr. Trump’s former
campaign manager Paul Manafort.
At a time when
Mr. Trump’s ties to Russia, and the people connected to him, are under
heightened scrutiny — with investigations by American intelligence agencies,
the F.B.I. and Congress — some of his associates remain willing and eager to
wade into Russia-related efforts behind the scenes.”
(“A Back-Channel Plan for Ukraine and Russia, Courtesy of Trump Associates,”
By MEGAN
TWOHEY and SCOTT
SHANE; New York Times, FEB. 19, 2017; https://www.nytimes.com/2017/02/19/us/politics/donald-trump-ukraine-russia.html)
Perhaps
the real reason Trump so hates the NY Times is not his delicate objection
to “fake news”, but its continued
publication of true stories of Trump’s past and present associations with
criminals, convicted felons and the mafia, especially in New York.
Such
inconvenient truths sully his new narcissistic self-image as America’s greatest
ever president
Backstory
Felix H. Sater
Russian-American
businessman with longstanding ties to the Trump Organization.
Felix H.Sater
Criminal convictions
In 1991, Sater got
into an argument with a commodities broker at the El Rio Grande restaurant and
bar in Midtown. He stabbed the man's
cheek and neck with the stem of a margarita
glass, breaking his jaw, lacerating his face, and severing
nerves.[10][1] Sater was
convicted of first degree assault in 1993 and served a year in prison.[2][11] This resulted in
Sater being barred from selling securities on the National Association of
Securities Dealers (now called the Financial Industry Regulatory Authority).
In 1998, Sater was
convicted of charges of fraud in connection to a $7.9 million penny stock pump and dump scheme through
his employer, White Rock Partners. In return for a guilty plea, Sater agreed to
assist the US government in issues of national security, working in Asia for
the CIA. He was
ultimately sentenced to a $25,000 fine, and no prison time as a result of
gratitude for service to his country. As a result of his assistance, Sater's
court records were sealed by Loretta Lynch.
Personal life
Sater resides in Port
Washington, New York. He is an active member of the Chabad
of Port Washington and was named their Man of the Year in 2010 and 2014.
“Donald Trump Settled a Real
Estate Lawsuit, and a Criminal Case Was Closed,” By MIKE McINTIRE; New York Times, APRIL 5, 2016: https://www.nytimes.com/2016/04/06/us/politics/donald-trump-soho-settlement.html
The Trump SoHo
building, a 46-story luxury condominium-hotel in Lower Manhattan. Credit Todd
Heisler/The New York Times
For Donald J. Trump, it is a long-held legal strategy, if
not a point of pride, to avoid knuckling under to plaintiffs in court.
“I don’t settle
lawsuits — very rare — because once you settle lawsuits, everybody sues you,”
he said recently.
But Mr. Trump
made an exception when buyers of units in Trump SoHo, a 46-story luxury condominium-hotel
in Lower Manhattan, asserted that they had been defrauded by inflated claims
made by Mr. Trump, his children and others of brisk sales in the struggling
project. He and his co-defendants settled the case in November 2011, agreeing
to refund 90 percent of $3.16 million in deposits, while admitting no
wrongdoing.
The backdrop to
that unusual denouement was a gathering legal storm that threatened to cast a
harsh light on how he did business. Besides the fraud accusations, a separate
lawsuit claimed that Trump SoHo was developed with the undisclosed involvement
of convicted felons and financing from questionable sources in Russia and
Kazakhstan.
And hovering
over it all was a criminal investigation, previously unreported, by the
Manhattan district attorney into whether the fraud alleged by the condo buyers
broke any laws, according to documents and interviews with five people familiar
with it. The buyers initially helped in the investigation, but as part of their
lawsuit settlement, they had to notify prosecutors that they no longer wished
to do so.
The criminal
case was eventually closed.
Mr. Trump’s
campaign for the Republican presidential nomination rests on the notion,
relentlessly promoted by the candidate himself, that his record of business
deals has prepared him better than his rivals for running the country. An
examination of Trump SoHo provides a window into his handling of one such deal
and finds that decisions on important matters like whom to become partners with
and how to market the project led him into a thicket of litigation and
controversy.
Trump SoHo is
one of several instances in which Mr. Trump’s boastfulness — a hallmark of his
career and his campaign — has been accused of crossing the line into fraud.
Other lawsuits have charged that he peddled worthless real estate sales courses
and misled investors into thinking he had built hotels when in fact he had only
licensed his name to them. He has won several cases at trial and is continuing
to fight others.
Alan Garten,
the general counsel for the Trump Organization, said that the condo buyers’
lawsuit was not focused on Mr. Trump himself “in any material way” and that
there was little reason not to settle it, adding that it cost Mr. Trump
nothing. “It was solely a function of returning deposits,” Mr. Garten said.
He described
the case as “buyer’s remorse,” in which people who bought real estate at the
wrong time turned to the courts to recoup their investment.
Mr. Garten
would not talk about the criminal investigation or whether it was a factor in
the decision to settle.
“The terms of the settlement are confidential,
and thus I’m not at liberty to discuss them,” he said.
The district
attorney’s office declined to comment, saying it could not provide information
on “a criminal investigation which does not result in an arrest or
prosecution.”
When Mr. Trump
and his co-defendants made the decision to settle the condo buyers’ lawsuit in
2011, it was a far cry from the heady days of 2006, when Mr. Trump closed an
episode of his hit television show “The Apprentice” with a splashy plug for
Trump SoHo. In typical Trump fashion, he piled on the plaudits for “my latest
development.”
“When it’s completed in 2008,” he said, “this
brilliant $370 million work of art will be an awe-inspiring masterpiece.”
Photo
Mr. Trump with
Tevfik Arif, center, and Felix H. Sater at the official unveiling of Trump SoHo
in September 2007, when it was still under construction. Credit Mark Von
Holden/WireImage
Jumping In With New Partners
To the artists
and creative types inhabiting its trendy downtown Manhattan neighborhood, Trump
SoHo was an oxymoron from the start. Many of them loudly opposed a huge glass
tower at 246 Spring Street that would stab the sky high above its low-key
surroundings.
Advertisement
If the plans
for it attracted controversy, so too would the company most responsible for its
development: Bayrock Group.
Mr. Trump was
foggy on how he first came to do business with Bayrock, a small development
company whose offices were in Trump Tower in Midtown. In a deposition a few
years ago, he said it might have been a Bayrock associate, Felix H. Sater, who
first approached him in the early 2000s.
Mr. Sater, a
Russian immigrant, had recently joined Bayrock at the behest of its founder,
Tevfik Arif, a former Soviet-era commerce official originally from Kazakhstan.
Bayrock, which was developing commercial properties in Brooklyn, proposed that
Mr. Trump license his name to hotel projects in Florida, Arizona and New York,
including Trump SoHo.
The other
development partner for Trump SoHo was the Sapir Organization, whose founder,
Tamir Sapir, was from the former Soviet republic of Georgia. In addition to
receiving a licensing agreement, Mr. Trump would manage the completed
condo-hotel, and he was also given a minor equity interest in it.
Emails and
testimony in several lawsuits show that Mr. Sater and Mr. Arif worked closely
with Mr. Trump and others in the Trump Organization. Mr. Trump was particularly
taken with Mr. Arif’s overseas connections. In a deposition, Mr. Trump said
that the two had discussed “numerous deals all over the world” and that Mr.
Arif had brought potential Russian investors to Mr. Trump’s office to meet him.
“Bayrock knew the people, knew the investors,
and in some cases I believe they were friends of Mr. Arif,” Mr. Trump said.
“And this was going to be Trump International Hotel and Tower Moscow, Kiev,
Istanbul, etc., Poland, Warsaw.”
What sort of
due diligence Mr. Trump did before jumping in with his new partners is unclear.
But he, as well as many others, apparently missed some dark spots on Mr.
Sater’s résumé. Mr. Garten said the Trump Organization typically did a
background check on potential business partners like Bayrock, but not on their
individual employees, so nothing about Mr. Sater would have turned up.
Mr. Sater was
convicted and sent to prison in 1993 after a New York bar fight in which he
stabbed a man in the face with a broken margarita glass. That was a matter of
public record. However, what few people beyond insiders at Bayrock knew was
that five years later, Mr. Sater was implicated in a huge stock manipulation
scheme involving Mafia figures and Russian criminals — and that he became a
confidential F.B.I. informant.
Recently
unsealed federal court records show that Mr. Sater helped the government
disrupt an organized crime ring on Wall Street and deal with an unexplained
national security matter involving his foreign connections. He was not the only F.B.I. informant in
Bayrock’s offices. Another was Salvatore Lauria, an associate of Mr. Sater, who
sometimes showed up to work wearing a court-ordered ankle monitor. Mr. Lauria
brokered a $50 million investment in Trump SoHo and three other Bayrock
projects by an Icelandic firm preferred by wealthy Russians “in favor with”
President Vladimir V. Putin, according to a lawsuit against Bayrock by one of
its former executives. The Icelandic company, FL Group, was identified in a
Bayrock investor presentation as a “strategic partner,” along with Alexander
Mashkevich, a billionaire once charged in a corruption case involving fees paid
by a Belgian company seeking business in Kazakhstan; that case was settled with
no admission of guilt.
Photo
Mr. Trump in
2010 with, from left, his children Eric, Ivanka and Donald Jr. at the Trump
SoHo ribbon-cutting ceremony. Credit Jessica Rinaldi/Reuters
Slowing Sales and a Lawsuit
The official
unveiling of Trump SoHo in September 2007 was quintessential Trump: a
red-carpet announcement followed by a big bash, where flavored vodka flowed,
dancers whirled and models wandered about. Amid the hoopla, Mr. Trump took the
microphone to extol the greatness of the project. Standing beside him, beaming,
were Mr. Arif and Mr. Sater.
The timing of
Trump SoHo’s completion and marketing could hardly have been worse. The real
estate bubble was bursting, and the global economy was on the brink of crisis
as the developers began advertising luxury condo-hotel units costing as much as
tens of millions of dollars.
The economics
of the investment were largely untested in New York real estate. To get around
residential zoning restrictions, owners of Trump SoHo units were allowed to
live in them only 120 days a year. The rest of the time, the units would be
rented as hotel rooms, with the owners sharing in the revenue.
The project was
marketed aggressively to potential investors overseas, where exchange rates
were favorable and the Trump brand carried a certain cachet. Many early buyers
were from Europe, including a French former soccer star, Olivier Dacourt, who
put down a deposit of $460,400 on a $2.3 million unit.
After an
initial flurry of activity, the pace of sales slowed considerably. In addition
to the economic decline, Trump SoHo was jolted by bad publicity when The New
York Times published an article in December 2007 revealing Mr. Sater’s
criminal past.
According to
data the Trump SoHo developers filed with state and federal agencies, only 15
to 30 percent of the units had been sold by the start of 2009. But those
numbers did not come close to the grand-sounding sales figures promoted,
publicly and in private, by people affiliated with Trump SoHo, according to a
lawsuit filed in August 2010 by Mr. Dacourt and other people who had bought
units.
In June 2008,
Mr. Trump’s daughter Ivanka was quoted in a Reuters article saying that about 60 percent of the
units had been sold. In April 2009, Mr. Trump’s son Donald Jr. appeared in
another news article saying that 55 percent of the units
were sold by March of that year. More purported cases of puffery occurred in
emails and statements by sales agents.
The lawsuit
also suggested that Mr. Trump had contributed to the deception, citing a claim
he made at the project’s unveiling. Depending on the news account, he said
3,200 prospective purchasers either had signed up to see the units or had
requested applications to buy them; the plaintiffs argued that this figure was
exaggerated, given how few units had actually been sold at the time. The Trumps
and the other defendants denied that there had been any deception.
The inflated
numbers were more than just harmless self-promotion and amounted to fraudulent
enticement of investors, who believed they were buying into a project that was
healthier than it actually was, said Adam Leitman Bailey, the lawyer
representing the buyers.
“They relied on these misrepresentations to
their detriment,” he said.
The people
familiar with the criminal investigation said that not long after Mr. Bailey’s
lawsuit was filed, the district attorney’s office began looking into the
allegations it had raised. These people insisted on anonymity for fear of legal
repercussions from speaking about confidential agreements or sealed criminal
matters.
Documents
reviewed by The Times, including a state grand jury subpoena, make clear that
an area of focus for prosecutors was determining whether the accusations in Mr.
Bailey’s lawsuit rose to the level of a crime. The investigation was being
handled by the Major Economic Crimes Bureau.
Photo
Trump SoHo’s
condo-hotel concept did not pan out, but the property remained open and became
a popular luxury hotel. Credit Todd Heisler/The New York Times
Gradually Cutting Ties
Shortly before
the condo buyers’ lawsuit was filed, another suit appeared, this one by Jody
Kriss, a former finance director of Bayrock. It claimed that by concealing Mr.
Sater’s criminal record, Bayrock had committed fraud on banks and investors
with which it did business. Mr. Trump is not a defendant in that case, which is
continuing.
Mr. Kriss’s
lawsuit was filled with unflattering details of how Bayrock operated, including
allegations that it had occasionally received unexplained infusions of cash
from accounts in Kazakhstan and Russia. Bayrock and Trump SoHo drew more
negative headlines in October 2010, when news spread from Turkey that Mr. Arif
had been aboard a luxury yacht raided by the police, who were investigating a
suspected prostitution ring that catered to wealthy businessmen. He was charged
but later acquitted.
The next year,
when it was clear that Mr. Bailey’s lawsuit would be allowed to proceed and
with the district attorney’s criminal investigation continuing, Mr. Trump and
his co-defendants agreed to settle the condo buyers’ suit. The financial terms
were announced publicly, but another part of the settlement was kept secret.
That part
required the plaintiffs to notify any investigative agency with which they “may
have previously cooperated” that they did not want to “participate in any
investigation or criminal prosecution” related to matters in the lawsuit,
according to a confidentiality agreement signed by more than 20 people. The
plaintiffs could respond to a subpoena or court order, but would also have to
notify the defendants that they had received it, the agreement said. The
criminal investigation was closed sometime afterward.
As for Trump
SoHo, the condo-hotel concept did not pan out. Only about a third of the units
were ultimately sold, and one of the project’s lenders foreclosed on the rest,
although the property remained open and became a popular luxury hotel, still
managed by Mr. Trump’s company.
Mr. Sater left
Bayrock after the news of his criminal background was reported. But even after
that, his association with Mr. Trump did not end. The Trump Organization later
gave him a business card identifying him as a “senior advisor” to Mr. Trump, as
well an office. Mr. Garten, the general counsel for the organization, said that
Mr. Sater was never an employee, but that he had worked independently to steer
potential deals to Mr. Trump. The arrangement lasted about six months, Mr.
Garten said. Mr. Sater declined to comment on his dealings with Mr. Trump or
with Bayrock.
By the time Mr.
Trump sat for a deposition in a lawsuit in November 2013, it was clear he no
longer saw the benefit of knowing the Bayrock executives with whom he had once
completed big deals. He said he barely knew Mr. Arif: “I mean, I’ve seen him a
couple of times; I have met him.”
As for Mr.
Sater, “if he were sitting in the room right now,” Mr. Trump said, “I really
wouldn’t know what he looked like.”
A version of
this article appears in print on April 6, 2016, on Page A1 of the New York
edition with the headline: Trump Settled Suit, and Legal Storm Blew Over.
Photo
Michael D.
Cohen, second from left, Mr. Trump’s personal lawyer, with Michael T. Flynn,
left, and former Gov. Rick Perry of Texas at Trump Tower in December. Mr. Cohen
delivered the peace plan to Mr. Flynn a week before Mr. Flynn resigned as
national security adviser. Credit Sam Hodgson for The New York Times
Mr. Artemenko
said a mutual friend had put him in touch with Mr. Sater. Helping to advance
the proposal, Mr. Sater said, made sense.
“I want to stop a war, number one,” he said.
“Number two, I absolutely believe that the U.S. and Russia need to be allies,
not enemies. If I could achieve both in one stroke, it would be a home run.”
After speaking
with Mr. Sater and Mr. Artemenko in person, Mr. Cohen said he would deliver the
plan to the White House.
Mr. Cohen said
he did not know who in the Russian government had offered encouragement on it,
as Mr. Artemenko claims, but he understood there was a promise of proof of
corruption by the Ukrainian president.
“Fraud is never
good, right?” Mr. Cohen said.
He said Mr.
Sater had given him the written proposal in a sealed envelope. When Mr. Cohen
met with Mr. Trump in the Oval Office in early February, he said, he left the
proposal in Mr. Flynn’s office.
Mr. Cohen said
he was waiting for a response when Mr. Flynn was forced from his post. Now Mr.
Cohen, Mr. Sater and Mr. Artemenko are hoping a new national security adviser
will take up their cause. On Friday the president wrote on Twitter that he had four new candidates for
the job.
Correction:
February 19, 2017
Because of an
editing error, an earlier version of this article gave an incorrect middle
initial for Paul Manafort. It is J., not D.
Megan Twohey
reported from New York, and Scott Shane from Washington. Michael Schwirtz
contributed reporting from Kiev, Ukraine.
Get politics
and Washington news updates via Facebook, Twitter and in the Morning Briefing
newsletter.
A version of
this article appears in print on February 20, 2017, on Page A1 of the New York
edition with the headline: Trump Associates Push Backdoor Ukraine Plan.
The
Scorpion and the Frog: High Times and High Crimes (Hardcover)
by Donato Ripelli (Author), Salvatore
Lauria (Author)
EXCLUSIVE:
Donald Trump may have reviewed construction contracts for Trump SoHo – where
worker fell to his death
http://www.nydailynews.com/new-york/donald-trump-contracts-trump-soho-depo-witness-article-1.2304352
 |
www.nydailynews.com
EXCLUSIVE: Donald Trump may have reviewed
construction contracts for Trump SoHo – where worker fell to his death
|
email
A form used in
concrete pouring gave way and a worker fell 40 stories to his death during the
construction of the Trump SoHo hotel. A second worker also fell but landed in a
net, suspended hundreds of feet above Spring St.
(SAVULICH, ANDREW)
NEW YORK DAILY NEWS
Sunday, July 26, 2015,
2:30 AM
During construction of Donald Trump’s
glitzy Trump SoHo hotel in lower Manhattan, tragedy struck hundreds of feet
above the city.
A form used in concrete pouring gave way
and a worker fell 40 stories to his death. A second worker also fell but landed
in a net, suspended hundreds of feet above Spring St.
At the time of the 2008 tragedy, Trump
said he had little to do with the project, explaining that he’d simply licensed
his name to it — an arrangement he’s made with numerous developers.
But a deposition obtained by the Daily
News shows he may have been much more involved and even may have reviewed the
contract of the firm that was ultimately cited in the fatal accident.
That firm, Difama Concrete, had earned a
notorious reputation for job safety violations in Manhattan before it began
work at Trump SoHo.
By 2008, Difama had been hit with 17
serious violations by the Occupational Safety & Health Administration and
tagged with $109,000 in fines for its work in New York, records show.
That included a November 2004 incident
in which a Difama worker fell 30 feet to his death from a tower at 350 W. 53rd
St. Difama faced three violations and $10,500 in fines over the incident; it
settled with a $3,500 payment.
Difama was also cited by OSHA for a
November 2006 accident at 250 E. 53rd St. in which one of its workers was
seriously injured when he fell 18 feet onto an area with “sharp projecting
objects.”
A deposition obtained
by the Daily News shows Trump may have been much more involved and even may
have reviewed the contract of the firm that was ultimately cited in the fatal
accident.
(MIKE PONT/WIREIMAGE)
In that case, OSHA slapped Difama with
five more violations and $50,000 in fines. Difama settled for $29,000.
The terrible 2004 accident repeated
itself on Jan. 14, 2008, as workers poured concrete on the 42nd floor of Trump
SoHo.
The forms holding the concrete
collapsed, and Difama worker Yurly Vanchytsky, 53, fell to his death 42 stories
below. Co-worker Francesco Palizzotto, then 46, fell into a net on the 40th
floor and was covered with concrete.
Palizzotto survived but opened his eyes
to find he was suspended hundreds of feet above the street. He was left
traumatized and unable to work again, said his attorney Walter Roura.
“He went off the deep end. He suffered a
traumatic brain injury,” Roura recalled.
Following the accident, OSHA cited
Difama for multiple violations and demanded $68,000 in fines. Difama settled
for $40,000.
The hotel was being built by a developer
called the Sapir Organization in partnership with Trump in a deal that allowed
for the use of Trump’s name.
1 | 2At the time of the
2008 tragedy, Trump said he had little to do with the project, explaining that
he’d simply licensed his name to it.(SAVULICH,
ANDREW)
But a top official at Bovis Lend Lease,
the general contractor hired to construct the hotel, noted that Trump
personally reviewed all of the trade contracts.
In a deposition taken during one of
several lawsuits that came out of the accident, Jan Sokolowski, then Bovis’
general superintendent on the Trump SoHo job, testified that Trump and several
of his children were all personally involved during construction of the hotel.
Describing the arrangement, he said, “I
believe they have some agreement to use his name and also review contracts.”
Attorney David Cook asked him, “When you
say ‘review contracts,’ what type of contracts are you referring to that Trump would
review?”
“Contracts with trade,” Sokolowski said.
“Would that include Difama?” Cook asked.
“Yes.”
1 | 2In a deposition taken
during one of several lawsuits that came out of the accident, Jan Sokolowski,
then Bovis’ general superintendent on the Trump SoHo job, testified that Trump
and several of his children were all personally involved during construction of
the hotel.(NATI HARNIK/AP)
Sokolowski admitted he didn’t know if
Trump had initialed the Difama contract.
But he said he believed Trump had seen
it, stating, “I was not part of those meetings, but I do know that Donald did
review the contracts.”
Alan Garten, executive vice president
and general counsel for the Trump Organization, said Trump was involved in
reviewing the hotel’s plans but not in hiring contractors.
“That’s not true. He may have reviewed
plans, but he’s not involved in selection of the contract,” Garten said.
Garten said Trump had “no knowledge” of
Difama’s prior safety record.
Trump was “not the developer,” Garten
said.
“He’s not the owner. He did not oversee
construction and he was not involved in selection of the contracts. He licensed
his name and he manages the project. I’m sorry. He manages the hotel — not the
project.”
In his deposition, Bovis’ Sokolowski
noted that Trump’s daughter Ivanka and son Donald Jr. were also “involved in
the design” and were at the site on “at least a monthly basis.”
SEARCH
Worker Is Killed
in Accident at Trump SoHo Tower
 |
cityroom.blogs.nytimes.com
Officials have confirmed that a construction
worker died at the site of the planned Trump SoHo hotel and condominium tower
at 246 Spring Street in Manhattan.
|
JANUARY
14, 2008 2:31 PMJanuary 14, 2008 2:31 pm
An injured worker was lowered from the
site of a construction accident at the Trump SoHo hotel and condominium tower.
A second worker was killed, city officials said, after he fell from the 42nd
floor. (Photo: Spencer Platt/Getty Images)
Updated,
8:46 p.m. | A construction worker plunged to
his death, and two others were injured, after a wooden structure on the 42nd
floor of the Trump SoHo hotel and condominium tower under construction in
Manhattan collapsed, city officials said. The building, which is to rise 46
stories, has been a persistent source of debate, with community groups
complaining about its size and proposed use, even before construction began
last May.
The
worker fell from the 42nd story — the uppermost story built so far — at 1:52
p.m. when the wooden structure broke apart while concrete was being poured into
it, Assistant Chief Thomas Galvin of the Fire Department said at an afternoon
news conference. A second worker fell from the 42nd story but was saved by some
netting around the 40th floor. That worker was hospitalized with injuries. One
other worker suffered minor injuries. All three workers were employed by DiFama
Concrete, a concrete subcontractor for Bovis Lend Lease, the general
contractor.
Witnesses
reported that a large number of firefighters and emergency medical workers
converged on the area, at the hotel and tower, at 246 Spring Street near Varick
Street, west of the heart of SoHo, as did police officers from the First
Precinct.
The
accident tangled traffic in the area, especially around the entrance to the
nearby Holland Tunnel late into the afternoon.
The
company managing work at the site, Bovis Lend Lease, is the same company that
oversaw demolition of the former Deutsche Bank building in Lower Manhattan,
where two firefighters were killed in August in a blaze that swept through the
contaminated structure.
The
Buildings Department announced in the late afternoon that it had ordered all
work stopped at the building. The department said in a statement:
Preliminary
reports indicate the concrete formwork on the 42nd floor failed, leading to
part of the formwork collapsing onto the 40th floor. Buildings forensic
engineers have determined the new building under construction is not in danger
of further collapse and the crane at the site is stable.
Buildings
forensic engineers are conducting interviews and assessing the construction
site to determine the exact cause of the partial collapse.
The
Buildings Department is vacating the top two floors of two neighboring buildings,
145 and 155 Sixth Avenue, as a safety precaution. The vacate orders will remain
in effect until the general contractor at 246 Spring Street, Bovis Lend Lease,
makes the construction site safe.
The
department also announced that it had issued four violations to Bovis Lend
Lease for failing to safeguard the public and property, maintain adequate
housekeeping, provide a fire escape hatch, and provide adequate fire
extinguishers.
The Trump SoHo tower is being
developed by the Trump
Organization, the Bayrock Group and the Sapir Organization.
Last month, The New York Times reported that an
employee of the Bayrock Group who is involved in the project, Felix H. Sater,
was accused by federal authorities in 1998 of money laundering and stock
manipulation in a federal complaint that remains under seal. A subsequent
indictment in 2000 stemming from
the same investigation described Mr. Sater as an “unindicted co-conspirator”
and an important figure in a $40 million scheme involving 19 stockbrokers and organized
crime figures from four Mafia families.
The indictment asserted that Mr. Sater helped create fraudulent stock
brokerages that were used to defraud investors and launder money.
Mr.
Sater and his lawyer, Judd Burstein, repeatedly refused to discuss in detail his
role in the stock scheme. Mr. Sater now spells his last name Satter, he said,
in an attempt to distance himself from the past. Neither Bayrock nor Mr. Trump
has been accused of wrongdoing.
In
September, Mr. Trump and his three children held a news conference at the tower
to announce details of the project, even as dozens of opponents gathered
outside in protest, holding up placards that read “Dump
the Trump” and “Don’t Comb Over Here.”
The
building will include 400 apartments priced at more than $3,000 per square
foot; those apartments will range from 425 square-foot studios to suites of
more than 10,000 square feet. Owners will be permitted to live in those
apartments for 120 days out of the
year, or 29 days out of any consecutive
36 days; when not living there, owners
will be able to rent out their apartments.
As
Rob Walker noted in The Times Magazine in October, SoHo long ago shed its reputation
as a scruffy
haven for artists. The project is being cast as “the
downtowning of Trump,” Mr. Walker wrote.
A
coalition of public officials and community groups have opposed the project,
including several state and city lawmakers, the Municipal Art Society and four
Community Boards in Manhattan.
“Once
the city issued the building permit, the only recourse was to take the city to
court, and that is in process,” said Andrew Berman, executive director of one
of the groups, the Greenwich
Village Society for Historic Preservation, which has argued
that the zoning for the site does not permit a hotel-condominium, an interpretation
the city has disagreed with. “Neighbors have commented on the phenomenal pace
of construction, which some speculated was an attempt to head off the legal
challenge. People were amazed at how quickly the construction seemed to go. So
tragically, in some ways this is not surprising.”
The
city’s Board of Standards and Appeals, where the appeal of the Buildings
Department’s decision was filed, has not yet set a date to hear the case. “The
city has seemed to do everything in its power to shepherd this through and put
the brake on community challenges,” Mr. Berman said.
In
a statement, the Manhattan borough president, Scott M. Stringer, said that
safety violations at the construction site had been reported in recent months:
The
accident at the new hotel at 246 Spring Street is another example of the
dangerous conditions created by rushed construction in Manhattan. My office did
an initial investigation of violations at the site and discovered that there
were two Class A violations issued on Oct. 26, 2007. These violations are
considered high risk. However, the construction was allowed to continue
unchecked and the Environmental Control Board hearing to review the violations
was not scheduled until Jan. 24, 2008.
This
is unacceptable. The death and injury of construction workers and the
compromised safety of emergency responders and surrounding community should not
be considered the cost of doing business in Manhattan. Any type of high risk
violation should necessitate a halt of unsafe work until the violation is
cured. I will continue to investigate this matter and look to see rapid
response from all relevant city agencies. I applaud the fire, police and other
emergency responders for their bravery and for putting themselves at risk to
ensure the safety of all New Yorkers.
The
City Council speaker, Christine C. Quinn, said in a statement:
I
want to express my deepest condolences to the family of the worker who was
killed in today’s accident at the Trump Soho construction site, and my thoughts
and prayers remain with the two others who remain injured at St. Vincent’s
Hospital. I continue to monitor the situation closely, and we will remain in
close contact with the Office of Emergency Management, the Department of
Buildings, and all other relevant agencies as we work to determine the cause of
this terrible accident, and to prevent similar incidents from happening in the
future.
Later
this afternoon, the Buildings Department said 11 construction-related
Environmental Control Board violations had been cited at 246 since construction
began in May 2007. The prior violations included violations for operating the
crane in an unsafe manner, failing to provide a flagman during hoisting
operations and failing to close the sidewalk before hoisting loads over the sidewalk.
Eight of the 11 violations were issued to Bovis Lend Lease.
At
the afternoon news conference, Patricia J. Lancaster, the commissioner of the
Buildings Department, said that remedial work would continue this evening to
clear away debris from the site. No construction work will resume on the
building until the department is convinced that work can be performed safely,
she said.
Aurora
Kessler, a spokeswoman for the Trump SoHo project, referred a request for
comment to Mary Costello, a spokeswoman for Bovis Lend Lease. Ms. Costello said
in an e-mail message sent several hours later, “We are in the process of
conducting our own investigation with our concrete subcontractor, while working
with local authorities, to determine the cause of this tragic accident. Our
hearts go out to the family of the deceased concrete worker and our prayers are
with the injured workers.”
Charles
V. Bagli, Al Baker, Thomas J. Lueck and Mathew R. Warren contributed reporting.
