Civil Tax Fraud Case Dismissed Against Trump Associate Felix Sater

Only six months after a Freedom of Information motion was filed by Forbes Media LLC and Richard Behar in the United States Court of Appeals for the Second Circuit, New York, the civil tax fraud case filed against Felix H. Sater in Manhattan was dismissed in early December 2017.

Sater, a closely-connected associate of Donald Trump and co-founder of Bayrock with Tevfik Arif, and Sater’s attorney, Robert Wolf, confirmed the dismissal of the civil suit on grounds of merit.

The motion would have allowed the public’s right of access to certain court filings pertaining to Donald Trump’s connections to the Russian mafia, as well as his business dealings with Sater, Arif, and others involved in the noted transactions.

The civil tax fraud case was filed “qui tam,” meaning that a whistleblower by the name of Fred Oberlander could file suit on behalf of the State of New York and the attorney general’s office would then have to decide whether or not to intervene in the case. In this particular case, Attorney General Eric Schneiderman would not intervene in the case and also notified the New York Supreme Court that Oberlander had published a ‘misleading’ press release about the decision, making it appear as if they would pursue.

Oberlander, a lawyer who once represented Sater’s former business partner, Jody Kriss, in a money-laundering suit against Bayrock, attempted to use information in his own argument that was stricken from the records by federal judges in New York.

Schneiderman did say, however, that the AG’s office would ‘continue to monitor the case going forward’ to protect the state’s rights and interest. In December 2017, a judge did rule that the case could move forward or proceed as a potential racketeering case.

Bayrock is said to have been a “covertly mob-owned and operated business entity,” per Business Insider.

In the original filing, Kriss accused Sater and Bayrock’s founder, Tevfik Arif, of cheating him out of millions of dollars, along with a list of other types of financial misconduct. Kriss alleged that Sater and Arif negotiated with Trump’s organization in 2003 to market certain projects, but that Trump was unaware of Sater’s criminal past at the time.

When deposed in 2007, Trump said his organization was not aware of Sater’s past when they partnered on the development of ‘Trump SoHo,’ which is a clear indication of the failure of the Trump Organization to invest properly into corporate due diligence before making business deals.

Trump has recently disavowed any knowledge of connections to Sater and states that he would not recognize him if he saw him; but an anonymous person close to the business dealings stated that Sater and Trump had weekly “standing” meetings. Sater has also said that he met with Trump on a constant basis, according to a Bloomberg report. Trump’s own words in a 2007 deposition were that it was “ridiculous” for him not to invest in Russia, as it was “one of the hottest places in the world for investment,” though he was not clear on the exact nature of the business deals between the Trump Organization and Sater.

Special Counsel Robert Mueller is currently investigating the involvement of Russia in the 2016 interference of the Electoral College in the election that elevated Trump to the White House past Hillary Clinton’s win on the popular vote.

Bayrock’s office – once located in the same building with Trump Tower on Fifth Avenue – was still affiliated with the Trump organization as of November 2017. Business Insider reported on November 23 that Trump had recently decided to end his ties with Sater due to Mueller’s investigation.