Trump's Kazakh Mafia Connection

The Donald and Felix

It's almost a year ago that I wound up in a former piece of the Soviet Union, Azerbaijan, a central Asia kleptocracy where Donald and Ivanka Trump were in business with local mobsters laundering money for the Iranian Revolutionary Guard. But Azerbaijan was hardly the only former part of the Soviet empire where Trump was trying to make a buck. Tonight, David Cay Johnston's DCReport.org broke a story about Trump and the Kazakh mobsters.

Kazakhstan is a huge country with something like 18 million people, rich in natural resources. The current authoritarian president, Nursultan Nazarbayev, was the First Secretary of the Communist Party in 1989 and then "became" president. He was elected in 2015 with 98% of the vote and is widely considered one of the most corrupt despots in the world. Richard Behar, writing for DCReport, asks if "a former Mob connected huster-- a real estate developer who in 2010 worked on the same floor as Donald Trump as his 'Senior Advisor'-- is threatening to spill some beans that could harm the President’s reputation? Sure looks that way, based on an intriguing Wall Street Journal story that exposed aspects of a bitter feud between two of Trump’s former key business associates. The newspaper revealed that the Russia-born Felix Sater-- a twice-convicted one-time Mafia associate-- is demanding hush money from a former boss, Kazakhstan-born Tevfik Arif, whose Bayrock Group worked in a close partnership for nearly a decade with the Trump Organization."

Sater warned Arif, in writing, that news headlines will read: “The Kazakh Gangster and President Trump,” unless Arif forks over $3.5 million to reimburse Sater for legal expenses he claims he’s owed, the Journal reported.   Specifically, Sater is threatening to reveal negative information about Arif’s “past relationship with President Trump and the Republic of Kazakhstan”—as well as Arif’s alleged connections to “organized crime figures and his business activities in Kazakhstan,” which involve “dealings in the post-Soviet metals industry there.”

Spokespeople for Bayrock and Arif have called the allegations “unsubstantiated falsehoods.” The general counsel of Trump Organization didn’t respond to calls and emails.

Sater, however, may not even need the dough.  I’ve discovered that he and a former Trump Organization colleague, Daniel Ridloff, received roughly $20 million-- in a settlement of a case that is linked to an alleged multi-billion-dollar global money laundering scheme originating in Kazakhstan, and stretching to Russia and the U.S.

Specifically, both men were accused in a 2013 complaint filed by a Swiss financier of absconding with nearly $43 million from the sale of an Ohio shopping mall (Tri-County Mall near Cincinnati) to-- American Pacific International Capital (APIC). That company is based in San Francisco. One of the directors is businessman Neil Bush—the son of former President George H.W. Bush and brother of former President George W. Bush.

In the shopping center complaint, the financier included an exhibit-- a 2007 New York Times article that revealed numerous details about Sater’s criminal past. The article said Sater had pled guilty and become a cooperating federal witness. Sater’s cooperation agreement was unsealed by a federal judge in 2013, but many other documents in related cases are under court seal.

Five days after the Tri-County mall complaint was filed, the case was settled.

Neither Sater or Ridloff, whose LinkedIn bio says he worked in “Acquisitions & Finance” in 2010 for the Trump Organization, will comment about the subject. In his own LinkedIn bio, Sater describes himself as a former “Senior Advisor to Board of Directors” of one of Neil Bush’s oil companies (TxOil) that once drilled in Turkmenistan, an oil-rich part of the former Soviet Union.

Bush tells me he’s never heard of Sater. Bush also says that the mall was purchased for $43 million by APIC at a public auction, and then transferred to a Singapore publicly-held real estate company that he chairs called SingHaiyi Group.  “I helped the group [SingHaiyi] find the property through a friend,” he says.  When told about the subsequent litigation against Sater and Ridloff, Bush says: “I don’t remember anything like that.  We bought it at a sheriff’s auction. If the funds filtered through some undesignated [entity] or intermediary, I’m unaware of that.”

A second lawsuit filed in U.S. Federal Court (Southern District of New York) may shed additional light on Sater and Ridloff’s Kazakhstan-related business activity. In this case, the Bank of London and the Middle East (BLME; once the largest bank in Kazakhstan) and the government of Almaty (the country’s largest city) are accusing three Kazakh men-- a former Almaty mayor, his son, and a former chairman of BLME-- of absconding with billions of dollars and laundering the money.

The defendants-- Victor and Ilyas Khrapunov, and Mukhtar Ablyazov, respectively-- deny the allegations and claim the charges are politically motivated.

That’s not the view of Matthew L. Schwartz, a former federal prosecutor, now in private practice at the prestigious law firm of Boies Schiller Flexner, who represents the city of Almaty and the bank. “The international financial fraud perpetrated by Ablyazov, Victor and Ilyas Khrapunov, and their associates is as large and far-flung as they come,” Schwartz says.  “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 everyplace else.”

Schwartz adds: “We’ll follow the money stolen by these fugitives wherever they may try to hide it.” (A Switzerland-based spokesperson for the family welcomed questions, but declined to respond to any.)

Needless to say, the saga-- a saga within a saga-- is very complicated. A declaration in the Khrapnukov case is by Nicolas Bourg, who happens to be the same Swiss financier who accused Sater and Ridloff of stealing the $43 million from the Ohio mall deal. In the declaration, he says that he was president of a real estate fund (named Swiss Development Group, or SDG) that was controlled by the Khrapunov family “and used to conceal the movement and investment of his family’s money.”

Time out. Where does Trump fit into all this? In October, the Financial Times revealed that three Trump Soho condos in Manhattan were bought in 2013 with $3.1 million that came from the alleged Khrapunov laundering caper. Trump Soho was 18% owned by Trump at the time. There is no evidence that Trump was involved or knowledgeable about the Khrapunovs. But he seems to have benefitted.

In addition, bank statements submitted by City of Almaty lawyers indicate that the ultimate beneficiary of the companies that bought the condos was Elvira Kudryashova-- the California-based daughter of Victor Khrapunov. The FT reported that correspondence and company documents seen by the newspaper showed that Sater and Ridloff worked closely with Kudryashova in 2012.

“They agreed to serve as directors of a company through which she would pour $3 million into a business venture as part of her efforts to secure a U.S. investor visa,” wrote the newspaper.

Sater and Ridloff, my reporting shows, ran the U.S. arm of the Krapunov’s SDG entity at the time. Another connection is in the Linked-In bio of Ridloff’s, where he refers to himself as the former vice president of SDG-Investment Fund.

Bourg, the Swiss financier alleging fraud in the Ohio mall sale, maintains in his declaration that a shell entity he created in Luxembourg-- Triadou-- was an investment vehicle wholly-owned and controlled by SDG.  Bourg states that Triadou was also the entity used to buy the Ohio shopping mall.

An exhibit with the declaration from Swiss financier Bourg includes emails to Felix Sater and others in 2014 with “swift code” details for an account at a now-defunct rogue bank that was headquartered in Dubai. Swift codes are used for international money transfers. In 2015, the bank BLME, formerly Bank of the Middle East, was banned from operating in the U.S. due to money laundering and terror financing allegations. The email to Sater cites an entity called Telford International, which was allegedly used to move the money to BLME.

And-- closing the circle-- Telford was used to fund Triadou, the entity that bought and sold the Ohio mall, according to Bourg.

DCReport.org has obtained an audio recording in which three of Bayrock’s top four executives can be heard discussing coal and oil projects involving Bayrock and Sater, in which the name “Khrapnukov” and “his son” are mentioned. The recording was made in Bayrock’s offices in the Trump Tower in 2008. In all likelihood, the references are to Victor Khrapnukov and his son Ilyas.

The recording was made just three months before Victor reportedly fled Kazakhstan as a fugitive. Ilyas is also accused by Kazakh authorities of money laundering and is a fugitive. Excerpts from the audio are here, and emails penned by Sater in 2007 from Kazakhstan also talk about a coal deal he had just closed-- three days after arriving in Kazakhstan without a visa. Whether the emails are referring specifically to a Khrapnukov deal is unknown.

The Russian-born Sater spent a year in prison in 1993 after pleading guilty to assaulting a man with a broken glass during an argument with in a bar. (The victim required more than 100 facial stitches.) Next, he pled guilty in 1998 to racketeering. Specifically, he helped run a huge pump-and-dump stock fraud with members and associates from four of New York’s five Italian mafia families-- including the brother-in-law of Salvatore “Sammy the Bull” Gravano, the Mafia hitman turned Gotti-informer.

In a press release two years later that cited Sater, New York’s then-police commissioner dubbed the case “Goodfellas meets Boiler Room”-- a reference to both the classic film and to cold-calling operations where salespeople often peddle fraudulent securities. This time around, Sater avoided prison by becoming a government cooperator for more than a decade, ratting out mobsters.

This is the video I wanted to embed... but this one below gets the point, albeit less specifically, across (but do yourself a favor and watch the one at the link too):

He's Obviously Not Mentally Fit-- What Do We Do?

Friday Arnold Schwarzenegger told Empire he won't be signing on for another season of Celebrity Apprentice because the show is drowning in Trump's stench, although he put it more politely. "I learned a lot, I had a great time, it was a really great opportunity. But under the circumstances I don't want to do it again... [The loss of advertisers] is not about the show, because everyone I ran into came up to me and said 'I love the show... but I turned it off because as soon as I read Trump's name I'm outta there!'... When people found out that Trump was still involved as executive producer and was still receiving money from the show, then half the people [started] boycotting it... With Trump being involved in the show people have a bad taste and don't want to participate as a spectator or as a sponsor or in any other way support the show. It's a very divisive period now and I think this show got caught up in all that division."

Early this morning, strung out on Adderall, the psychopath in the White House tweeted "Arnold Schwarzenegger isn't voluntarily leaving the Apprentice, he was fired by his bad (pathetic) ratings, not by me. Sad end to great show."

Trump was up at 5AM tweeting his bizarre attacks on President Obama, but he grabbed a minute to babble his nonsense about Schwarzenegger. People should be wondering why Paul Ryan has bottled up Ted Lieu's legislation requiring that a psychiatrist be available at the White House. After all, Lieu told Amy Goodman last week that "in 1928, Congress passed a law requiring that doctors be at the White House, because Congress concluded that presidents are human beings, and like all human beings, we have our own frailties. Because of how people viewed mental health at the time, there was no psychiatrist or psychologist that was required. In the 21st century, we know that mental health is just as important as physical health, so it seemed to make sense that the White House should also have a psychiatrist or a psychologist available. I am not the first to bring this up. Republican Chairman Jason Chaffetz told the Washington Post earlier this year that he thought the president should have an independent mental health exam. And I also know that in 2015 the National Defense Authorization Act, which was supported by over 300 members of Congress on a bipartisan basis, required incoming military recruits to get a mental health exam. Keep in mind, the president is also the commander-in-chief of our armed forces, and he can launch 4,000 nuclear weapons in a matter of minutes. So that’s what we’re looking at... [T]he demands of the presidency have increased significantly, especially since the advent of nuclear weapons, and the president should have the best treatment available. In terms of this bill, we’re trying to see if this is the best way to go about it. Clearly, to me, when you have a president that lies pathologically, that believes in alternative facts, it suggests to me there is a problem. I don’t know the extent of that problem. I don’t know what the best solution is. But I do think that this issue should be raised. And so I raised the issue. It is a bipartisan issue. And we’re trying to get more information and to see what’s a good next step."

A few days later David Cay Johnson was on Democracy Now too, saying that Trump lies as easily as you and I breathe. He is, by becoming president of the United States, the number one con artist in the history of the world. He has spent his entire adult life deeply in the embrace of violent felons, Russian mobsters, American mobsters, assorted swindlers and crooks. He has cheated his own workers out of their pay. He has cheated small business people out of their fees. He has swindled investors in properties that were branded with the Trump name. And so, it’s absolutely critical to understand that you can’t rely on anything that Donald Trump says as president of the United States, but especially when he knows that he’s got stuff in his closet to hide."

In this morning's NY Times, Maggie Haberman tried getting into what hiding all that stuff-- less and less successfully-- is doing to Trump's psyche.

President Trump was still upbeat Wednesday night, as he settled into dinner in the White House residence with his secretary of state, Rex W. Tillerson, some 24 hours after giving the most consequential speech of his brief presidency.

But not long afterward, the glow from Mr. Trump’s best day in office began to fade with the breaking news that his attorney general, Jeff Sessions, had met with the Russian ambassador during the 2016 campaign. Mr. Sessions failed to mention those conversations in his Senate confirmation hearing, or, according to presidential advisers, to tell Mr. Trump at all.

The story overshadowed Mr. Trump’s visit the next day to the aircraft carrier Gerald R. Ford, a classic presidential opportunity to highlight his role as commander in chief. And by the time he got back to the White House on Thursday night, the president let his frustration show.

In a statement repeating a familiar critique that Democrats were on a “witch hunt” over the administration’s ties with Russia, Mr. Trump offered a passing but pointed public jab at how Mr. Sessions had handled the matter. “He could have stated his response more accurately,” Mr. Trump said.

For Mr. Trump, it was the latest unforeseen obstacle preventing him from gaining traction after a historically bumpy first month in office that has been marked by massive national protests, the dismissal of his national security adviser, and historically low approval ratings.

The president was irritated that Mr. Sessions did not more carefully answer the questions he was asked under oath, according to people who spoke with him. His larger frustration, however, was not with Mr. Sessions, but with whoever revealed the meetings to reporters for the Washington Post.

Mr. Trump, according to his advisers inside and outside of the White House, has felt besieged by what he regards as a mostly hostile bureaucracy, consisting in part of Democrats and people who opposed his election who are now undermining his presidency with leaks. He believes that they are behind the stories about confusion and dysfunction in his administration and, most of all, that they have made his relationship with Russia a recurring issue.

“That is the real story,” said Hope Hicks, a spokeswoman for Mr. Trump, when asked for comment on how the White House views the constant string of stories based on what they have called leaks. Several of those stories have raised questions about ties between the president’s 2016 campaign and Russian officials.

Allies of Mr. Trump say his sense of being surrounded by hostile forces will be relieved once his own appointments fill the thousands of political jobs that have not yet been filled. But people close to Mr. Trump concede that the White House’s sluggish hiring process, in which insufficient work was done to tap people for key deputy roles at major agencies during the transition process, is a large part of the problem.

...Trump is not one to spare the blame when he has hit difficult patches in the past, and his rebuke of Mr. Sessions reflected that. So did his public jab at his press secretary, Sean Spicer, for his attempt to trace leaks from his communications staff members by examining their cellphones. Mr. Trump told Fox News that he personally would have done that type of search “differently.”

But the stories related to Russia are of a different order of magnitude.

During the transition he publicly called out the intelligence community for being behind the leaks and at one point, he compared them to smears conducted by the Nazis in the 1940s. More recently, he has blamed Democrats bitter over the defeat of Hillary Clinton.

But while Mr. Trump puts the blame on leakers for his administration’s rough start, it has not helped that the White House has been distracted by internecine skirmishes, partly dictated by lingering tensions between long-serving advisers and aides to the Republican National Committee, who came to work for the president after he tapped the committee’s chairman, Reince Priebus, as his chief of staff.

In the midst of it, Mr. Trump, who has a famously short attention span, has at times had trouble staying on course. He is pondering a broader response to the Russia issue, people close to him say, but he is so far stymied by opponents he can’t see, but who have clearly knocked him off track.

On Friday, Mr. Trump tried to go back on the offensive with two Twitter messages, one about Chuck Schumer, the Senate minority leader, and the other about Nancy Pelosi, the House minority leader, and their meetings with Vladimir V. Putin, the Russian president, and Sergey I. Kislyak, the Russian ambassador to the United States.

Instead of the intemperate messages that Mr. Trump has often deployed, he had help from the White House social media team in crafting the Twitter posts. But in doing it, he ended the week by breathing more oxygen into the Russia issue.

Such daily skirmishes might satisfy the need to fight back, but Republicans who want him to succeed caution that Mr. Trump’s fate as president will lie in his actual accomplishments.

“If they get some legislative successes, they’ll be fine,” said Representative Tom Cole of Oklahoma, “and if they don’t, that’s when the real trouble begins.”

So what now? Is there any way to get out from under this without triggering a constitutional crisis on the level not seen since the Civil War? Is the Deep State trying to undermine Trump for their own reasons? Can the country muddle through this for 4 years?

More Revelations On The Donald, AKA, The Trumpanzee

-by Helen Klein

A recent article by Kathy Kiely about a new book, The Making of Donald Trump by David Cay Johnston, sheds further light on The Donald, the most emotionally unstable and dangerous man ever to run for President of the United States. Recently much has been said about Trump’s mental health, or lack thereof. This book depicts more of Donald, the person. It reveals who has influenced him and what he has been like over the years... and, predictably, it is not a pretty picture. As if we need more horrifying and disturbing revelations about The Donald: every day the daily headlines share the newest awful statement he has made. Descriptions and examples cited in the book depict an unbelievably cruel, nasty person with a laser-like focus on revenge against anyone who thwarts him. Above all, he is intent on his own success to the detriment of everyone else. He has ruined the lives of many people. His delight in the troubles he causes is despicable.

Johnston, a Pulitzer Prize winning reporter who has been following Trump for decades, describes his new book as, “basically everything Donald Trump wants to make sure you do not know.” He probably has the largest Trump document collection in the world. Johnston has been unhappy about the way the press has been handling Donald and decided to tackle the problem himself.

The Donald’s grandfather was a German immigrant who, “ran a ‘whorehouse.’” His father “was an industrious businessman with some unfortunate views… in 1927, Fred Trump was arrested at a Ku Klux Klan meeting in Queens-- something his son has tried furiously to deny.” During the run up to the Republican convention, Trump’s vague statements about the Ku Klux Klan and David Duke were mistruths (outright lies?), pure and simple.



Years later, Fred Trump was in trouble for “bilking a federal housing program for returning GIs. [He] was ordered by the federal government to stop discriminating against African Americans who were trying to rent apartments he owned.” Donald’s attempt to get the allegations of racial bias thrown out of the courts was unsuccessful. The case was eventually settled. It is important to note that representing Fred Trump in this lawsuit was Roy Cohn, a former aide to Joseph McCarthy, the right wing, disgraced, Communist witch hunter. Johnston sees Trump’s association with Cohn as part of a disturbing pattern-- Cohn “taught Donald how to hurt people.” What a role model!

Johnston expresses alarm about Trump’s associations. “We have never had a major party candidate for president with the kind of relationships Donald Trump has. While some past presidents have had unsavory friends and business associations, “They were not the Mob. They were not drug traffickers.” At a Press Club event, Johnston raised questions about Trump’s ties to Felix Sater, “a Russian-born stock fraudster and admitted fellow traveler with the Mob. Sater is now a defendant in a tax fraud case; papers unsealed earlier this month name Trump and two of his children as ‘material witnesses.’”

“Vindictiveness is a point of pride for Trump,” said Johnston. “His personal motto is ‘get revenge.’” The extent of his vindictiveness is YUGE and a nightmare for those who have experienced it. It is hard to contemplate such a vicious human being, let alone one who won his party’s nomination.

Two examples noted in the article show his cruelty and complete lack of compassion as well as his glee at others’ distress by his own hand.

When his nephew and his wife challenged Fred Trump’s will, which had cut them out, Trump purposely removed their ailing child from the family’s medical insurance policy. When asked by a reporter why he did this, Trump said, “I can’t help that.” A court later restored it.

When a female employee refused to call a banker friend on his behalf, Trump fired her. “She ended up losing her home. Her husband, who was only in it for the money, walked out on her and I was glad… I can’t stomach disloyalty… and now I go out of my way to make her life miserable.”

Johnston is an expert on tax law and lectures on this at Syracuse University. There are many reasons for Donald’s reluctance to release his tax returns. Based on some leaked documents, “In all likelihood, Donald has paid no federal income taxes for years” and he has benefitted from gaping tax loopholes for real estate developers. His lack of charitable giving to his own family foundation is notable. While certainly rich, he is reluctant to reveal his true net worth, which is likely much less that he intimates. “Trump’s chief talent lies in ‘making deals to bring in money that supports a lifestyle’ fit for a billionaire. How many billionaires, who you really know are billionaires, do you see out hawking ties, steaks, bottled water and board games?”

Besides being a self-absorbed, narcissistic, emotionally unstable, ignorant person who is totally unequipped for the role as President of the United States, Trump is an awful human being. His history of cruelty, vindictiveness and revenge makes sense in light of his current behavior and unbelievably horrifying statements that are increasingly alienating many Americans. He is being true to form. He has always been this way. What you see is what you get.

Let’s hope he is crushed in the November election. Let’s show him he is a big loser, instead of a big winner.