Bayrock Fraud Case Thrown Out

The $250 million civil tax fraud case against Felix Sater, a Russian American businessman was dismissed by a Manhattan court on Wednesday. President Donald Trump’s former associate Sater and the real estate company Bayrock he cofounded with Tevfik Arif Doyen were being prosecuted qui tam case. This means that a whistleblower can file on behalf of the state. It is then the choice of the attorney general’s office whether or not to proceed.

Fred Oberlander, the lawyer who once represented Jody Kriss a former business partner of Sater’s in a suit against the company involving money laundering was the whistleblower. The qui tam complaint was based on information federal judges had stricken from the original complaint filed by Kriss. This argument did not help Oberlander and it was believed that a judge would dismiss the complaint because it had been previously deemed as confidential information.

Sater and his council Robert Wolf confirmed the case’s dismissal. Last year Attorney General Eric Schneiderman’s office refused to intervene and during February of 2016 sent a letter to notify the supreme court of New York that Oberlander has issued a misleading press release that claimed the case had been green lighted by the attorney general when in fact they had declined to intervene. The office stated that in order to protect the interest and rights of the state they would continue monitoring the case.

According to Sater’s lawyer the case was not dismissed on procedural grounds but on merits noting that Oberlander and Richard Lerner, both lawyers in the case had been referred to DOJ for misconduct resulting in criminal contempt in the former proceedings. Lerner intends to appeal the qui tam case being tossed out. Jody Kriss did not have anything to do with the qui tam case Oberlander brought, however the initial case against Bayrock and Sater in 2010 claimed that the mob had control over the company for the majority of the time the company had been in existence. The suit alleged that the company was actively engaged in various types of fraud, bribery, conspiracy, money laundering, embezzlement and extortion. Tevfik Arif, founder of Bayrock was accused along with Sater of cheating Kriss out of millions through misconduct including but not limited to racketeering, money laundering and fraud. The lawsuit was ruled as being able to move forward as a case for racketeering by a New York judge in December.

It is alleged in the complaint that during 2003 Tevfik Arif and Sater started negotiations to have the Trump Organization market projects under its brand without telling Trump about the criminal past Sater had. Trump released a deposition in 2007 stating that his organization would not have agreed to the partnership with the corporation for Trump SoHo’s development if Sater’s past had been known. He also stated he would not be able to make an identification of Sater even in the same room.

The offices for the corporation were once in Trump Tower two floors below Donald Trump’s office. An anonymous source claims that there were standing weekly meetings between Trump and Sater. Sater’s deposition stated the two met regularly, Kriss has stated that both the Russia connections and loyalty of Sater were valued by Trump. In 2007 Trump’s deposition referred to Russia as a hotspot for investment and said the fact he will not be investing was ridiculous.