A $250 million dollar civil-tax fraud case formed against Russian-American businessman, and former managing director of Bayrock LLC, Felix Sater has been tossed out by the judge. Sater, who has been under investigation before and himself has a criminal record, is currently an informant for the FBI. At present he is assisting them in the investigation of international money-laundering schemes. The civil-tax case was a qui tam case stemming from an earlier money-laundering case brought against Sater and Bayrock founder Tevfik Arif.
The money-laundering case was brought against Sater and Tevfik Arif Doyen years earlier. Lawyer Fred Oberlander, who represented the plaintiff Jody Kriss, is the principle of the qui tam case. It is labeled a qui tam case, because the Oberlander is a whistleblower.
Jody Kriss, a former business partner of Sater’s and fellow executive of Bayrock, filed the money-laundering suit in 2010. The current qui tam case bolsters from undisclosed information brought before the court that had been stricken from the record. Oberlander alleged that the information proved Arif, Sater, and others had been implementing tax frauds for years, and had also been covering them up.
Wednesday, September 27, 2017, the judge overseeing the qui tam case held that the information disclosed was deemed confidential and that the mandate would stand. Sater and his lawyer, Robert Wolf, confirmed the case’s dismissal in statements made following the decision.
As any qui tam case is open for the Attorney General to intervene, eyes looked towards Eric Schneiderman’s office. Schneiderman declined to intervene in the case, opting to send a letter in regard to a misleading press release by Oberlander. Oberlander said that Schneiderman had supported the case, and Schneiderman wanted New York Courts to know that was not true. The letter expressed that the Attorney General had denied the opportunity to intervene. According to Robert Wolf the case was released based on merits.
The initial case brought on by Kriss accused the international real estate firm of being run by the mob. It stated that the firm engaged in a wide pattern of crimes relating to embezzlement, mail fraud, tax evasion, wire fraud, money laundering, bank fraud, and racketeering. Kriss himself claimed that Arif had cheated out of millions owed to him. This was later used by the opposition to paint Kriss a disgruntled employee. Despite the wide level of allegations the New York Judge presiding on the case labelled it as a racketeering charge. The case brought in many high level players, including Donald Trump as his company had been dealing with the firm at the time.
Trump and Arif worked on the Trump SOHO project together. One of Kriss’ accusations was that Sater’s prior criminal record had not been revealed to either himself or the Trump organization. In his own deposition the mogul-turned-President declared that he had not know of Sater’s criminal rap sheet. If he had his organization would not have done business with the firm.
Sater’s criminal past dates back to 1998. He pleaded guilty to involvement with the Russian Mafia in a $40 million stock fraud. This case led to his use as an informant for the FBI, a position he still facilitates. Sater is insistent that his criminal past was fully disclosed to Kriss and the Trump organization. He even claimed that he met with the future president weekly. According to Trump in his deposition he would not be able to identify Sater in a room. Kriss’ money-laundering case reached a final solution with a closed-door agreement. It is undisclosed what Kriss’ settlement pertained to but it took a while to finalize.