Donald Trump’s involvement in Bayrock Group’s development of the Trump Soho hotel and condo building ties him to Russian-born developer Felix Sater – a former Bayrock executive who was convicted for his role in a $40 million mafia-linked stock fraud scheme, according to a Daily Telegraph investigation.
Earlier this week, the London-based newspaper reported that the presumptive GOP presidential nominee signed off on a $50 million investment in Trump Soho, and other projects bearing the Trump name, from Iceland-based FL Group that was later reclassified as a loan.
The transaction raises questions over whether the conversion of the equity investment into a loan was meant to help Bayrock and its partners dodge tens of million of dollars in taxes on gains and future profits from the properties.
But the Telegraph is also reporting that Trump’s signing off on the deal also ties him to Sater, identified as one of the individuals in “control” of Bayrock. Sater joined Bayrock around 2002 and was likely “number two” at the company, according to a 2010 deposition.
The Trump camp has previously distanced itself from Sater, with Trump general counsel Alan Garten telling ABC News last year that the Moscow-born businessman had “very little involvement” in projects bearing the Trump name.
“We did do due diligence and we did do background checks on the owners of [Bayrock]. He was not an owner of the company,” Garten told the Telegraph.
But the two men appear to be familiar, despite Trump claiming in 2013 deposition that “if [Sater] were sitting in the room right now, I really wouldn’t know what he looked like.” Trump and Sater even shared a stage at a 2007 party to celebrate the Trump Soho’s launch.
While Garten says that Trump first learned of Sater’s shady past dealings in December 2007, Trump later hired him as a “senior adviser” in 2010 and he was even given a Trump Organization business card. Garten says Trump wanted to give Sater an “opportunity” and used him to “source business deals.”
The controversies over FL Group’s investment in Bayrock and Trump’s relationship with Sater are far from the only issues tied the Trump Soho and its developers.
Trump, Bayrock and fellow partner the Sapir Organization were hit with a lawsuit in 2010 for lying about how many units they sold at the condo and hotel tower at 246 Spring Street – a matter that was also subject to a separate criminal investigation by the Manhattan District Attorney’s Office.
Bayrock is also tied to the dealings of convicted developer and former NBA player Tate George. In addition, a former consultant sued the company in 2014, claiming Bayrock used “mob tactics” to cut him out of a commission. [Daily Telegraph] – Rey Mashayekhi