A $250 million case regarding civil tax fraud was dismissed by a Manhattan court regarding Felix Sater, the Russian-American businessman. Felix Sater is a previous associate of Donald Trump, and he co-founded a real-estate company called Bayrock. The prosecution of the case was classified as qui tam, allowing a whistleblower to file a case. The filing is on behalf of the state, and the Attorney General’s office has an intervention option. The alleged whistleblower was an attorney named Fred Oberlander, who was once the representation for Jody Kriss, a former business partner of Felix Sater concerning a money-laundering suit against the real-estate company.
On Wednesday, Oberlander acknowledged his qui tam complaint had been filed based on information previously stricken by federal judges from the original complaint of Kriss. According to the attorney, the argument was not successful for Oberlander due to the information previously ordered removed by the federal judges. The compliant was most likely to be dismissed. The dismissal of the complaint has been confirmed by Sater and his attorney.
The office of Attorney General Eric Schneiderman declined their right to intervene in the case the previous year. A letter was sent by the Attorney General in February of 2016 to notify the New York Supreme Court of a press release of Oberlander that was misleading. Oberlander claimed Eric Schneiderman had approved of the case when the state had already made the decision not to intervene. To protect the interest and rights of the state, the case will be monitored by the Attorney General’s office.
Sater’s attorney Wolf, stated the dismissal of the case was based on merits, not procedural grounds. He noted that Richard Lerner, another attorney involved in the case and Oberlander were referred to twice as the DOJ for criminal contempt. This was based on the misconduct regarding Sater during the proceedings. According to a reporter Lerner is planning to appeal the decision regarding the qui tam case.
The initial lawsuit was brought in 2010 was against Sater, the real-estate company, and Jody Kriss, the former director. The case alleged during the existence of the real-estate company, it was mostly covertly operated and owned by the mob. The company was accused of engaging and operating in a pattern of continual and related crimes. This included embezzlement, extortion, bribery, conspiracy, money laundering, tax evasion, and bank, wire, and mail fraud.
Bayrock’s founder, TevfikArif and Sater were accused by Kriss of using fraud, racketeering, money laundering, and misconduct to cheat him from millions of dollars. A New York judge ruled in December that the lawsuit could progress as a racketeering case. The complaint filed by TevfikArif, Felix Sater and Jody Kriss stated negotiations began in 2003 with the Trump Organization regarding marketing specific projects using the Trump brand, but Sater’s criminal past was not revealed to Trump.
Trump gave a disposition in 2007, and stated his organization would not have agreed to a partnership with Bayrock if he had been aware of Sater’s criminal past. Trump additionally stated he would be unable to identify Sater even if they were within the same room. The office for the real-estate company was previously two floors under Trumps office on Fifth Avenue in Trump Towers. According to an individual who requested anonymity due to fear of retribution, there were meetings between Trump and Sater every week.
Sater gave a deposition stating he had meetings with Trump on a regular basis, and Kriss said Trump placed value of both the loyalty of Sater, and his Russian connections. Trump stated his investing in Russia was ridiculous in a deposition in 2007. He also said one of the world’s hottest places for investments is Russia.