Forbes: Felix Sater Mob-Connected Hustler; Connections to the President of the US
Photo credit: Finlay Mackay/Trunk Archive
Felix Sater is not a name that has come up much during the presidential campaign. That he has a colorful past is an understatement: The Russian-born Sater served a year in prison for stabbing a man in the face with a margarita glass during a bar fight, pleaded guilty to racketeering as part of a mafia-driven "pump-and-dump" stock fraud and then escaped jail time by becoming a highly valued government informant.
He was also an important figure at Bayrock, a development company and key Trump real estate partner during the 2000s, notably with the Trump SoHo hotel-condominium in New York City, and has said under oath that he represented Trump in Russia and subsequently billed himself as a senior Trump advisor, with an office in Trump Tower.
Usually such an association would ignite a political firestorm. From the Clintons' Whitewater deals to Richard Nixon's relationship with Florida banker and developer Bebe Rebozo, all the way back to 19th-century industrialist Mark Hanna's influence over William McKinley, presidential candidates have long suffered by dint of association.
Sater has been profiled in the Washington Post, on ABC News and in several other outlets. But few have taken much note of him, presumably because Trump has said, under oath, that he barely knew him. "If he were sitting in the room right now, I really wouldn't know what he looked like," he said in a deposition in November 2013. Asked how many times he had ever conversed with Sater, he said, "Not many." And asked about a previous BBC interview, in which he was questioned about Sater's mafia connections, Trump said he didn't recall the interview.
Also on Forbes:
This past December Trump went further: "Felix Sater, boy, I have to even think about it," Trump told AP, referring questions about Sater to his staff. "I'm not that familiar with him."
End of story? Not quite. Looking into Trump's deals, FORBES has uncovered numerous e-mails and sworn statements that indicate Sater was closer to Trump, his organization and his children than previously revealed. Additionally, FORBES has connected three billionaire oligarchs from Kazakhstan to potential deals involving Trump and Sater.
Why does this matter? The story of Sater and the one involving billionaires quietly backing the Trump-Bayrock deals speaks to a key virtue of any good businessman--due diligence--that seems especially relevant for a candidate running on private-sector acumen and the need to do "extreme vetting" of those seeking to get into the country.
It wouldn't have taken much vetting to get the scoop on Sater. FORBES retained a highly regarded global-risk-assessment firm to conduct a background check, using only what was available to it in 2007--the year the Trump-Bayrock relationship was promoted. The investigative firm (it asked not to be named for fear of political repercussions) discovered many facts that we're revealing here and others that have come out before, including felony convictions and organized crime ties. Such due diligence on Sater could have been done for $5,000.
TRUMP AND SATER
Photo: Getty Images, Peter Burka (Flickr). Design: Holly Warfield
2002 Felix Sater has testified that he joined Bayrock, controlled by Tevfik Arif, around 2002. Bayrock was based in Trump Tower. In a sworn deposition in 2008, Sater testified that he would pitch business ideas to Trump ("just me and him") and his team ("on a constant basis").
2005 FORBES has obtained a letter to Sater, listed as Bayrock's "managing director," from Donald Trump Jr., which states that his father would be a partner in a proposed hotel-tower in Fort Lauderdale, Fla. The letter is cc'd to the Trump Organization's VP of development.
2005 Donald Trump gave Sater and Bayrock an exclusive deal to develop a project in Russia, according to Sater's 2008 deposition. "I'd come back, pop my head into Mr. Trump's office and tell him, you know, 'Moving forward on the Moscow deal.' And he would say 'All right.'"
"I showed him photos, I showed him the site, showed him the view from the site. It's pretty spectacular."
Photo by Amy Sussman/Getty Images For The Miami Group, Shutterstock. Design: Nick DeSantis, Forbes staff
2006 Donald Trump Jr. and sister Ivanka travel to Moscow. Sater claims Donald Sr. asked him to show them around the city. "He asked if I wouldn't mind joining them and looking after them while they were in Moscow." Trump Organization general counsel Alan Garten tells FORBES it was a coincidence that all were there at the same time.
2007 In a lawsuit, the manager of a proposed Trump hotel-condo tower in Phoenix alleges that Sater threatened to have a cousin shock his testicles, cut off his legs and leave him "dead in the trunk of his car" if the manager "disclosed to any party any of [Sater's] suspected improprieties and past criminal conduct." Sater strongly denies the allegation; the case was settled.
Photo: Shutterstock. Design: Holly Warfield, Forbes staff
FORBES has also obtained a May 2007 letter from Bayrock's executive vice president, Julius Schwarz, to Bayrock's chairman saying "there were at least a hundred times when the deal [$50 million equity for Trump projects from a company in Iceland] could not have closed, among them because of the risk of discovering Felix's past." Schwarz tells FORBES that the letter is legitimate, but while he e-mailed it to his wife for her opinion, it was "never sent" to the chairman.
In a June 2007 e-mail chain obtained by FORBES involving Trump executives (including Donald Jr. and Ivanka), Bayrock executives (including Sater) and execs at Sapir Organization--a key Trump development partner owned by then-billionaire Tamir Sapir--Sater says he's dealing directly with Donald Trump and his family in a dispute: "Donald Jr. and sr [sic] are calling me to talk about us eating it. I called Ivanka and told her I was pissed about Donald throwing me under the bus to Sapir. So now the billionairs [sic] can work it out." Trump's counsel characterized the exchange as unnewsworthy.
In August 2007 The Trump SoHo hotel-condo project files an offering plan with New York State--it names Donald Trump and his children Don Jr. and Ivanka--to sell apartments in the building. It states that there have been "no prior felony convictions of Sponsor [the Bayrock/Sapir Organization], or any principals of Sponsor." FORBES has obtained e-mails that indicate that Sater was in fact an owner/principal in Bayrock. Sater and Bayrock deny it.
Dec. 19, 2007 Two days after a New York Times NYT -1.28% story on Sater's background, Trump was deposed in a lawsuit. Asked if he was aware that one of the principals of Bayrock had previously been convicted of both assault and securities-fraud violations, Trump responded: "Well, they represented to me that he [Sater] was not a principal--[that] he's an employee. " In a later deposition Trump stated, "I don't know who owns Bayrock."
Asked how much he interacted with Sater, Trump responded: "Not that much ... very little ... I dealt mostly with Tevfik [Arif] ... and very little with Sater." Asked if he was severing ties with Bayrock in light of learning about Sater's criminal background, Trump said: "I'm looking into it, because I'm not happy with the story. ... He changed the spelling in his name, so people trying to find things out about him were unable to."
The latter statement is questionable. In an internal Bayrock e-mail obtained by FORBES and dated almost three weeks before the Times story was published, an investigator retained by a Bayrock law firm revealed that Sater's past was easy to learn because he had simply added a second "t" in his surname ("Satter") while working at the company.
Photo: Will Ragozzino/Patrick McMullan via Getty Images. Design: Nick DeSantis, Forbes staff
January 2008 So was Sater a partner at Bayrock (and thus a partner with Trump)? A January 2008 e-mail from Sater obtained by FORBES indicates so. Sater wrote to two executives representing Bayrock investors in Iceland. In the e-mail, Sater says Bayrock's lawyer had informed one of its lenders that Sater was a "principal" in Bayrock. Sater, concerned that revelation could trigger a default, writes in the e-mail that Bayrock's general counsel's "head is not on straight," as just a day before his disclosure he was verbally "abused" by Trump in a meeting. Sater added that Bayrock chairman Arif is "thoroughly freaked out" by the lawyer's slip--and wants out of the company. Sater then lays out a detailed plan to create a family trust that gives him an option to buy 30% of Bayrock when the smoke clears a few years later. "By then no one will care," he wrote. In a conversation with FORBES, Sater says he doesn't recall the e-mail or its contents: "I don't remember anything like that."
2008 According to the Washington Post, Sater's message to potential investors was simple: "Anybody can come in and build a tower. I can build a Trump Tower, because of my relationship with Trump."
2009 A former Bayrock financial analyst filed a lawsuit against Bayrock in which he claimed he had been stiffed out of a partnership interest.
Alleged the analyst: "Felix Sater was Bayrock. They paid his personal expenses, they paid his living expenses. They bought him a house. ... Felix always held himself out as owning half the company ... held himself out to everyone. And he said it to me." Sater denies this. The former employee also stated that Sater physically threatened him twice ("If you don't write this e-mail, I'll kill everyone you love," he says Sater once told him. Sater denies this.)
Photo: Shutterstock. Design: Nick DeSantis, Forbes staff
2010 For about a year Sater became a "Senior Advisor to Donald Trump" and was given a Trump Organization e-mail address, business cards and an office there. The phone number listed on his business card previously belonged to a lawyer in Trump's general counsel's office.
Summer 2016 Felix Sater contributed the maximum allowed ($5,400) to Donald Trump's campaign. A campaign spokesperson said at the time that they were unaware of Sater's donations.
Photo: Getty Images, Shutterstock. Design: Holly Warfield, Forbes staff
July 2016 A year-old private lawsuit against Bayrock, Sater and others, filed on behalf of the state of New York, is unsealed by a New York court. It alleges that the group sought to launder as much as $250 million of profits on Trump projects out of the country to evade taxation and hide its true foreign owners. The attorneys behind the suit, Frederick Oberlander and Richard Lerner, now tell FORBES that new information leads them to believe that Trump misrepresented his knowledge and involvement, and was a participant in the schemes. FORBES has not found any evidence of government action on the case, and Trump's attorney says the case is "completely frivolous" and believes it will be dismissed. Sater's lawyer terms the suit "false and defamatory."
Photo: Mark Von Holden/WireImage. Design: Nick DeSantis,Forbes staff
[UPDATED] September 2016 FORBES uncovered over 100 Internet domain names that, according to a computer security expert retained by the magazine, lead back to Sater. Some seem to be for Sater himself (Felix-Sater.com). And one touches on Trump (DealsByTrump.com), although Sater’s lawyer denies any connection.
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Richard Behar is the Contributing Editor of Investigations for Forbes magazine; the Editor of Mideast Dig; and is at work on a book about Bernard Madoff — to be published by Simon & Schuster. He can be reached at rbehar@forbes.com
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