Recently, a court based in Manhattan dismissed a civil tax fraud case that was valued at $250 million against Felix Sater and Bayrock. The attorney general’s office was to decide whether to intervene in the case or not, since it was a qui tam case. These types of cases normally allow whistleblowers to file them on behalf of the state. Fred Oberlander, a practicing lawyer, is the purported whistleblower. He once represented Jody Kriss, Felix’s former business partner, in a case against the company for money-laundering.
Felix Sater was once a business associate to President Donald Trump and Bayrock Group LLC managing director. He was responsible for advising The Trump Organization and Donald Trump during the construction of the Trump SoHo project in 2006.
Fred Oberlander had agreed to file the qui tam complaint after information from Jody’s earlier case had been stricken off by federal judges. The case against Sater did not go well for Oberlander. This was because the judges had previously ordered for the removal of the information on confidentiality grounds.
The Attorney General, Eric Schneiderman, had refused to intervene the case back in 2016. He then sent a letter to the New York’s Supreme Court citing the misleading press release that Oberlander had issued. Oberlander had stated that he received a green-light regarding the case, which in the real sense the State had declined. Eric mentioned that his office would now take lead in monitoring the case to ensure the interest of the State is maintained.
Robert Wolf, a lawyer to Felix Sater, confirmed the dismissal of the case. He mentioned that it is purely on merit that the case was dismissed. Wolf added it was worth mentioning that Oberlander and Richard Lerner, a lawyer who was also involved in the case, had been referred to the Department of Justice, DOJ on two occasions for criminal contempt against Sater’s proceedings. Lerner continues to insist on the case by saying how he plans to appeal regarding the decision by the court to dismiss the case.
The initial lawsuit of 2010 by Jody Kriss, the company’s former finance director, stated that the company was engaged in various unscrupulous dealings. The company was alleged to be covertly mob-owned. Its operations included continuous engagement in money laundering, bribery, extortion, tax evasion, and embezzlement of funds.
Bayrock’s founder Tevfik Arif and Sater were accused by Kriss for financial deceit which amounted to millions of dollars. Arif and Sater were said to have taken part in fraudulent dealing, money laundering schemes, and racketeering. A New York judge, however, mentioned that the lawsuit could proceed as a racketeering case. Kriss’ complaint was based om Sater and Arif negotiating for the marketing projects in 2003 with the Trump Organization. At that time, Trump was unaware of Sater’s criminal past. In 2007, Trump even stated that had he known of this, he wouldn’t have partnered with the company in developing Trump SoHo. The company’s offices used to be housed in Trump Tower.
President Donald Trump claims that he cannot be able to identify Sater even if they were in the same room together. It begs to question Trump’s denial in knowing Sater, given that sources mention how they both held meetings frequently. An anonymous source who attested to Trump and Sater’s regular meetings understands Sater’s nature. This makes him afraid of retribution from Sater or any of his associates, thus the anonymity. It is said that Trump valued Sater’s loyalty and Russian connections. Trump is even on record in 2007 saying that, he would not mind investing in Russia. He termed the country as one of the best places to invest in the world.