A court in Manhattan has dismissed a case for civil tax fraud for $250 million. The case was against Felix Sater, a Russian-American businessman. Sater was previously one of Donald Trumps associates, and he additionally co-founded a real estate business called Bayrock. The case was considered qui tam by the prosecution, allowing a whistleblower to file on behalf of the state. The office of the attorney general can decide if they want to interfere.
Fred Oberlander was the cases purported whistleblower. The lawyer once represented Jody Kriss, a former business partner of Sater’s. This was regarding a suit for money laundering against the real estate company. On Wednesday, it was acknowledged by Oberlander his qui tam complaint used information the federal judges had already stricken from the original complain by Kriss.
According to the attorney, Oberlander’s argument did not go well. Due to the use of information previously ordered removed by federal judges, the dismissal of the complaint was likely. The dismissal of the case has been confirmed by both Sater and his attorney Robert Wolf.
The office of Eric Schneiderman, the attorney general, declined their right to intervention in the case last year. In February of 2016, The New York Supreme Court was sent a letter citing Oberlander’s misleading press release claiming the case had been green-lighted by Schneiderman. According to Schneiderman, the state had already said they would not intervene. The attorney general’s office plans to continue monitoring the case so the rights of the state and their interests are protected.
According to Sater’s attorney Wolf, the case was not dismissed due to procedural grounds but rather the merits. He stated Oberlander and another attorney Richard Lerner, have both been involved with Sater’s case. Lerner has been referred twice to the DOJ for misconduct in Sater’s proceedings and criminal contempt. According to Lerner, he will appeal the qui tam cases decision.
The lawsuit was brought against Tevfik Arif Bayrock and Sater in 2010 by Jody Kriss, the former director of finance. Kris was not a part of the case brought by Oberlander later. It was alleged the company had been covertly operated and owned by the mob for the bulk of its existence. The company additionally allegedly participated in continuous crimes including bank, mail and wire fraud, money laundering, tax evasion, extortion, bribery, conspiracy and embezzlement.
Tevfik Arif, the founder of the real estate company was accused by Sater and Kriss of cheating them out of millions with the use of racketeering, money laundering and misconduct. The ruling of a judge in New York in December was the case could continue with the racketeering charges.
According to the complaint Kriss filed, Arif and Sater started negotiations in 2003 with the Trump Organization. The idea was the marketing of specific projects under Trump’s brand, but Sater’s criminal past was never revealed to Trump.
Trump gave a deposition in 2007 stating if he had been aware of Sater’s past he would not have agreed to the partnership and development deal. He additionally stated if he was in the same room with Sater he would be unable to identify him. The real estate company was previously two floors beneath Trump’s office on Fifth Avenue in Trump Tower. According to an insider, there were weekly meetings between Trump and Sater.
Sater gave a deposition stating he had consistent meetings with Trump. Kriss additionally said Trump valued the loyalty he received from both Sater and the connections he has in Russia. According to Trump’s deposition in 2007, the idea of his investing in Russia is ridiculous. Russia is currently one of the world’s hottest places to invest.