A civil RICO (Racketeer-Influenced and Corrupt Organization) lawsuit exposing Donald Trump’s associates’ criminal business practices was filed in the U.S. Court in the Southern District of Manhattan on June 20, 2016. The suit was filed by two principals of Bayrock Group, LLC, which developed the Trump SoHo condominium-hotel complex in Manhattan.
The Kushner Companies, then run by Trump’s son-in-law and current senior White House adviser Jared Kushner, developed property adjacent to the Trump SoHo complex. Alex Sapir of the Sapir Organization is linked to the development of both the Trump and Kushner properties in SoHo. However, Sapir was not named as a defendant in the suit against Bayrock.
Among those named in the civil RICO suit against Bayrock were three of Trump’s close Bayrock business associates, Felix Satter (aka Felix Sater and Felix Sheferovsky), the managing director of Bayrock LLC; Julius Schwarz; and Tefvik Arif, Bayrock’s principal owner and associate of the infamous mafia syndicate, the “Kazakhstan Trio,” comprised of Alexander Mashkevich, Patokh Chodiev, and Alisan Ibragimov. Bayrock also developed the Trump International Hotel and Residence in Phoenix, Arizona. Sater now serves as an unofficial adviser to Trump and is a close associate of Trump’s personal attorney, Michael Cohen.
The suit provides brief biographical sketches of the defendants:
- “Tevfik Arif is a natural person residing in New York. Arif, a native Russian, started Bayrock as a party apparatchik in Moscow in 1989 at the fall of communism, backed by oligarchs and money they stole from the Russian people. He came to the United States in 2000 to establish a presence for Bayrock, forming Bayrock Group LLC in 2002. Until Satter joined, Arif had sole, if nominal, direct or indirect ownership and control of Bayrock Group LLC. He has always been a member and has always participated in its operation with the title ‘Chairman.’”
- “Felix Satter (“Satter”) aka Felix Sater, is a natural person residing in New York, a native Russian who emigrated to the United States in the 1970s. He joined Bayrock in 2002 with an organized crime history. By 2003, Arif had given him majority ownership in, and shared control of, Bayrock. He is been a member of all five Subs [subsidiaries] and of Bayrock Group LLC and has always participated in its operation, with the title ‘Chief Operating Officer’ or ‘Managing Director.’”
- Julius Schwarz (“Schwarz”) is a natural person residing in New Jersey. Bayrock hired him as Executive V.P. and General Counsel in early 2005, and since November 2005 he has been a member of all five Subs and of Bayrock Group LLC, and has always participated in its operation, with dual roles as an attorney and an executive managing its normal operations; he considers himself de facto CEO.”
According to federal court filings, Bayrock has developed, owned, or operated $5,000,000,000 of projects globally.”
The suit against Bayrock states, “Arif, Satter, and Schwarz are not only organized businessmen, they are organized criminals, operating Bayrock through acts of racketeering.” The suit also states, “Satter is an organized criminal and racketeer by career choice, with a history of felonies including convictions for violating federal racketeering law and for assault with a deadly weapon.”
The lawsuit provides quite a criminal biography of Trump’s business associates. It states, “Arif made Satter Bayrock’s covert majority owner and co-control person even while Satter was awaiting sentencing on a prior federal racketeering conviction.”
In a testament to the criminal connections of President Trump, the lawsuit states, “Concrete example of their [Bayrock] crime, Trump SoHo, stands 454 feet tall at Spring and Varick, where it also stands monument to spectacularly corrupt money-laundering and tax evasion . . . Arif, Satter, Scwharz arranged for up to $250,000,000 of Bayrock’s profit as the co-developer of Trump SoHo to be laundered, untaxed, through a sham Delaware entity to Iceland (and reportedly then Russia), intending to evade up to $100,000,000 of U.S. taxation.”
This aforementioned excerpt may shine a light on what Trump could be hiding in his annual tax returns and why they are being audited by the Internal Revenue Service in the first place. After all, it was not murder or racketeering that sent Al Capone to federal prison, but income tax evasion.
The suit also alleges: “Despite the promises of tax revenues Trump SoHo would bring the city, nearly half its profits were years ago fixed to evade taxes. Ten cents of every dollar of condominium sales was set to be siphoned, untaxed, out of the country through this Delaware tax laundromat, testament to corrupt professionals who put obeisance to a racketeering client before ethics, honor, and the law.”
Also named in the suit are five Bayrock contrivances and artifices claimed by the plaintiffs to act as “passive holding companies” designed to distribute Bayrock LLC money to lower tiers of a pyramid operation involving Trump properties. The five Bayrock subsidiaries are: Bayrock Spring Street LLC, Bayrock Camelback LLC (the holding company for Bayrock insider interests within the Trump Camelback hotel condominium project in Phoenix), Bayrock Merrimac LLC (a Florida-registered holding company for Bayrock insider interests within the Trump International hotel condominium project in Fort Lauderdale), Bayrock Whitestone LLC (a holding company for Bayrock insider interests within the Waterpointe mixed use project in New York City), and Bayrock Ocean Club LLC (a holding company for Bayrock insider interests within the Trump Ocean Club hotel condominium project in Fort Lauderdale).
The RICO case against Bayrock and its affiliates has been active for seven years. Details of the case, including the involvement of Trump properties in New York, Florida, and Arizona in racketeering and tax evasion can be found in the 165-page lawsuit.
Previously published in the Wayne Madsen Report.
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Wayne Madsen is a Washington, DC-based investigative journalist and nationally-distributed columnist. He is the editor and publisher of the Wayne Madsen Report (subscription required).
