Larry has written from his refuge to ask to have this posted. PL
Is Donald Trump guilty of money laundering? If you ask most Democrats and anti-Trump Republicans, they fervently believe that he has been moving money for Russian mobsters for more than twenty years and that an investigation of this will bring Trump’s Presidency to an end. Don’t count on it. Although there is clear evidence of Trump’s past relationship with Russian/American mobsters, knowing someone or collaborating on a business deal is not proof of money laundering. I have spent three decades investigating money laundering cases (I helped develop the civil money laundering case against Philip Morris—click here) and it is clear to me that those who are earnestly accusing Trump of such a crime do not understand what constitutes money laundering.
Apart from not understanding how to make a money laundering case, the anti-Trumpers have failed to grasp another key element to the narrative that Trump was a puppet to the Russians—one of his longtime Russian business associates, Felix Sater, was an FBI informant during the entire time that Robert Mueller was FBI Director. Since Sater was a fully signed up FBI informant or asset, he was in a unique and powerful position to implicate Trump. But none of the “evidence” uncovered or planted by Sater ever produced an indictment of Donald Trump. With the benefit of hindsight it appears that the FBI, relying on Sater, used Trump and his organization as bait to go after Russian mobsters.
The Democrat case for Trump’s money laundering is laid out in a complaint the Democratic National Committee filed in April 2018 against the Russians, Julian Assange and Trump:
"Beginning in 2003, Trump engaged in multiple real estate deals with the Bayrock Group, a firm founded and run by Soviet emigres, who reportedly had close ties to the Russian government and Russian organized crime. In 2004, Trump negotiated with the Deputy Mayor of Moscow over a potential real estate development. In the mid-2000s, Trump partnered with wealthy Russian-Canadian businessmen to develop real estate in Toronto. And in 2006, Trump contracted with the Russian Standard Corporation, a Moscow-based entity that owns and operates the Miss Russia beauty pageant, to allow the winner of the pageant to compete in Trump's Miss Universe pageant, an action that had not been taken since at least 2002. In 2008, Trump sold a Palm Beach, Florida mansion to a Russian oligarch for a $54 million profit. In 2013, Trump established a business relationship with Russian oligarch Aras Agalarov, a close ally of Putin, to bring the Miss Universe pageant to Russia and work on plans to develop a Trump-branded project in Moscow. . . ."
As Trump, Jr. explained, the Trump Organization "s[aw] a lot of money pouring in from Russia," and "Russians make up a pretty disproportionate cross-section of our assets." And Trump's son Eric Trump has reportedly stated that substantial funding for Trump's golf courses comes from Russian investors.
I do not know who was advising the DNC on this complaint, but it is clear that the drafter or drafters do not have a clue about money laundering. Money laundering is very easy to define:
The act of disguising the source or true nature of money obtained through illegal means.
The key element is the phrase, “illegal means.” If you are going to be charged as a participant or accesory in a money laundering case, you must be handling or receiving money that came from a criminal activity, such as trafficking in drugs, arms or people. So here’s the critical question with respect to Donald Trump and money laundering—what was the predicate crime?
In the world of real estate, the money laundering component is always in the financing. That is, you want to trade the bad money for good bank money by using the property as the chattel to do it. But when this is done as part of a money laundering scheme, it almost always involves the financing of major building projects. Someone with dirty money is not going to waste time purchasing individual condos or homes as their primary means of cleaning the money. When the dirty money comes from activities like drug trafficking, the amount of cash generated is enormous. You need big money projects to launder large quantities of cash.
Given Donald Trump’s extensive and controversial real estate ventures over the last thirty years, which have involved several Russians, it is understandable why those opposed to Trump seize on these transactions as evidence of “money laundering.” Unfortunately, the journalists who have tried to make the case that Donald Trump was “laundering” money for the Russian mob, have failed to provide actual evidence of such activity. Instead, they have relied on innuendo and guilt by association.
Yes, it is true that Russians with ties to organized crime purchased condos in Trump Towers in New York City. But there is no evidence that the sales of these condos were an organized, structured transaction. Individual Russians, acting in person or through shell companies, purchasing a condo is not proof of criminal activity. The fact that those who have made such purchases have not been arrested or indicted undermines the claim that their mere presence in a Trump building is proof of criminal activity.
As Shakespeare wrote, “Ay, there’s the rub.” Association with unsavory characters is not a criminal offense. While it is quite true that Trump associated with several Russians with links to organized crime it is also true that Trump has never been indicted or charged with such criminal activity. Is he really that good in hiding his trail?
One of the loudest voices claiming that Trump is in bed with the Russians is Craig Unger. Craig was known as a good reporter at one point in his life, but I think his work on Trump is both shoddy and incomplete. To be fair, Craig is not the only one claiming Trump is facilitating Russian money laundering. Other prominent journalists, including Richard Behar, Tom Burgis of the Financial Times and John Harwood of CNBC, also have echoed Unger’s thesis.
All four focus much of their reporting on a Russian born American “mobster”, Felix Sater, to implicate Trump as a Russian money laundering chump. The following snippet from an interview Unger did with Vox about his book, House of Trump, House of Putin is representative of how Sater is used as some sort of proof that Trump is part of a money laundering scheme:
"Bayrock was a real estate development company located on the 24th floor of Trump Tower. The founder was a guy named Tevfik Arif and the managing director was Felix Sater, a man with numerous ties to Russian oligarchs and Russian intelligence. Bayrock proceeded to partner with Trump in 2005 and helped him develop a new business model, which he desperately needed.
Recall that Trump was $4 billion in debt after his Atlantic City casinos went bankrupt. He couldn’t get a bank loan from anywhere in the West, and Bayrock comes in and Trump partners with other people as well, but Bayrock essentially has a new model that says, “You don’t have to raise any money. You don’t have to do any of the real estate development. We just want to franchise your name, we’ll give you 18 to 25 percent royalties, and we’ll effectively do all the work. And if the Trump Organization gets involved in the management of these buildings, they’ll get extra fees for that.”
It was a fabulously lucrative deal for Trump, and the Bayrock associates — Sater in particular — were operating out of Trump Tower and constantly flying back and forth to Russia. And in the book, I detail several channels through which various people at Bayrock have close ties to the Kremlin, and I talk about Sater flying back and forth to Moscow even as late as 2016, hoping to build the Trump Tower there.
Tom Burgis, writing in the Financial Times, provides additional details on the relationship between Sater and Trump and implies something nefarious, perhaps even illegal, was afoot:
"As work on Trump Soho got under way in 2007, the partnership between Mr Trump and Bayrock was gathering momentum. Another tower, in Fort Lauderdale, was rising. A 2008 Bayrock presentation includes a picture of Mr Trump grinning beside Mr Arif and names him as a referee. Bayrock had its office on the 24th floor of Trump Tower and calls the Trump Organization a “strategic partner”.
The same presentation says Bayrock was one of the backers of the redevelopment of the 101-year-old Hotel du Parc on the shores of Lake Geneva, owned by Swiss Development Group, a Geneva-based company. In May this year, Nicolas Bourg, a Belgian businessman who says he worked with Viktor Khrapunov’s son Ilyas on US real estate deals, claimed in a separate dispute that Swiss Development Group was “owned and controlled by Ilyas and his family and used to conceal the movement and investment of his family’s money”."
All of this sounds pretty bad on the surface until you examine what Sater actually did. Messrs. Unger and Burgis neglected to analyze the critical fact that Felix Sater was an FBI informant since 1998. If Trump was taking dirty money or engaged in criminal activity with Russians then he was doing it with Felix Sater, who was under the control of the FBI. Felix Sater was proposing deals and making contacts with Russian criminals overseas and this activity surely was known by the FBI. If there was any suspicion on the part of the FBI that Trump was taking bad money, they would have recorded such activity in detail and he would have been indicted. Instead of running around in an orange jump suit, Donald Trump ran for President.
Given Sater’s relationship with the FBI, one needs to look at Trump’s relationship with Russians, especially those facilitated by Sater, in a different light. Put simply, were Trump’s real estate deals being used as bait to attract targets of interest for the FBI. Was Trump a witting cooperator with the FBI or unwitting?
We do know that Sater was trying to put together real estate deals overseas while serving as a FBI informant and working from Trump Tower in New York City. This was reported in a March 2017 Los Angeles Times piece:
Working from a 24th-floor office in Manhattan's Trump Tower, Felix Sater spent years trying to line up lucrative deals in the United States, Russia and elsewhere in Europe with Donald Trump's real estate organization.
For much of that time, according to court records and U.S. officials, Sater also worked as a confidential informant for the FBI, and — he says — U.S. intelligence.
"I was building Trump Towers by day and hunting Bin Laden by night," Sater, now 50, told the Los Angeles Times in a phone interview from New York.
As managing director of Bayrock Group LLC, a real estate development firm, the Russian-born businessman met Trump in 2003, court records show, when Trump was looking to expand his business and branding organization around the globe.
Why are the anti-Trump forces failing to grasp the import of Sater and his role as an FBI informant as undermining the claim that Trump was conspiring with the Russians? Sater’s role with the FBI has been widely reported:
There is no question that Sater led a double life during the years he worked with the Trump Organization.
In 1998, Sater pleaded guilty to a federal charge of racketeering for his role in a Mafia-linked $40-million stock fraud scheme. He quickly cut a deal, agreeing to become a secret FBI informant in hopes of getting a lenient sentence.
Court records were sealed to protect Sater's identity, so his role in the fraud case stayed secret for a decade while he was at Bayrock. After a court hearing in 2009, he was fined $25,000 but was not sent to prison or ordered to pay restitution.
Along with press reports regarding Sater’s role with the FBI, we have Sater’s attorney, in a letter sent to Judge Leo Glasser of the Eastern District of NY on 1 September 2005, telling the court that:
". . . Mr. Sater has been involed in on-going cooperation activities with law enforcement agents, and has provided truthful and credible information on a wide variety of criminal activities, some of which has already led to criminal prosecution of others."
Even Obama’s Attorney General, Loretta Lynch, provided Sater cover :
At his sentencing hearing, several FBI officials vouched for Sater's help. He got his biggest endorsement in January 2015 when Loretta Lynch was asked at her Senate confirmation hearing for U.S. attorney general why court records had been sealed in the fraud case.
If Trump was the target of the FBI, then fair observers must concede that the Bureau has failed during an 18 year period to obtain any incriminating information about Trump and his business practices. Had the FBI been successful, Trump surely would have already been indicted by now in the Southern District of New York and charged with criminal conduct.
Sater’s status as an FBI informan is not an honorary position. It is not a job that entitles the informant to regular social chats with an FBI agent. It is a job that puts the informant in the position of having to help the FBI make criminal cases, including entrapping folks willing to engage in illegal acts. The FBI website describes the informant role:
"The courts have recognized that the government’s use of informants is lawful and often essential to the effectiveness of properly authorized law enforcement investigations. However, use of informants to assist in the investigation of criminal activity may involve an element of deception, intrusion into the privacy of individuals, or cooperation with persons whose reliability and motivation may be open to question.Although it is legally permissible for the FBI to use informants in its investigations, special care is taken to carefully evaluate and closely supervise their use so the rights of individuals under investigation are not infringed. The FBI can only use informants consistent with specific guidelines issued by the attorney general that control the use of informants."
And who was in charge of the FBI during all of the time that Sater was a signed up FBI snitch? You got it—Robert Mueller. Let us just stick with the facts—during Mueller’s term (2001 thru 2013) the FBI did not make or bring a case of money laundering against Donald Trump. Yet, during this period, Felix Sater, a fully signed up and opeating FBI informant, was trying to cobble together real estate deals with Russians of questionable character. Trump and his organization were not implicated in any of this activity in a way that led the FBI to seek an indictment against them.
Many House Democrats are convinced that there is untapped evidence implicating Trump in a variety of money laundering schemes. But their belief, in my view, is based on a fundamental ignorance about money laundering and financial crimes in general. Tax avoidance, for example, is not money laundering. Highly publicized real estate deals are not the kind of cleaning operation that genuine money launderers embrace. Why? Those kind of deals come with scrutiny and the last thing that criminals with dirty money want is a high profile and public attention.
If you hate Trump and are betting that the Democrat investigative tsunami will bring Trump down, I have a word of advice—don’t bet your house. Donald Trump may be guilty of boorish behavior and brash comments, but the evidence of laundering money for the Russians is not there.