The $250 million-dollar civil tax fraud case levied against Russian-America Felix Sater has been dismissed by a Manhattan court. Sater was under prosecution in a qui tam case. Qui tam allows whistleblowers to file for the state, the whistleblower for this case being lawyer Fred Oberlander. Oberlander was a representative for Sater’s business partner Jody Kriss in a money-laundering case filed against Bayrock, an international real-estate development firm. Oberlander filed the qui tam over stricken information judges had removed from Kriss’s originating complaint. As is done in qui tam, the attorney general reserves the right to intervene. The case was thrown out as Oberlander’s information was previously removed from federal complaint by federal judges. As such information is regarded as confidential the Manhattan court saw no reason to continue the case forward. The decision was later confirmed by Robert Wolf, Sater’s lawyer. Wolf went on to posit that the case had been dismissed for it merits rather than procedure. He also mentioned that Oberlander has been referred to the DOJ on the grounds of criminal contempt twice.
Attorney General Eric Schneiderman declined to intervene in this case when it was proposed last year. He did send a letter to the Supreme Court over the matter of misleading press release from Oberlander claiming he gave the case permission. He did state that he would continue to monitor the case in favor of state’s interest.
The dismissed case stems from a 2010 lawsuit against Bayrock and Sater. At the time Sater was working alongside former Finance Director Jody Kriss. Kriss filed for the lawsuit after witnessing alleged criminal conduct. Oberlander represented Kriss in court. Oberlander’s case alleged that the international real-estate firm was mob owned and engaged in a number of continuous crimes. Those crimes were identified as tax evasion, back fraud, money laundering, wire fraud, conspiracy, mail fraud, bribery, extortion, and embezzlement. Kriss went on to accuse Tevfik Arif, Bayrock’s founder, of cheating him out of millions of dollars owed to Kriss. The accusation alleged that Arif syphoned the money through fraud, racketeering, and money laundering. All of this occurred during Arif’s negotiations with the Trump Organization over their collaborated Trump SoHo project. Kriss even went further and painted Trump as a marginal victim, stating that Arif did not disclose Sater’s criminal past to the mogul.
Oberlander filed the qui tam based on confidential information that came out during the trial. Information judges allowed to be stricken from the record.
Trump followed up this statement in his own deposition in 2007, stating that he would not have agreed to a partnership if had known of Sater’s past. Although Trump said he would not be able to identity Sater in a room, Sater himself has said they worked on a constant basis. The real estate firm’s offices were only two floors beneath Trumps in Trump Tower. Sater testified in his own deposition that Trump valued his loyalty and connections to Russia. As both Kriss and Trump have testified that Trump was unaware of Sater’s criminal record, it can be argued that the mogul was at a disadvantage.
The criminal charges in Felix Sater’s past came about in 1998. He pleaded guilty to complacency in a $40 million stock fraud scheme planned by the Russian Mafia. Since then he has assisted FBI investigation into organized crime as an informant. He has remained mostly clean since then until the allegations in Kriss’s case. Trump’s relationship to Sater, and involvement during the Trump SoHo projecti, factor into ongoing Russian collusion levied against him.