Category: Robert Mueller

Mueller Said to Be Looking into 2008 Palm Beach Mansion Sale

Bloomberg reports that Special Counsel Robert Mueller has decided that Trump’s sale of his Palm Beach mansion to a Russian billionaire is worth a deeper look.

As readers of this site know, Dmitry Rybolovlev, the Russian fertilizer king, bought the future president’s Palm Beach mansion in 2008 for $50 million more than Trump paid for it just a few years earlier. The mansion, called Maison de l’Aimitie (House of Friendship), was in such bad shape that Rybolovlev got permission to tear it down and sell off the land beneath it.

Dmitry Rybolovlev

I’ve written how this transaction has the marks of a bribery case I followed here in San Diego.

Not long after the mansion sold, Trump was approaching default on loan from Deutsche Bank. And the $50 million Trump pocketed on the mansion sale was enough to cover the $40 million he had personally guaranteed to the German lender.

Here’s a bit more detail: The Palm Beach mansion sold in July 2008. That fall, Trump was desperately trying to get Deutsche Bank to extend a senior construction loan for the 92-story Trump International Hotel and Tower in Chicago. The Chicago project was already facing weak sales before the 2008 financial meltdown hit.

Unlike many other Trump Organization projects, the Donald was personally on the hook in Chicago.  He hadn’t licensed his name. He had no partners. He arranged all the financing himself: He put $77 million of his own equity into the tower and had given Deutsche Bank a $40 million personal guarantee.  (See “In Chicago, Trump Hits Headwinds,” The Wall Street Journal, 29 Oct. 2008.)

Trump’s Deutsche Bank loan came due Nov. 7, 2008 with an outstanding principal balance of $334 million, plus $251 million in interest. Not only did Trump not pay, but with his usual bombast, he sued Deutsche Bank to force them to extend the loan. Deutsche Bank countersued, and demanded Trump cough up his $40 million guarantee. Deutsche Bank ultimately extended the loan for five years and eventually Trump paid it.

There are a lot of dogs sniffing around this tree. The personal guarantees Trump made for his Deutsche Bank loans are also of interest to New York State regulators looking at the president’s relationship with the German lender’s wealth management division: according to The New York Times:

Additionally, the New York regulators recently requested information related to the hundreds of millions in loans Deutsche Bank’s private wealth management division provided Mr. Trump, one of the people said, paying particular attention to personal guarantees he made to obtain the loans. Those guarantees have declined as the loans were paid down and the property values increased, but it remains a source of interest to the regulators.

For those who want even more detail, I’ve embedded Trump’s Deutsche Bank personal guarantee at the end of this post. If anyone with some expertise in these matters finds anything interesting in there, please let me know.

Mueller’s team are also said to be interested in dealings involving the Bank of Cyprus. Rybolovlev, the Russian oligarch who bought Trump’s Palm Beach mansion, became the bank’s largest shareholder in 2010 when he purchased a 9.7 percent stake through his British Virgin Islands holding firm, Odella Resources. (Wilbur Ross, Trump’s commerce secretary, invested in the bank in 2014.)

The shady mansion sale is just one of the things FBI investigators and others are examining:

It seems that Mueller’s team is looking for evidence of a payment disguised as a real estate transaction, fee or gift that would give Russians what the intelligence community likes to call “levers of pressure” that could be used against the US president.

Trump’s Personal Guarantee

More on Robert Mueller and Mogilevich…

Mueller Hungary 2005

Special Counsel Robert Mueller, speaking in Budapest in 2005

Special Counsel Robert Mueller isn’t playing.

As I mentioned in my previous post, Mueller has brought on board attorney Lisa Caroline Page who worked on the FBI Task Force in Budapest that investigated Russian Mob kingpin Semion Mogilevich.

By adding Page, Mueller may be sending a signal that he’s going after links between Trump and Russian organized crime, and perhaps zeroing in on Mogilevich ties.

Catching Mogilevich was an important part of Mueller’s 12-year tenure as head of the bureau and big reason why the FBI put the Mob boss on its 10 Most Wanted List in 2009.

Here’s what Mueller himself had to say in 2005 during a visit to Budapest for the 10th anniversary of the International Law Enforcement Academy:

And the FBI/­Hungarian National Police Organized Crime Task Force has been up and running for five years, working to dismantle organized crime groups. Just last month, we obtained approval to have FBI agents permanently stationed here in Budapest to work on the Task Force.

The Task Force has had a number of successes. Right here in Budapest , Ukranian-­born Semion Mogilevich established the headquarters of his powerful organized crime enterprise. The group engaged in drug and weapons trafficking, prostitution, and money laundering, and organized stock fraud in the United States and Canada in which investors lost over $150 million.

As soon as the Task Force began investigating his activities, Mogilevich realized he could no longer use Budapest as his base of operations. He immediately fled the country, and is now hiding in Moscow. Working closely with Hungarian authorities, United States prosecutors obtained a 45-­count indictment against Mogilevich and three other criminals, charging them with money laundering, securities fraud, and racketeering.

Mueller’s biographer, Garrett Graff, called the Budapest task force “perhaps the most unique FBI force in the world.” Hungary was the only country outside Afghanistan and Iraq where agents were permanently stationed.

The Budapest task force assembled a global picture of Mogilevich’s operation. According to a Dec. 22, 2006 report in The Wall Street Journal, FBI agents in Budapest got help from authorities in Israel, another of Mr. Mogilevich’s suspected bases of operations, and Cyprus, an offshore banking center used by many Russians.

So elusive was Mogilevich, however, that agents in Budapest were chasing smoke, sometimes even in their own backyard. Graff’s book, The Threat Matrix: Inside Robert Mueller’s FBI and the War on Global Terror, contains this tantalizing piece of information:

The full extent of Mogilevich’s US ties are still unknown. Although banned from entering the country because of his alleged criminal ties, Mogilevich has visited Boston, Philadelphia, and Miami under aliases to meet with U.S. associates, and the FBI photographed at least one of his aides attending a Republican Party fundraiser in Texas.

Mogilevich was arrested in Moscow in 2008 and then subsequently released him the following year. He lives more or less openly in Russia today. While US eventually caught up with Osama bin Laden, Mogilevich was the one who got away.

Mueller’s role as special counsel for Trump’s Russia links may be a second chance of sorts. By probing Trump’s links to Mogilevich, Mueller may be able to snare an even bigger fish.

No wonder he’s driving Trump crazy.