Category: Russia

Trump Ocean Club

My friend Ken Silverstein has a great new story out via Global Witness about Trump’s tower in Panama.

Put simply, it’s is the most revealing look we’ve had into how Russians were recruited for Trump’s towers.

Part of the business strategy at Trump Ocean Club was luring wealthy and “secretive” Russians — who didn’t want any questions asked about where their money came from.

The money quote in this story for me comes from a broker involved with the project named Alexandre Henrique Ventura Nogueira. Half of Nogueria’s customers were Russian.

“I had some customers with some, you know, questionable backgrounds.” He also said that he found out later that some customers were part of the Russian Mafia.

Another real estate broker who worked in Panama during the TOC pre-construction sales period told Global Witness that Eastern European and Russian investors at the TOC were “very secretive”, especially when setting up shell corporations, so you “don’t know their names” and “didn’t know where their money came from.”

Rich Russians – whom he called “the whales” – were prized clients because brokers could earn substantial commissions working with them. These were exactly the kind of purchasers needed by Trump and others to secure early sales, and therefore the financing through Bear Stearns to develop the project.

Ventura Nogueira was asked point blank about this: “Did the Trump Organization know there were some Russians there with strange backgrounds involved in buying? I don’t know.”

There are a lot of things to like about this story. (Story is the wrong word. It’s a 28-page report.) Not only does it reveal the corruption that built the Trump Ocean Club, but it goes a step further. Ken’s story offers solutions — a rarity in journalism — to eliminate the pervasive money laundering in real estate that built not only Trump’s tower in Panama, but his tower Manhattan’s Soho neighborhood, Azerbaijan, and other places.

The story calls the Trump Ocean Club one of Trump’s most lucrative deals. How lucrative? We don’t know.

But what was in it for Trump? There is little transparency around Trump’s financial agreement with Newland, a company that filed for bankruptcy in 2013. In fact, according to Univision News’ reporting of a New York court’s hearing on the bankruptcy, Newland refused to turn over the agreement with Trump to license his name. This prompted the judge to say to Newland’s attorney: “Go to Panama. If you want to do your deals in secret, go and do it in Panama. Don’t do it in my court.”

You should also check out Ken’s popular blog, Washington Babylon.

 

 

Exclusive: FBI’s Wiretap Application for Vyacheslav Ivankov

 

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Vyacheslav Ivankov

I’m posting here for the first time the FBI’s 52-page application filed in 1995 for the interception of a cell phone belonging to Russian Mob boss Vyacheslav Ivankov.

Here is the link: Vyacheslav Ivankov Wiretap Affidavit

There’s background on Ivankov and his (somewhat tenuous) connection to Trump here and here.

Couple of notes:

  • The document doesn’t mention Trump and does not involve him (as far as I can tell).
  • Publishing the information in this document has gotten journalist Robert I. Friedman sued. (See Komarov v. Advance Magazine Publishers). Most of the salient material in this affidavit can be found in Friedman’s excellent book Red Mafiya
  • This is an ongoing experiment in collaboration. If you find this document helpful, useful, or interesting or you have information that adds to the picture, please click the black contact button at the top of the screen and drop me a note.

Who is Bill Browder? (Updated)

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Bill Browder

This much is clear: Vladimir Putin hates Bill Browder.

Browder was once the largest foreign investor in Russia and, it needs to be said, a great admirer of the Russian president. Today, he is perhaps the Putin’s regime’s fiercest critic, and Browder must derive some satisfaction in the way he grates on the Kremlin.

Browder’s change of heart came well after he was kicked out of the country in 2005. It was the death of an accountant who worked for Browder named Sergei Magnitsky that did it. Magnitsky was thrown in prison, where he was beaten and left to die in 2009 from lack of medical treatment. His crime? Magnitsky had had the temerity to expose  a massive $230 million tax fraud perpetrated by Russian officials.

In response, Browder lobbied Congress to draft legislation imposing sanctions on the Russian officials responsible for Magnitsky’s death. The Magnitsky Act was signed into law by President Obama in 2012.  Browder has continued his campaign in Canada, the United States, and Europe —  and it has driven Russian officials bat-shit insane.

Russian legislators responded to the Magnitsky Act by banning adoption of Russian children by Americans — harming their most vulnerable citizens for what, political retaliation? A year later, in a shameful display of injustice, a Moscow court convicted Magnitsky of tax evasion in a posthumous trial. (Browder was found guilty of fraud in absentia.) The Trump campaign was drawn into a June 2016 meeting with Russians on the Magnitsky Act when the future president’s son was promised dirt on Hillary Clinton.

In the latest hysterical response, now it’s Browder who is suspected of murdering Magnitsky. According to Russian prosecutors, Browder colluded with a British intelligence agent to convince Russian prison doctors to withhold care for Magnitsky. The evidence is comical: poorly written communications that were allegedly intercepted from Western spy agencies.

Russia managed to get Browder briefly banned from entry to the United States by putting him on an Interpol wanted list. His visa privileges were restored by the Trump administration on Monday after members of Congress and the press leaped to Browder’s defense.

The reason the Magnitsky Act drives the Kremlin nuts is that it hits the kleptocrats in their unprotected flank. Russian oligarchs and the kleptocrats who steal from the state store their assets in the West. And what is the point of stealing a fortune from the Russian people if you can’t buy condos in Miami or Manhattan or send your kids to exclusive British schools because of some lousy sanctions?

Browder has rightly been praised for his courage in standing up to the Putin regime. And his book, Red Notice, is an excellent read.  However, the laudatory coverage Browder regularly receives from a press corps he has skillfully cultivated and his star treatment before a US Congress he lobbies require a selective reading of events.

The fact is that Browder was once one of Putin’s biggest cheerleaders, as he admitted during deposition:

Q: So in 2005, you were quite a supporter of Vladimir Putin’s, right?

A: Correct.

Most gallingly, he defended the 2003 arrest of Mikhail Khodorkovsky, the head of Yukos, one of the world’s biggest oil producers. Stalin would have approved of the way Khodorkovsky was convicted, imprisoned in a gulag at Russia’s border with China, and then put on trial and convicted again. His  company was seized and acquired by the state.

It wasn’t exactly clear what Khodorovsky had done wrong except he had criticized Russia’s corruption during a televised meeting with President Putin a few months before his arrest and funded a movement promoting the rule of law and democratic values called Open Russia.

Khodorkovsky’s arrest and the seizure of Yukos wasn’t democracy; it was Mafia tactics. But Browder hailed Khodorkovsky’s arrest as progress toward Russia’s return to greatness:

Putin, was only doing “what any leader would do to further his nation’s interests,”  Browder wrote. “While there may be some things about Putin that we disagree with, we should give him the benefit of the doubt in this area and fully support him in his task of taking back control of the country from the oligarchs.”

As for Khodorkovsky, Browder said he was hiding something. “Khodorkovsky collected an enormous pile of cheap assets from the government and minority shareholders, and then embarked on an impressive charm and lobbying offensive to legitimize himself and his wealth. He has been very successful in getting people to forget his not-so-distant past,” Browder wrote.

Now, it’s Browder who has been very successful in getting people to forget his not-so-distant past. Putin’s No. 1 enemy, as he describes himself, was once Putin’s No. 1 fan. (To his credit, he did expose corruption at the companies in which he invested such as the gas giant Gazprom, and this made powerful enemies.)

Here is part of a presentation by Browder in April 2005 titled Seven Big Myths About Russia

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Consider how The Wall Street Journal described Browder in 2006 after he had been kicked out of Russia:

Browder has been one of the most outspoken supporters among foreign investors of Russian President Vladimir Putin. He argued tirelessly that the western media and critics of the Kremlin were misreading the situation and that Putin’s administration was good for investors. He was defending the Kremlin as recently as January, when Browder spoke at the World Economic Forum in Davos, Switzerland.

That’s right. Browder was still defending Putin even after he was denied entry to the country.

Why such love for Putin? In deposition, Browder says the two men never met. The answer: It was just business. Investing in Russia was very profitable. His fund, Hermitage Capital Management, recorded $1 billion in profits and Browder pocketed $130 million in 2006.

When Browder was denied entry to Russia, ostensibly as a threat to national security, his Hermitage Capital Management was the country’s largest foreign investor with $4 billion in Russian equities. Like Khodorkovsky before him, Browder appeared to have made the mistake of believing that he was untouchable. Who in their right mind would ban the man who brought billions into the Russian economy?

Browder’s lobbying of US politicians and courts would sit better with me had he not given up his U.S. citizenship. In 1998, Browder obtained a passport from the more Russophilic United Kingdom. Published reports say he did this for tax reasons but he gave a different explanation during deposition:

Q. So why did you give up your U.S. citizenship?

A. Personal reasons.

Q. And what are those personal reasons?

A. My family was persecuted during the McCarthy era….

 Q. What kind of persecution did you face?

A. My grandmother was sick with cancer and the U.S. Government tried to deport her to Russia when she was dying. [Browder’s grandfather, Earl Browder, led the Communist Party in the United States.]

Q. What year was that?

A. In 1950 something.

Q. I see. And so 1998, this all came back as a rush of emotion and you decided to give up your U.S. citizenship?

A. No.

Interestingly, Britain, Browder’s new home, has been much slower to take up the Magnitsky cause. (A bill passed the House of Commons this year and is now being considered in the House of Lords.)  The Brits have a conflicted relationship with Russian rubles: They have to come to depend on them.  London is where Kremlin insiders like to stash their money. It’s where they buy homes through shell companies, go shopping and send their children to posh schools.

Billions of pounds have washed through Britain since the fall of the Soviet Union, (although nobody knows exactly how much). A group even offers kleptocracy tours of London. The imposition of sanctions by Great Britain against Mother Russia would drain that swamp but it might also drain the balance sheets of some powerful banks.

Browder has been demanding justice for Sergei Magnitsky — and rightfully so — but, at least in one instance, he literally ran away from an American court.  Here is what happened when a process server tried to serve Browder with a subpoena in New York following his 2015 appearance on The Daily Show:

The case involved a Russian financier named Denis Katsyv. At the time, Katsyv was accused in federal court of laundering money that was part of the fraud that Sergei Magnitsky uncovered. The case that was based on information Browder provided  to prosecutors in New York.¹   Browder eventually did have to testify and I’ve posted Browder’s Deposition.

Am I wrong in thinking that it’s grossly unfair and somewhat suspicious for Browder to demand justice for Magnitsky while fleeing a subpoena in the case he instigated?  Shouldn’t he be proud to stand up for his late friend and colleague?

Please don’t mistake what I’m saying here. I’m no fan of Putin, but Browder is undermining his own cause when he selectively uses the law and the press to serve only his own interests.

1. Katsyv’s case, U.S. v Prevezon Holdings, was settled for $5.9 million before trial.

The Russian Gangster Who Loved Trump’s Taj Mahal

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Vyacheslav Ivankov

Remember Vyacheslav Ivankov, the Russian gangster?

He was perhaps the most feared of the Vory vor v zakone, a member of the “thieves-in-law,” the highest criminal echelon in Russia.”Yaponchik” (Little Japanese), as he was known, came to New York in March 1992 to organize the Russian Mob.

Despite Ivankov’s flagrant, multinational criminal activities, during his first years in America, the FBI had a hard time even locating him.

They eventually found him in Trump Tower. A copy of Ivankov’s personal phone book, which was obtained by author Robert I. Friedman, included a working number for the Trump Organization’s Trump Tower Residence, and a Trump Organization office fax machine.

Ivankov vanished again and then turned up at the Taj Mahal in Atlantic City, the Trump-owned casino that Trump liked to call the “eighth wonder of the world.”

I’ve come across some FBI documents that add a bit more to this story:

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And this:

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The Taj Mahal had become the Russian mob’s favorite East Coast destination. As with other high rollers, scores of Russian hoodlums received “comps” for up to $100,000 a visit for free food, rooms, champagne, cartons of cigarettes, entertainment, and transportation in stretch limos and helicopters.

The Taj Mahal was just treating Ivankov as a good customer, right?

Who is Tevfik Arif, Part II

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In June of 2005, Tevfik Arif celebrated his birthday at the grand opening of  Turkey’s most luxurious hotel, the “seven-star” Rixos Premium Belek.

Guests came from all over the world: from America, from Latvia, from St. Petersburg, Israel, the Cote d’Azur, Ukraine and Samara.  Attendees included retired NHL star Pavel Bure, Moscow restaurateurs, Russian businessmen, and billionaires who sailed in by yacht or flew in on private jets.

Donald Trump, who had partnered with Arif’s New York company Bayrock to build a tower in Ft. Lauderdale, Florida, could not make it, but he sent a message of congratulations: “Tevfik is my friend! Let’s drink to Tevfik!”

Recep Erdogan, the prime minister of Turkey and future president, stopped by to join the well-wishers, according to a gossipy report on the party in the Kremlin-friendly Russian newspaper Izvestia.

Turkey has been good to Arif.  It became Arif’s home after he left Kazakhstan in 1994. Arif obtained a Turkish passport that same year and  went into business with Fettah Tamince, the founder of the Rixos hotel chain. The two men partnered in 1999 to build a hotel Antalya. Then Arif expanded his business in New York.

Another guest at the Rixos Premium Belek was Tamir Sapir, the New York real estate tycoon and Soviet emigre who partnered with Trump and Arif to build Trump SoHo. Sapir arrived on his 160-foot yacht Mystere.

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Alexander Mashkevitch

Also arriving for the party was Israeli-Kazakh billionaire Alexander Mashkevtich. , one of Bayrock’s strategic partners. Mashkevitch’s  friendship with Arif will soon embroil him in a deeply embarrassing scandal — but I’m getting ahead of myself.

Mashkevitch and Arif had crossed paths in the post-Soviet metals industry in Kazakhstan. (See Part I) Mashkevitch, together with his partners Patokh Chodiev and Alijan Ibragimov, had joined up with Michael Cherney and Trans World Group to enter the metals business in post-Soviet Kazakhstan.

Back to Arif’s party. What a celebration! What a moment for a simple Soviet hotel bureaucrat!

Two years later, Arif will stand next to Donald Trump at another lavish party in lower Manhattan for the  launch of Trump SoHo, the tower the two men are building together.

And that was the top of Arif’s roller coaster ride.

Shortly after the Trump SoHo launch one of his employees, Felix Sater, was exposed in The New York Times as a convicted felon who had swindled investors out of $40 million with the help of the Russian and American mafia. Trump SoHo opened on 2010 and began a multi-year slide to foreclosure.

And then, on the night of September 28th, 2010, Turkish police roped down from helicopters onto a yacht and bust up a prostitution ring with underage girls that prosecutors alleged was run and financed by Arif.   Some 20 people are detained. Among them, according to the Israeli press, is the Kazakh billionaire Alexander Mashkevitch, who paid for the yacht.

Models

Some of the “models” rounded up on the Savarona yacht (as photographed by Turkish media).

Arif’s friends, including Donald Trump, can’t get away from him fast enough.  “I really don’t know him well, Mr. Arif,” Trump said in a 2011 deposition. “I’ve met him a couple of times.”

According to a copy of the bill of indictment, obtained by theblacksea.eu, the charges laid against Arif are: “Trade in human beings, involvement in, inducement or aiding and abetting to prostitution, traffic in juveniles under 18, creation of criminal organization with the purpose of commission of crime.”

Before I get a nasty letter from Arif’s lawyer, I should say that Arif was acquitted of all charges in 2011 and no underage girls were found on the yacht. It didn’t help the prosecution’s case that the ring instructed the girls not to testify. “Keep the girls as silent as the grave,” read one text.

But the indictment lists the details that Turkish police uncovered while listening in on the prostitution ring’s phone conversations for months. They recorded members of the group haggling over prices for underage girls and this exchange of text messages between a member of the prostitution ring and a woman named Olga.

Olga: “Do you want all models for sex? I should know it because many don’t agree for sex”,

The response: “Olga, client wants sex”

The indictment describes this harrowing discussion between Arif’s major domo, Gyundyuz Akdeniz, and one of his underlings:

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Arif was usually more circumspect, possibly aware that people were listening. In this conversation in March 2010, Arif and Akdeniz discuss the arrival of five girls, (including two 16-year-olds) to meet “guests” (including Mashkevitch) at the Rixos Premium Belek.

Tevfik Arif: What is the matter, what is happening? Tell me.

Akdeniz: Do you mean the guests?

Arif: What is happening at all? I know nothing.

Akdeniz: The guests are arriving tomorrow evening. Mr. Mashkevitch will arrive.

Tevfik: When will the guests arrive?

Akdeniz: The plane will arrive in a little while, there must be four.

Arif: Umph, umph

Akdeniz: Oh, sorry, five must arrive now.

Arif: Who are they from?

Akdeniz: Two are from Sasha [provider of girls]

Arif: Umph, umph

Akdeniz: Three are from the new agency.

Arif: And those two from Sasha are the former ones, aren’t they?

Akdeniz: No, the former ones will arrive at 1 a.m.

Arif: I see, he sent the new ones.

Akdeniz: Yes, tomorrow two will arrive from Sasha.

Arif: Okey.

To be continued….