TRUMP BUSINESS PARTNER LAUNDERED MONEY FOR KAZAKH OLIGARCH

A convicted fraudster and former business partner of President Trump is co-operating with a high profile US money laundering investigation which implicates the notorious Kazakh Oligarch Mukhtar Ablyazov.

Felix Sater, who was a senior adviser to the Trump Organisation while it built the Trump Soho apartment complex in New York, has been subpoened to testify as a witness during a civil lawsuit in which Ablyazov and his Kazakh associates are accused of laundering stolen funds from Kazakhstan via offshore companies and then into US real estate deals.

The lawsuit has been filed in the Southern District Court of New York against Ablyazov by the Kazakhstan government and the Kazakh state-owned BTA Bank. They allege that the Kazakh Oligarch, former chairman of the BTA Bank, stole $4 billion from the bank by authorising loans to dozens of offshore companies, many of which he was the beneficiary. In 2009 Ablyazov fled to London where he spent millions of dollars trying to convince the authorities that the fraud allegations were due to his funding of the main opposition party in Kazakhstan.

However, in 2012 the Oligarch was found guilty of contempt of court in the High Court after he refused to disclose the beneficiaries of the offshore companies that held his assets. On the day that he was due to be sentenced, Ablyazov escaped to France where he was a fugitive. He was then arrested and due to be extradited to Russia and Ukraine but was freed after numerous appeals in the French courts.

Ablyazov’s closest business associate, Viktor Khrapunov, and his son-in-law Ilyas Khrapunov are also being sued by the BTA bank for fraud and money laundering. The Khrapunovs fled to Switzerland and created Swiss and Luxumberg-based investment companies that used European banks, including Deutsche bank, to move their assets around the world. Sater was their primary intermediary in the USA where the Khrapunivs laundered millions of dollars during the purchase of three apartments in the Trump Soho Hotel which was facilitated by Sater, according to the court documents.

Until recently Sater, former managing director of Bayrock, refused to comply with the subpoenas. But last month a court document indicated that the former Trump business partner is now willing to co-operate with the discovery process and sit for a deposition. This is devastating news for the Kazakh Oligarchs because Sater has direct knowledge of their financial affairs, secret assets and source of wealth. Although he is not a co-defendant in the lawsuit filed by the Kazakh government, Sater worked with the Khrapunovs on real estate deals. This included $3.1 million that was used to purchase apartments in the Trump Soho Hotel, a $450 million, 46-story, 39-unit hotel condominium located at 246 Spring Street in New York City

An even more controversial revelation in the court filings is that the bank used by Ablyazov and the Khrapunovs was FBME Bank, a Cyprus based bank that was banned by the US Treasury Department in 2014 for money laundering and financing of international terrorism. FBME’s reputation was so bad that it has been closed down and is defunct. But emails filed in the US court reveal that a UAE shell company owned and used by the Kazakh Oligarchs had bank accounts at FBME, and Sater received SWIFT bank wire codes which were needed to transfer money from FBME to individuals and companies in the USA.

There is also evidence that funds transferred from FBME accounts were used to buy the apartments at Trunp Soho Hotel. An investigation by the Organised Crime and Corruption Reporting Project. Khrapunov’s daughter Elvira received $5 million from a Cyprus shell company which used an FBME account to make the transfer. Some of this money was then used to buy the three apartments at Trump Soho Hotel which were then resold soon afterwards.

The FBME bank is not a defendant in the lawsuit because the Kazakh authorities moved too slowly. But Special Prosecutor Robert Mueller has requested and obtained the Cyprus bank records from FBME as part of his investigation. A source close to Mueller said that these records related to Paul Manafort, former Trump campaign manager and already indicted. But the funds transferred from FBME accounts are just as likely to focus on Ablyazov and the Khrapunovs and how their money was used to buy Trump apartments in New York City.

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