Avatar_zqiakf

Sam Thielman

Sam Thielman is an investigative reporter for Talking Points Memo based in Manhattan. He has worked as a reporter and critic for the Guardian, Variety, Adweek and Newsday, where he covered stories from the hacking attacks on US and international targets by Russian GRU and FSB security services to the struggle to bring broadband internet to the Navajo nation. He lives in Brooklyn with his wife and son and too many comic books.

Articles by Sam

Donald Trump never seems to remember he allowed two men convicted of securities fraud to sell his name to real estate developers on three different projects.

Trump’s selective memory is just another confounding aspect of his long-standing relationship with one of his primary finance partners through the Bayrock Group, Felix Sater. His efforts to distance himself from Sater stretch back a decade, even as Sater claims that he continued to work on Trump projects until as recently as late 2015. Even after Trump took office, Sater was involved with floating a purported plan for a Russia-friendly foreign policy toward Ukraine to the administration by way of his childhood friend, Trump lawyer Michael Cohen.

In December 2007, Trump was shocked! to discover that Sater had a fraud conviction, he told the New York Times.

“We never knew that,” he said.

But he should have known, and he should have known Sater wasn’t the only one.

TPM has learned that in January 2007, the developer of the Trump Phoenix Plaza filed a lawsuit revealing 1998 fraud convictions for Sater and his confederate in a pump-and-dump scheme, a man named Sal Lauria, who had published a book detailing the scheme in 2003.

The suit was retroactively sealed in Arizona after having been made publicly available. The exact date of its filing—January 11, 2007—has not been reported. Perhaps it’s possible that Trump, who had worked with Sater for years at that point, was completely in the dark until the hasty sealing, but that seems unlikely.

The strangest thing about Sater’s 1998 fraud conviction is that few people beyond Sater’s immediate circle of business associates—Trump, Cohen, Lauria, the rest of Bayrock—would have had occasion to know about it. Any investor performing due diligence on Sater and Lauria would not have learned of the conviction. It stayed under seal for more than a decade, even after the Times outed Sater as a convict, forcing him to leave Bayrock; even after the cooperation agreement became a major point of contention in a subsequent lawsuit.

The veil drawn across the fraud case was so total that Trump even performed an encore of his who’s-that-guy routine years after the Times interviewed him about Sater: In a 2013 deposition for a suit in which Trump’s Fort Lauderdale development—also a Bayrock project—was accused of fraud, Trump claimed that he wouldn’t know Sater if the two men were sitting in the same room.

A Bayrock slide from a presentation, in which the Trump Phoenix is described as a project “Bayrock Group and The Trump Organization are developing.”

By that time, another lawsuit had been pending for years alleging that Sater’s failure to disclose his fraud conviction was itself a fraud. Filed in 2010, the lawsuit alleged that Sater had defrauded Bayrock investors, dating back to 2007, before the Times article. It was filed by one of Bayrock’s own finance directors, Jody Kriss, represented by a lawyer named Frederick Oberlander.

In court papers filed during the Kriss suit, Oberlander addressed Sater’s fraud conviction and the cooperation agreement that kept it secret; for that, he was referred for criminal contempt. The vigor of the court’s pursuit of Oberlander surprised many; reporter and legal blogger Dan Wise memorably referred to it as “Javert-like.”

Oberlander was not deterred: Though he no longer represents Kriss, he saw Sater as emblematic of a larger problem, and filed a second suit on behalf of the estate of Ernest and Judit Gottdiener, an elderly couple, since deceased, who had been among the victims in the original securities fraud. Sater, Oberlander said, owed them restitution, and for some reason neither he nor his associate Sal Lauria had been required to pay it. A third conspirator, Gennady Klotsman, was required to pay $40m all by himself, but because Sater and Lauria’s sentences were kept secret, Oberlander contends, their victims were never informed that they wouldn’t get their money back.

The question of why and how, exactly, the government forgave Sater and Lauria’s debts to their victims remains unanswered. Boz Tchividjian, a criminal law professor at Liberty University, was horrified at the notion that the government might use stolen property to negotiate with cooperating criminals. “Restitution is money that belongs to the victims,” he said. “The defendant has no rightful claim to stolen property.”

“National security” is a phrase that often crops up in defense of Sater. A federal prosecutor argued in court that Sater’s cooperation was so extensive it stretched all the way to Al Qaeda, a claim Sater repeated to TPM. Sater took part in “ten years of constant undercover work and arrests and indictments as well as convictions, some very extensive,” the prosecutor told the government in a court hearing transcript posted by Wise.

Oberlander has a more prosaic explanation, involving no terrorists: Sater was sentenced in secret and never had to return the money his firm had stolen; Oberlander argues, too, that the fact of Sater’s sealed conviction constitutes fraud all by itself. “My assumption here is that they were very concerned that they had given Sater an illegal sentence and were very concerned that if the fact of his conviction and cooperation got public, then there would be a whole lot of shit,” he told TPM.

Oberlander believes, too, that Trump knew about Sater’s convictions and stayed involved; indeed, it’s difficult to understand how he couldn’t have known. Thanks to Oberlander, it also became clear that Sater’s sentencing was kept secret—that did not come until 2009, to the annoyance even of the judge in the case, Leo I. Glasser, who said at the time that keeping Sater in limbo for 11 years since his conviction was in itself a kind of sentence.

“Fred Oberlander is a complete nut job and anything he says comes from a place of very deep dementia,” Sater told TPM. Sater said his entire sentence was a $25,000 fine, and that the mild sentence “should be enough [for you] to understand what the Judge thought of my national security assistance to this country.”

Sater’s lawyer Robert Wolf wrote: “Any claim by Frederic Oberlander that Mr. Sater’s cooperation was secret to avoid embarrassing the government is also pure garbage and has been uniformly rejected by every judge and every court that he has raised it.”

The judge who sentenced Sater, Leo I. Glasser, declined to provide any information that hadn’t already been reported, directing TPM to Google, but he did assure TPM that more information was forthcoming, likely in a report responding to Forbes’ Richard Behar, who has moved to unseal documents related to the sentencing. “There are proceedings, there’s one in progress now, and the motion has been made to unseal all that information,” Glasser told TPM by phone on Wednesday.

“A report I think has been made and is under seal, but I believe it will be unsealed soon,” he said. “I really can’t speak to you about it.”

Both Sater’s lawyer and Oberlander’s lawyer, Richard Lerner, expressed skepticism that any information was forthcoming related to the cooperation agreement that allowed Sater to move freely in the world of high finance on behalf of the president.

Read More →

When reporters combed through the Panama Papers last year, they recognized a familiar name cropping up: the FL Group, a now-defunct Icelandic bank that in 2013 had been accused in a lawsuit of developing a scheme, ultimately never realized, to avoid $250 million in taxes on a $2 billion investment in real estate projects, many of them tied to President Donald Trump.

The bank began as a holding company for two airlines based in the little Nordic nation, Flugfélag Íslands and Loftleiðir—hence the name—until 2005, when it became its own financial institution with a surprisingly large number of Russian clients. After that, the firm became the leading equity fund in Iceland, according to James S. Henry, a former chief economist at McKinsey & Co. and a reporter for the Panama Papers’ Icelandic working group.

FL Group was one of a number of Icelandic banks with surprisingly deep ties to the Russian billionaire class ascendant in the wake of the dissolution of the Soviet system, according to Henry. The wealth of the post-USSR oligarch class was so directly tied to the Icelandic economy, in fact, that Russian president Vladimir Putin offered $5.4 billion to bail out Iceland’s banks during the global financial crisis, though the deal never went through.

The Icelandic bank managed to seal a 2007 deal to invest $50 million with the developer Bayrock Group, a firm run by two men convicted of stock fraud in the 1990’s, Felix Sater and Salvatore Lauria, alongside a former Soviet official named Tevfik Arif. A former finance director at Bayrock, Jody Kriss, sued the company in 2010 for allegedly misrepresenting Sater’s role—though the complaint remained sealed by the court until 2016. In an interview with Bloomberg, Kriss said another Icelandic bank called offering a counter investment to FL Group’s proposed $50 million, and Sater and Arif told him to stick with that firm because it was “closer to Putin.”

The $50 million payment was unusual, to say the least. According to Kriss’s complaint, FL Group bought 62 percent of the profits from four Bayrock properties, which was the developer’s entire stake. Those properties were a development called Waterpointe on a blighted 20-acre property in Whitestone, New York that Bayrock had agreed to detoxify; Trump SoHo; a Trump tower in Phoenix, Arizona; and the Trump Merrimac in Ft. Lauderdale, Florida. The deal would have left FL Group with profits from the four properties, but structured the investment as a loan. That way, the firm could avoid taxes on the dividends and call them “contingent interest,” a process Henry described as “asset stripping.” That process is so complex, and the offshore finance rules so arcane, that all Henry would say was that it “has been illegal.” It’s a deal Trump would have had to sign off on.

Kriss charged in his lawsuit that the deal was illegal, and that both Bayrock and FL Group were fully cognizant of that fact. The suit alleged that Bayrock and FL Group also colluded to keep the deal secret from the other firms that worked with Bayrock on its various projects, and agreed to pursue as much as $2 billion more in future projects. From the lawsuit:

The exchange was part of a larger deal whereby FL became Bayrock’s new partner. The new partners agreed to work together on the existing Four Projects and on so much of $2,000,000,000 worth of new projects as they might “agreed to agree” to develop together.

All this was to the exclusion of Plaintiffs and other minority members in the Subs, who should have shared the millions of dollars of the $50,000,000 and a share of the new projects.

The small size of the Icelandic economy means that most people who work in the financial sector in that country know each other. Björgólfur Thor Björgólfsson, the wealthiest man in Iceland, claimed FL had been infiltrated and taken over by pro-Russian interests, Henry noted. “He ended up owning about 30% of FL Group, and he claimed it had been taken over by hostile people who were channelling Russian money through it,” he recalled.

Another bank owned in large part by FL, Kaupthing, had made loans to Alexander Shnaider, the Russian-Canadian billionaire who financed the failed Trump tower in Toronto, which he used to buy a yacht. It also had other wealthy Russians on the books, among them Smirnoff Vodka magnate Yuri Shefler.

Ultimately, Bayrock never got that $2 billion. The global financial crisis, which eventually sunk both Kaupthing and FL Group, exposed the banks to scrutiny by regulators and law enforcement officers who aren’t usually privy to the inner workings of the financial system without a search warrant. Now that the companies had to declare bankruptcy, they had to open their books; almost as soon as they did, though, the loan books were shut.

“All three [major Icelandic] banks had three big private banking arms and they were based in Luxembourg,” Henry explained. “When the banks failed, Luxembourg authorities went in and immediately nationalized the subsidiaries of the Icelandic banks and then they were immediately resold and privatized.” Putin, whose concern for the Icelandic economy was also concern for exposed Russian oligarchs, immediately became less enthusiastic about his offer of a bailout, said Henry, who’d spoken to people who tried to negotiate the loan.

Of the three projects Bayrock planned with Trump and that FL Group allegedly wanted a cut of, the Phoenix development was completely scuttled and the Ft. Lauderdale hotel-condo went on to lose the Trump name. But the Trump SoHo was built and emblazoned with the name of the man who went on to the presidency.

In his complaint, Kriss contended that “a confidential source” said Bayrock was already awash in funds from “cash accounts at a chromium refinery in Kazakhstan” belonging to the family of Bayrock principal Tevfik Arif and that the firm was concealing the source of the cash. Among financiers like these, both the suit and Henry contend, the FL Group was right at home.

This post has been updated

Read More →

Rinat Ahkmetshin, who met last year with Donald Trump, Jr. alongside other Russian operatives peddling damaging information about Hillary Clinton, has worked more than once with firms accused of hacking political and legal opponents, according to a new profile of the Russian-born lobbyist TPM wrote about in July.

The New York Times associates the former Soviet operative and beltway influence-peddler with a previously unreported hacking campaign carried out on behalf of Suleiman Kerimov, a 51-year-old billionaire financier the Financial Times dubbed “the secret oligarch.”

Kerimov was accused of attempting to infiltrate the computer network of a business rival, Russian parliamentarian Ashot Egiazaryan, while he was Akhmetshin’s client. When Egiazaryan’s lawyers found malware in emails, they used that malware to send traceable documents back to the senders; those documents were then opened by people using computers at one of Kerimov’s companies.

Akhmetshin said he was only tangentially involved in Kerimov’s dispute with Egiazaryan, according to the Times:

After an inquiry of more than 18 months, Scotland Yard investigators concluded in January 2013 that they lacked sufficient evidence to bring any charges, a spokesman said. Representatives of the lawyers targeted declined to comment.

Mr. Akhmetshin has said in court papers that he was paid only by one businessman in the alliance with Mr. Kerimov, but coordinated with Mr. Kerimov’s team.

Kerimov, for his part, is believed to have been a target of a high-level French money-laundering probe. A house in the south of France that was raided earlier this year in connection with the probe is said to belong to him, according to the Hollywood Reporter.

Ahkmetshin has been more directly accused of hacking a second client’s business rival: International Mineral Resources, a Russian mining concern. IMR alleged in court papers that Akhmetshin, hired by its competitor Eurochem, had undertaken a public PR campaign targeting them. Over the course of that campaign, the company alleged, somebody broke into its computers, made off with gigabytes’ worth of data and sent that data to reporters and human rights groups, according to the Daily Beast. The allegations were later withdrawn.

Akhmetshin hasn’t been accused of anything related to the hacks of the Democratic National Committee, the Democratic Congressional Campaign Committe, or Hillary Clinton’s campaign chairman, John Podesta. At the moment, the organization that broke into the networks of multiple Democratic Party organs during the 2016 campaign goes by the designation assigned to it by cybersecurity firm CrowdStrike: “Fancy Bear.” And the evidence that the network-breakers stole emails from those groups is mostly circumstantial: The emails are from the period when Fancy Bear, which the U.S. intelligence community strongly believes is associated with the Russian GRU military intelligence service, had access to those networks.

As of last week, it looked very much like some of the people who coded the software used in the break-ins themselves were unaware that their code had been used to those ends.

This post has been updated

Read More →

The developers who worked with Donald Trump in the decade before he was elected President form a motley crew. They’re a potpourri of complete novices in the real estate world, white-collar felons and minor officials from unstable governments.

But one thing the richest among them appear to have in common is the source of their wealth: the distressed assets of economies in the former Soviet Union, sometimes purchased at fantastically low prices or, in the case of the financier behind a Georgian tower that never got off the ground, apparently stolen.

Mukhtar Ablyazov

Kazakh banker Mukhtar Ablyazov answers the Associated Press in Paris, Thursday Dec. 15, 2016.  Freshly freed from a French prison after years fighting embezzlement charges,  Ablyazov is pursuing what he calls his “life goal”: regime change in his energy-rich Central Asian country. (AP Photo/Alexander Turnbull)
Kazakh banker Mukhtar Ablyazov answers the Associated Press in Paris, Thursday Dec. 15, 2016. Freshly freed from a French prison after years fighting embezzlement charges, Ablyazov is pursuing what he calls his “life goal”: regime change in his energy-rich Central Asian country. (AP Photo/Alexander Turnbull)

The most recent post-Soviet oligarch to surface in connection with a Trump project is Mukhtar Ablyazov, the chairman of a bank tied to a planned Trump tower in the Republic of Georgia. This week’s New Yorker details the abortive plans for two towers in Georgia, and the involvement of Ablyazov, who apparently acquired his vast fortune by simply taking it from a Kazakh bank that since has been seized by that country’s government.

Ablyazov gained control of B.T.A., the largest bank in Kazakhstan, in the early aughts by taking out billions of dollars in loans through shell companies and then refusing to pay them back, according to Adam Davidson’s meticulous report. He first fled to London, where in 2009 a British court convicted him and sentenced him to prison. He then fled to France, where he is currently fighting extradition. While the British court ordered Ablyazov to repay $4 billion, the Kazakh authorities maintain that he stole $10 billion.

Shortly after his conviction, Ablyazov became involved with the Trumps via Trump Organization executive Michael Cohen. The B.T.A.-controlled Silk Road Group negotiated with Cohen to license the Trump name for a tower in Batumi, a Georgian city on the Black Sea—an unusual move for a company based in Kazakhstan—and suggested that plans for a second tower in the Georgian capital of Tbilisi were underway, as well. The Silk Road Group, like other business Trump has partnered with to develop branded properties, was not primarily a real estate concern: It was a petrochemical shipping business.

Ablyazov’s multi-billion-dollar theft is part of a vast money-laundering probe by Kazakh authorities, in which the Financial Times reported that Trump associate Felix Sater is cooperating. That probe also involves Ablyazov’s son-in-law, Ilyas Khrapunov, who is accused in U.S. lawsuits of laundering money by buying and quickly reselling American luxury condos, including three units in Trump-branded buildings, according to a recent article published by McClatchy.

Alexander Shnaider

Donald Trump (right) and owner Alex Shnaider cut the ceremonial ribbon for the Trump International Hotel in Toronto on Monday April 16, 2012.  (AP Photo/Frank Gunn, Canadian Press)
Donald Trump (right) and owner Alex Shnaider cut the ceremonial ribbon for the Trump International Hotel in Toronto on Monday April 16, 2012. (AP Photo/Frank Gunn, Canadian Press)

Then there is Alexander Shnaider, one of the wealthiest men in Canada who developed what used to be the Trump International Hotel and Tower in Toronto. Shnaider began accumulating his vast wealth in Ukraine shortly after the collapse of the USSR while working for his father-in-law, Boris Birshtein. Birshtein is an associate of notorious Russian mob boss Semion Mogilevich, according to an August 1998 FBI report on Mogilevich’s organization, which says Birshtein hosted a meeting between the monster and his associates in Tel Aviv.

Shnaider’s fortune was planted in Ukrainian steel during the early 1990’s. The nation’s economy was collapsing, and it was still reeling from the 1986 nuclear catastrophe at the Chernobyl plant. The Soviet supply chain for everyday goods had collapsed, so Shnaider used local desperation for goods like microwaves and VCRs to his advantage, trading a $40 microwave for $150 of automaker-ready coil steel, according to a 2005 Forbes profile. One customer of choice was the Zaporizhstal steel mill, of which Shnaider bought a 93 percent ownership stake in 2001 for $70 million.

Four years later, Shnaider was turning down offers for $1.2 billion for the same mill, and he was in the real estate business for the first time in his life: A deal to build the tallest building in Toronto with Trump.

Tevfik Arif

Like Ablyazov and Khrapunov, Tevfik Arif, who founded the frequent Trump partner Bayrock Group, hails from Kazakhstan. The origins of the elusive financier’s personal wealth can be partially deduced from a massive information dump to German newspaper Der Spiegel. Arif, who was once an economist for the USSR Ministry of Commerce and Trade, and his brother, Refik, acquired a chromium plant in Kazakhstan, according to Tokyo-based international publication The Diplomat, which reviewed the files shared with Der Spiegel. When exactly the Arifs acquired and sold off the plant is hard to discern; in 2001, Arif moved part of his business to the U.S. and began to work with Trump. The plant, which was headquartered offshore, and is now owned by a Chinese consortium.

Arif’s company, Bayrock, is among the most notorious examples of former Soviet bloc officials putting personal wealth acquired in the economic collapses across central Asia toward financing Trump hotels and condominiums. The Trump SoHo development, which was troubled almost from the start, was the subject of complaints from private investors who accused Bayrock of failing to disclose the fraud convictions of Arif’s partners, Felix Sater and Sal Lauria, to investors. According to a New York Times article about the development’s legal woes, the project also took “financing from questionable sources in Russia and Kazakhstan.”

The eccentricities of the building’s financial dealings came close to direct criminal investigation by the government, attracting scrutiny from the Manhattan district attorney. But when Trump settled with people who had purchased shares in his property, among the conditions of that settlement was that the investors cease cooperating with the government investigation.

Read More →

A New York Times report out this morning contains a rare glimpse into the workings of a notorious hacking team that’s been chased by an increasingly panicked collection of researchers, journalists and government investigators in recent months: “Fancy Bear,” the collective associated with Russian military intelligence and that U.S. intelligence officials say breached the Democratic National Committee’s servers during the 2016 campaign.

According to the Times, there now appears to be a material witness cooperating with the FBI investigation into election-related hacking—even though it appears that individual learned of his role in Fancy Bear’s operations after the fact.

The first part of the report is a profile of Profexor, the psuedonym for a Ukrainian coder who developed a malware program, called the P.A.S. web shell, that could be used to administer a hacked server, according to cybersecurity expert Mark Maunder. Profexor, whose real identity remains unknown, became so frightened in December after the Department of Homeland Security identified his software as one of the tools used in the DNC hack that he posted to a closed hacker forum that he was “still alive” and eventually turned himself in to Ukrainian police, who then put him in touch with the FBI, according to the Times.

Profexor took P.A.S. off the market and has not been arrested. He appeared to have had no idea his software had been used in the DNC hack, and told Ukrainian authorities he hadn’t made P.A.S. to be used the way it had been, according to the Times.

The reporters on the Times piece, Andrew E. Kramer and Andrew Higginsdrily observe that a terrified hacker throwing himself on the mercy of the Ukrainian cops suggests the popular image of a crack team of dedicated Russian military cyberspies working to overthrow America may be overblown. That had been indeed been the consensus until recently: The “Fancy Bear”-linked GRU was understood to be the organized, professional unit of the Russian security service, while its sister agency, the FSB, was thought to be the more fly-by-night operation that supposedly coerced or blackmailed hackers into doing work for the Kremlin.

Profexor would be the third hacker associated with Russian election-season espionage to express surprise at their own involvement in the scheme. Alisa Shevchenko, whose company the U.S. had sanctioned in connection with election hacking, said on Twitter that her business had been inoperative that year, and that she hadn’t worked with the Russian government “that I know of.” Shevchenko either created or sold another hacking program, called Malwas, that allowed hackers to evade detection by moving from machine to machine within a network, which is similar to a technique used in the DNC hack; she also may have sold “zero-day” hacking tools.

Then there is Vladimir Fomenko, whose hosting company King Servers was associated with possible attacks on Arizona and Illinois voting systems in a report by cybersecurity firm ThreatConnect. Fomenko has angrily denied that he had done anything beyond provide hosting services to an anonymous third party, just like any other internet business.

Reached for comment, Fomenko was annoyed.

“I don’t want to talk about it anymore,” he wrote in an email to TPM. “I gave many comments about this. If you have another questions about IT and safety, I can comment on them. But not on this topic.”

Asked who had hacked the DNC, in his opinion, Fomenko wrote “Do you think I know? No I dont know. Anyone. Who does not love the Hillary.”

Obviously, denials aren’t proof positive of someone’s innocence. But Profexor’s instinct to cooperate with the Ukrainian police, and now the FBI, suggests Russian intelligence may have relied on black market malware and exploits to run its hacking operations, in addition to its own tools. Even if the other hackers weren’t always on the up-and-up, they may be truthful when they say they didn’t have any idea what they were doing. Some of Fancy Bear’s software choices appear to be off-the-shelf malware programs that led forensic investigators not to the perpetrators themselves, but to popular suppliers instead.

Read More →

There are just two real estate developments connected to President Donald Trump that special counsel Robert Mueller has showed a reported interest in so far: there’s the Trump SoHo, of course, subject of pages upon pages of dirt-digging, but there’s also the failed Trump International Hotel and Tower, a boondoggle every bit as embarrassing as the SoHo disaster. The developers of the Toronto project, which was just a licensing deal for Trump, hold close connections to oligarchs in the former Soviet bloc, and the project’s sales structure was a mirror image of the Trump SoHo’s—as are its legal troubles.

What makes the 67-story tower interesting to Mueller, as the Wall Street Journal has reported, is the link between the project and Vnesheconombank, or VEB, the state-owned Russian bank on whose board Vladimir Putin himself sat, and that has been under U.S. sanctions since 2014. And the link between that bank and the Toronto project is Alexander Shnaider, a 49-year-old billionaire commodities trader whose career was initially spent buying “erstwhile state assets in the republics and satellites of the Soviet Union,” to quote a Globe and Mail profile from the year after the Trump Toronto was announced.

Born in what was then Leningrad but raised in Israel and Toronto, Shnaider went to work in the 1990’s for his then-father-in-law, Lithuanian trader Boris Birshtein, one of the first major moneymen to emerge from the wreckage of the USSR. Shnaider, whose worth Forbes pegs at $2.85 billion, abhorred the spotlight at the time, telling Forbes in 2005, “I don’t know if I am ready for all this attention.” By the time the Trump-branded hotel finally opened in 2012 however—two years behind schedule—Shnaider was happy to appear at the ribbon-cutting.

Symon Zucker, Shnaider’s attorney, told TPM that his client has not been contacted by federal investigators looking into some of Trump’s business deals as part of their probe into Russia’s interference in the 2016 election.

Trump was badly in need of new partners by the time Shnaider came along in 2004. The Toronto tower had its initial debut in 2001, with the Ritz-Carlton Hotel Company proclaiming that Trump would join as “co-developer of the Ritz-Carlton hotel and residences.”

The announcement was made in a joint press release between the Ritz-Carlton and The Bowmore Group of Companies. In the first of a more-than-decade-long parade of indignities heaped on the Toronto tower, The Bowmore Group of Companies turned out to be chaired by one Lieb Waldman, who had been convicted of stealing $900,000 in a bankruptcy scam in Pennsylvania and was in Canada avoiding extradition. Ritz-Carlton pulled out of the project.

Trump didn’t waste time: He and Shnaider began ironing out the Toronto project in 2002, and in 2004, Trump re-unveiled the hotel by way of a website praising his own acumen in typically understated terms: “Some dream in black & white. Others never dare. A visionary dreams in bold vivid hues. Donald J. Trump dreams in color.”

Toronto Maple Leafs John-Michael Liles (left to right), owner Alex Shnaider, Toronto Blue Jays J.P. Arencibia and Donald Trump pose with team jerseys at the ceremonial ribbon cutting for the Trump International Hotel in Toronto on Monday April 16, 2012. (AP Photo/Frank Gunn, Canadian Press)

His new partners were both very happy to let him take top billing on the tower, even as they purchased the necessary site for the project for $27.4 million. The two people in charge were Shnaider and another Russian-born man, Val Levitan, the CEO of Talon International Development, which Levitan and Shnaider formed to manage the project. Levitan would later testify that his experience with vending machines made him a competent hotel manager, according to Mitchell Wine, who represents a group of plaintiffs suing Shnaider, Levitan and Trump for misrepresenting the value of apartments in the Toronto tower.

One of the stranger aspects of Trump’s hotel deal in Toronto, and in the SoHo development, was the mixed-use nature of not just the building but the units within it. Briefly, the units were sold as condos with a panoply of exorbitant monthly fees; when the owners weren’t in the units, which they were required to vacate 245 days of the year, they were rented as hotel rooms, with the rental income used to offset the fees. Low room occupancy rates—much lower than advertised to prospective investors—meant the units didn’t just fail to generate revenue, they cost the owners a bundle.

Despite reusing the SoHo template, Trump had no skin in the Toronto game, however colorful his dreams, said Wine, who contended Trump still has “a duty of care” to people who invested in the project on the strength of his reputation.

“What he seems to do in all his projects is he gives you the impression that he’s building the building, it’s all the glitter and glamour and quality of his name,” Wine told TPM. “And then when you read the fine print, he has nothing to do with the building. He’ll come to some of the openings.”

Shnaider’s reputation was much darker. The most interesting acquisition he made during his post-Soviet era of fortune-building was a Ukrainian steel mill: The sale of the mill, Zaporizhstal, after Perestroika was a suspiciously closed-off affair, the Globe and Mail reported—as were the sales of many assets in the bizarre and dangerous world of post-Soviet privatization where the soon-to-be-billionaire thrived. Shnaider sold Zaporizhstal in 2010, but to whom and how, no one appears to be sure; Shnaider hasn’t disclosed the buyer, and Zucker told TPM he doesn’t know who the buyer was.

Shnaider had been due to sell the mill for $1.2 billion to Rinat Akhmetov, the richest man in Ukraine, and a major political player and backer of Putin-supported Ukrainian president Viktor Yanukovych. Akhemtov, in fact, was former Trump campaign chairman Paul Manafort’s first major political employer in Ukraine.

When Shnaider ultimately did sell the mill for a reported $1.7 billion to an unnamed buyer, at least 50 percent of his shares in it were sold through a complex offshore transaction financed by VEB, as detailed in the Panama Papers. An anonymous source told the Russian newspaper Kommersant at the time of the sale that the bidders themselves were Russian. Today, companies owned by Akhmetov hold a controlling interest in the mill.

Zucker told the Wall Street Journal some $15 million from the sale of the mill had been used to cover cost overruns for the Toronto tower; later, he told the newspaper he couldn’t confirm that any money from the sale went toward the project. Zucker took exception to the Journal’s characterization of Shnaider’s financial dealings as suspicious—the deal, he said, was no different than Vnesheconombank financing a mortgage.

“Even if he’d wanted to put it into the Trump hotel, he could have,” Zucker told TPM. “It’s his money!”

Levitan resigned in 2013, after he, Shnaider and Trump started fielding lawsuits from their clients, one of them a class action, that accused them of selling units in the Toronto tower as investment opportunities—something they’d promised they wouldn’t do when they submitted their initial prospectus to Canadian regulators.

The developers then defaulted on a $310 million Austrian bank loan in 2015. Exactly one week before Donald Trump was elected President of the United States, a Canadian bankruptcy judge placed his branded Toronto tower into receivership. The building’s new owners, a holding corporation run by JCF Capital, decided to get rid of the Trump name in June; workers began to remove the signage on what is now the Adelaide Hotel in July.

For the privilege of removing Donald Trump’s name from its facade, the Adelaide paid the Trump Organization at least $6 million.

Read More →

In December 2015, an Associated Press reporter asked Donald Trump why he had appointed Felix Sater, a man who’d been convicted for stock fraud, his senior advisor. “Felix Sater, boy, I have to even think about it,” Trump told the AP. “I’m not that familiar with him.”

The feeling is not mutual.

“My last Moscow deal [for the Trump Organization] was in October of 2015,” Sater recalled. “It didn’t go through because obviously he became President.” Sater had told the New York Times that he was working on the deal that fall, but over the course of several conversations with TPM, he gave a slightly more detailed timeline. “Once the campaign was really going-going, it was obvious there were going to be no deals internationally,” Sater said. “We were still working on it, doing something with it, November-December.”

That deal was for “The Trump Tower, to develop in Moscow.” It was a similar proposition to the one Trump himself tried to broker with the Agalarovs, a family of vastly wealthy Russian oligarchs who brought Miss Universe 2013 to Moscow and were behind the infamous 2016 Trump Tower meeting between the President’s oldest son and an attorney said to work for the Russian government.

Sater said he never worked with the Agalarovs on a Moscow deal for Trump: “I don’t work with them and I’ve never worked with them.” When asked who he was working with, Sater chuckled. “A couple of people I’d like to continue working with, and that’s why I don’t want their names in the newspaper. People say, ‘I care about you and love you but why do I need my name in the press?’”

The Trump Organization did not respond to multiple requests for comment from TPM. But to understand Trump and the type of people his real estate empire did business, it’s worth trying to understand Sater, the Russian-American émigré whose connections span not only the worlds of Russian and Italian organized crime—which Sater said are in part a result of not being able to find legitimate work after two criminal convictions—but the FBI and, now, the presidency.

South Brooklyn tough

Sater is from the Brighton Beach and Coney Island neighborhoods of Brooklyn, an area with large populations of both first-generation Russian-Americans and multigenerational African-American families. It’s a vital part of the $200 million real estate business Trump took over from his father in 1974, which in turn seeded his own wealth. Rather than benefiting from shrewd dealmaking for hotels and casinos, as the President likes to suggest, Trump built his real estate empire on his hereditary residential businesses, accrued by his father through the construction, purchase and management of residential buildings, many of them inhabited by Russian-Americans like Sater.

The Trumps were already notorious: Donald and his father, Fred Trump, allegedly preferred to rent to white families and subsequently found themselves “charged with discrimination” in “a number of local actions against us,” he told the Times in 1973 when he settled discrimination charges in Coney Island, among other areas of the city. Sater would surely have been familiar with the Trumps when, renting an office with his partner Tevfik Arif for their real estate firm Bayrock, he approached Trump personally in “2000, 2001,” by his recollection.

After high school, Sater went to Pace University, at the foot of the Brooklyn Bridge—but now he was on the Manhattan side. When he graduated he worked for prestigious financial outfits like Bear Stearns and Gruntal & Co. In 1991, Sater got into a bar fight with a fellow Wall Streeter that ended with Sater stabbing the other man in the face with a margarita glass. The injured man needed 110 stitches and suffered nerve damage; Sater went to prison for a year, which he described as “the worst time in my life.”

“Yes, I got into a bar fight. Yes, the instance at which I hit the man with the margarita glass…” he broke off. “I didn’t break it and try to carve my initials into his face. It was a bar fight. That’s all it was. I made the mistake of going to court, lost, went to jail over it, got involved in a dirty, scammy Wall Street deal [with former Gruntal colleague Salvatore Lauria]. I did.”

As far as Sater is concerned, he’d done his time. But like most people who have been to prison, his punishment seems not to have ended. “Everybody’s making it sound like I’m Tony Soprano,” he sighed.

Sater and Lauria gained control in 1993 of White Rock Partners, a business that would go on to become intertwined with the Italian mafia because, Sater said, he owed his lawyer: “When I came out, I was released on appeal bond, I couldn’t do anything I needed to pay my lawyer $100,000 to keep me out on appeal.” His only professional skill was bond trading, but he was legally barred from doing that at a legitimate business—so he started another kind of business. “I’m not some poor little lamb,” he admitted.

Indeed not: The firm, which was renamed State Street Capital, would go on to steal some $40 million. Court documents accuse State Street of targeting “little old ladies;” Bloomberg reported in June that a number of the victims were also Holocaust survivors. Sater denied knowing this about the people his firm fleeced.

“I gave them the coordinates”

A strange thing happened after Sater’s second arrest, however: He did not go to prison. Instead, in 1998 he signed an FBI cooperation agreement that was approved by Andrew Weissmann, who is now part of the legal team investigating Russia’s interference in the 2016 election under Special Counsel Robert Mueller. Sater appears to have forfeited not his share of the $40 million, but a $25,000 fine and a house in the Hamptons.

Sater had been in Russia working for AT&T when he heard that the FBI was looking for him, according to a heavily redacted court transcript—which refers to Sater as “Felix Slater”— obtained by legal reporter Daniel Wise. No one had been prosecuted in the State Street scam by 1998, but with Sater’s help 20 people “at various levels of that operation, ranging from the brokers to the people who were transferring money” were prosecuted, according to the documents. The government described Sater’s cooperation as “exemplary.”

The FBI’s glowing testimonial isn’t a patch on claims made by Lauria in his book, which he later disavowed as a work of fiction. Lauria and co-writer David S. Barry wrote that Sater had tried and failed to purchase black-market Stinger missiles in Afghanistan.

Sater makes impressive claims, too: TPM asked him if he’d returned his share of the State Street money. He said, “Because of national security issues I can’t discuss anything other than one part of it: You understand that I was given a $25,000 fine, and it’s not because of Vinnie Boombatz from Brooklyn?”

Attorney General Loretta Lynch, Sater noted, had publicly defended him in her confirmation hearing, and she had used the phrase “national security.”

“When she was talking about national security, she wasn’t talking about Stinger missiles,” he said. “She was talking about our country’s biggest enemy who killed over 3,000 people. How ‘bout the first time Bill Clinton bombed his camps, I provided the coordinates?”

Sater appeared to be referring to Operation Infinite Reach, a cruise missile launch based on CIA intelligence against Osama bin Laden’s camps in Afghanistan—where Sater had sought the missiles—and Sudan. Sater wouldn’t say more.

Sater told the Los Angeles Times he spent the late ’90’s “hunting bin Laden”; the Stinger missile episode was also attributed to the CIA in Lauria’s book. The CIA declined comment, but a source familiar with the intelligence community’s use of civilian assets told TPM that claim is wildly unlikely: Anyone considered for work directly with the CIA would almost certainly be immediately be disqualified by the criminal record Sater deplores and has tried to escape.

It’s theoretically possible for Sater to have provided information that was communicated to the CIA by the FBI, the source said. It’s even possible that the information was correct: The August 20, 1998  Al Qaeda meeting was “not much of a secret,” Steve Coll writes in his book about the CIA in Afghanistan, “Ghost Wars.” But if Sater told the agency more, the fact that it came through the FBI and not the CIA’s own sources might have limited its use within the intelligence community. The FBI’s national press office declined to comment to TPM.

“The biggest, scummiest gangster”

Sater’s two arrests often have been presented as exhibit A in the case against the President’s 15-year association with the man, but Trump has been defensive of the relationship even while distancing himself from it.

When pressed in 2013 by the BBC’s John Sweeney about whether he should have cut ties with Bayrock because of its association with Sater, Trump told Sweeney, “John, maybe you’re thick but when you have a signed contract, you can’t in this country just break it.” He added, “Sometimes we’ll sign a deal and the partner isn’t as good as we’d like.” In a deposition that same year, Trump denied knowing what Sater looked like.

That halfhearted defense is more than Sater usually gets. Like many ex-cons, he is understanding of people who pretend not to know him: He said his involvement in Bayrock was kept secret because of his “bad past.”

The Bayrock Group is the subject of much legal scrutiny. One suit filed by Bayrock’s former CFO Jody Kriss flatly describes Bayrock as a money laundering operation; it also alleges that the firm defrauded investors by not revealing Sater’s felony convictions. That’s what eats at Sater. He doesn’t understand why the past can’t be past. Re-opening those wounds, he said, is the worst sin of all. “The biggest, scummiest gangster I’ve met is Jody Kriss,” he told TPM on several occasions. Kriss, he said, wanted to out him for testifying against mobsters.

Kriss is frank: “Felix Sater is a fucking liar,” he told TPM. “You can’t believe anything he says.”

Sater’s way of thanking people who have helped him is not to tell reporters their names. He told TPM a mentor had helped him find work in real estate, outside the Wall Street world where he’d been barred from working. Like his Russian connections, Sater wouldn’t name this man, who he described as “a serious real estate guy.”

“He doesn’t need my name; he helps me. The last thing he needs is [to be tarred with] my brush,” Sater said. “He liked me, he loved me, he taught me the business.”

The other serious real estate guy in his Rolodex—the President—has gone from being his employer to being the most powerful man in the world. Sater has approached the Trump administration since the election, but that has been through Michael Cohen, another man with deep ties to the former Soviet bloc and New York real estate, who Sater has known since the pair’s teenage years. 

What’s it like to know the President personally? “That and a token will get me a ride on the subway,” Sater said ruefully. “If it was in Russia, he’d give me a billion dollar contract and I’d be wealthy.”

Read More →

When a former business partner of President Donald Trump’s and a Ukrainian politician approached an ally of the administration with a “peace plan,” they were already at work on an energy trading deal. That deal, said one of the region’s leading energy policy experts, stood to benefit from the scheme the pair proposed to resolve the ongoing conflict in Ukraine.

Felix Sater, who worked obtaining financing for Trump projects including the Trump SoHo, told TPM that the “peace plan” came up in the course of his attempts to broker an agreement to sell energy abroad from Ukraine’s nuclear power plants with Andrii Artemenko, at the time a Ukrainian parliamentarian. The plan was to refurbish dilapidated nuclear power plants in that country and then sell the power generated by them into Eastern Europe, using established commodities trading companies as a means of retroactively financing the deal, Sater said.

The business proposition would help break the Russian monopoly on energy, according to Sater. But Artemenko’s political proposal would have had Ukrainian voters decide whether to lease Crimea to Russia for 50 or 100 years—an idea encouraged by advisors to Russian president Vladimir Putin, and so offensive to his country’s government that Ukrainian prosecutors accused Artemenko of treasonous conspiring with Russia after the peace plan was first reported earlier this year.

It’s been widely reported that Sater and Artemenko met with Michael Cohen, who was then Trump’s personal lawyer and who has known Sater since he was a teenager, in January; under discussion was the peace plan, which would have paved a path for the U.S. to lift sanctions on Russia. Cohen has given conflicting statements about his involvement. Sater said he came to be involved in the scheme through Artemenko.

“We were trying to do a business deal at the same time,” Sater told TPM. “We were working on a business deal for about five months, and he kept telling me about the peace deal, and as the Trump administration won, that’s when I delivered it [the peace deal] to them.”

He insisted the political and business propositions were unrelated, other than each involving himself and Artemenko as primary players.

Sater had worked brokering major deals internationally for some time after the 1996 dissolution of White Rock, a firm at the center of a pump-and-dump securities fraud scandal that led to Sater’s conviction for fraud. Instead of going to prison, Sater paid a fine and went to work as an FBI informant. Those deals included a job for AT&T in Russia, as previously reported by Mother Jones, where Sater says the company was “trying to expand.”

Sater said the business proposition with Artemenko “was to try to rehabilitate the existing nuclear power plants in the Ukraine and build new ones using either U.S. or Canadian [companies] like GE, or the Koreans.” Ukraine’s history with nuclear power includes the Chernobyl disaster, and Sater noted that the aging plants needed refurbishment in order to continue working without another incident. Otherwise, he noted, “they’re ready to [have] another Chernobyl any day now.”

The pair further planned “to sell the excess power to [international energy companies] Trafigura or Vitol to sell the power to Eastern Europe, and in that way finance the plants,” Sater explained. He named Poland and Belarus as two potential state clients.

“It was a way to break the energy monopoly the Russians have,” he said.

Chi Kong Chyong, director of the Energy Policy Forum at Cambridge University’s Energy Policy Research Group, told TPM that energy independence from Russia was indeed a pressing issue in Ukraine, and noted a peace deal would ease the kind of international transaction Sater and Artemenko were proposing.

Sources close to the matter told TPM that there were no records of any current conversations between Sater or Artemenko and American industrial conglomerate GE. Trafigura and Vitol are trading houses that deal heavily in energy; Victoria Dix, a spokeswoman for Trafigura, said there was “no element of truth whatsoever” to any suggestion that Sater was pursuing a proposal with the company. Andrea Schlaepfer, a spokeswoman for Vitol, said, “We don’t comment on commercial activities.” Neither the Ukrainian Embassy nor the Consulate immediately responded to requests for comment.

Artemenko responded “Maybe later” when asked to comment generally on this story through Facebook Messenger. He did not respond to specific follow-up questions.

For Artemenko, the fallout from the January meeting with Sater and Cohen was immediate and severe. He was expelled from his Verkhovna Rada political party the day after the New York Times reported the meeting, and by May, Ukrainian President Petro Poroshenko had stripped him of his citizenship.

For his part, Sater said he had nothing to do with the documents filled with damaging information on Ukrainian politicians, including Poroshenko, that Artemenko reportedly brought to the January meeting. “I never saw them,” Sater said, adding that Cohen might have thrown them in trash but he wasn’t sure. “I don’t want to get into it.”

Whether Sater and Artemenko’s energy trading plan was well underway or simply in the proposal stage by the time of the meeting, it would have been an easier sell with Artemenko’s Putin-approved ceasefire in place, according to Chyong.

“Any military conflict in your neighborhood or close to you affects the transaction cost of arranging commercial deals, whether that is between Ukraine and the eastern [EU, where Poland lies] or Ukraine and Belarus, for example,” Chyong said. “It increases the transactional costs. The conflict itself, of course, forces the Ukraine to think about other ways and other sources of importation of energy—gas and electricity trading.”

Exporting energy from Ukraine would be easiest to places like Belarus and Russia, Chyong noted. Old electrical grids are among the strongest remaining ties between former Soviet bloc states and Russia itself; Ukraine hopes to break them by 2025, something Sater said he hoped he could help along.

Sater insisted his motivations in bringing the proposal to the Trump administration via his longtime acquaintance Cohen were altruistic.

“People are getting killed. They’re dying,” he said. “I didn’t see anything wrong with trying to do something that could help all sides.”

Read More →

Two very different men have been instrumental in introducing financiers and clients from Russia and the former Soviet bloc to the Trump Organization’s real estate machine: Felix Sater, Donald Trump’s former business partner and a convicted felon, and Michael Cohen, Trump’s brash, longtime personal attorney.

And TPM now has learned from conversations with both Sater and Cohen that the two men know each other dating back to their teenage years, when they were acquaintances from nearby towns on Long Island. Both went on to make their fortunes in real estate, eventually working with the same big-name businessman—although they insist that neither helped the other land his gig with the Trump Organization.

“It isn’t a family atmosphere kind of thing,” Sater said of the several years he told TPM he worked directly for Trump scouting deals, some as far afield as Moscow. “You sort of ran around and did your own deals.”

The two men say they arrived in business with Trump through different avenues. While Cohen declined to speak broadly about Sater, he agreed to confirm or deny some of Sater’s statements and add slightly to Sater’s explanation of how the two men entered the Trump orbit independently of each other.

“The family knew about me because I purchased several Trump apartments over the years and Don, Jr. had sold me multiple apartments at one of the properties and was combining them [into a single deal] for me,” Cohen explained.

Sater’s tale is a little more dramatic and harder to confirm in its particulars. In his telling, he began working with one of his neighbors, a Kazakh real estate developer named Tevfik Arif, at a new firm called Bayrock, the offices of which were downstairs from the Trumps. That’s how Sater said he landed a meeting with Trump.

“I walked in and knocked on his door and told him I was going to be the biggest developer—this is 2000, 2001—first in the United States and then worldwide,” Sater said of the President. His braggadocio paid off, he said: “We got along very, very well.”

But the Russian money didn’t begin to flow immediately. “There were no Russian investors at that point,” he told TPM. “1998, ’99, 2000—Russians did not have any money.” The reason, Sater said with a laugh: “$8-a-barrel oil!”

He pegged the date to when Russians finally had money to spend abroad around 2005, the same year Bayrock signed a one-year deal to explore developing a Trump Tower in Moscow. The group even proposed the site of an old pencil factory for the building, but the deal never closed.

Long before they were seeking such deals, Cohen and Sater were running in the same circles, in the area where Brooklyn bleeds into Long Island. Cohen is from Five Towns, the informal name for a few tony suburban hamlets—more than five, less than eight—in Nassau County, east of Jamaica Bay. Sater hails from the less genteel Brooklyn neighborhoods of Brighton Beach and Coney Island, west of the bay.

“It was an emigrant enclave of Jews from the former Soviet Union,” Sater recalled. “Coney Island was kind of tough. I was one of the white kids on the block, which led to lots of beatings. It was difficult growing up but it toughens you up.”

His toughness didn’t always serve him well. A bar fight with a fellow Wall Streeter ended when Sater stabbed the other man in the face with a margarita glass; the injured man needed 110 stitches and suffered nerve damage. Sater went to prison for a year, which he describes as “the worst time in my life,” and a few years after his release, he became embroiled in a stock fraud scam.

Sater said he most clearly remembers the beginning of his relationship with Cohen from the time the former Trump Organization attorney began dating his now-wife, whom Sater describes as a girl from his neighborhood of Jewish Soviet expatriates. Cohen told TPM the pair had known each other before then, in their teenage years, and that he hadn’t yet begun dating his wife, reportedly a Ukrainian émigré, when he was in his teens.

“He wasn’t one of my close friends, just a guy dating a girl in the neighborhood and we had a bunch of mutual friends,” Sater said. “We eventually both started working at Trump Org. Prior to that, again, lots of mutual acquaintances.”

Sater said he and Cohen still speak to each other, even if they seem a bit loath to speak about each other.

“We did not own real estate together, but certainly looked at a bunch of stuff together, during Trump and post-Trump,” Sater says. “After I left there, I was still looking at deals for Trump, but I would think about real estate with Michael. [It] was just two real estate guys talking.” Sater starts to say something more, but cuts himself off and ends almost bashfully: “I would be more than happy to do a deal with Michael,” he says.

Cohen was less forthcoming than his acquaintance. “I don’t give profile pieces on people,” he told TPM when asked about Sater. When asked why not, he answered, “I just don’t want to.”

Still, the two men appear to know each other well enough for there to be considerable trust. They were both involved in a scheme to deliver a “peace plan” to the White House that proposed letting Ukrainian voters decide whether to lease Crimea to Russia in hopes that the move would lead to the relaxation of international sanctions.

Sater told TPM he called the now-notorious meeting with Cohen and Ukrainian politician Andrii Artemenko in February to discuss the future of Ukraine. Cohen took the meeting, and told the New York Times that he ultimately left the proposal on the desk of then-National Security Adviser Michael Flynn (Cohen would later give several contradictory interviews in which he walked back his involvement).

Nothing ever came of the plan, but it caused outcry from all corners of the diplomatic world—who were these men, and what were they doing?

Asked why he arranged the meeting, Sater told TPM “Because I could!” Trump had distanced himself from Sater—in a 2013 deposition, he claimed not to know what Sater looked like—but he had Cohen’s ear, and the issue at hand pertained to a region of the world of interest to both men.

In conversation, Sater framed his pursuit of the deal as deep concern for the region of his birth. “Everyone in the proposal, all three sides would have won,” he said. “As a side note, some civilians wouldn’t have been killed and shelled. In hindsight, I’m glad I did it. Anybody can paint it any way they want, but it was a peace deal.”

Read More →

Natalia Veselnitskaya, the Russian lawyer who met Donald Trump, Jr. in June 2016 to discuss damaging information on Hillary Clinton as part of a Russian government campaign of support for his father’s presidential bid, represented the Russian FSB security service in a lawsuit with the Russian government, Reuters reported Friday.

Reuters says there is no evidence currently connecting Veselnitskaya to the FSB, however. Veselnitskaya did not respond to the news agency’s request for comment.

According to Russian court records, Veselnitskaya’s firm, Kamerton Consulting, represented the defense in what Reuters described as “a legal wrangle over ownership of an upscale property in northwest Moscow.” The news agency said Kamerton’s client, “military unit 55002,” was founded by the FSB, the successor agency to the KGB, and was physically located behind the FSB’s own headquarters.

The lawsuit dragged on for eight years: The FSB claimed the property, which was originally government-owned, had been illegally sold to private firms despite having been privatized in 1991 after the collapse of the Soviet Union.

To those who have followed the Russian art world in recent years, “Military unit 55022” is a familiar designation for the Russian government intelligence agency. In 2015, Russian performance artist Pyotr Pavlensky set fire to the door of the Lubyanka, the popular name for the FSB’s headquarters, in an effort to draw attention to the spy agency’s activities. The entity that took him to court for damages was designated “military unit 55022.”

Read More →

LiveWire