Federal Judge Advances Lawsuit Accusing Felix Sater of Laundering Loot Through Trump Properties

Federal Judge Advances Lawsuit Accusing Felix Sater of Laundering Loot Through Trump Properties

Adam Klasfeld, Law and Crime, Nov 30th, 2020,

Felix Sater, for­mer busi­ness asso­ciate of U.S. President Donald Trump, arrives for tes­ti­mo­ny before the House Select Intelligence Committee July 9, 2019 in Washington, DC. Sater was the chief nego­tia­tor in the unsuc­cess­ful effort to build a Trump Tower in Moscow.

A fed­er­al judge on Monday par­tial­ly advanced a law­suit accus­ing Russian mafia-tied busi­ness­man Felix Sater of laun­der­ing mil­lions stolen from Kazakhstan’s BTA Bank through Trump Organization properties.

In this case, Kazakhstan’s largest city and a Kazakhstani bank seek to recov­er mil­lions of dol­lars in stolen funds from those who alleged­ly helped the cul­prits laun­der them,” U.S. District Judge Alison Nathan sum­ma­rized in a 25-page opin­ion dis­miss­ing only two counts of a five-count com­plaint. “Felix Sater—the alleged ring­leader of the mon­ey-laun­der­ing operation—along with his asso­ciate Daniel Ridloff and sev­er­al busi­ness enti­ties they con­trol, move to dismiss.”

Like Sater, Ridloff was also for­mer­ly asso­ci­at­ed with the Trump Organization. The law­suit stems from alle­ga­tions of the sys­tem­at­ic loot­ing of Kazakhstan’s largest city Almaty and its bank in 2009.

The Court empha­sizes that the Kazakh enti­ties will need to adduce evi­dence show­ing the Sater defen­dants’ decep­tive con­duct and their jus­ti­fi­able reliance on that con­duct in sig­nif­i­cant­ly greater detail to meet their bur­dens of pro­duc­tion and of proof as the case pro­gress­es,” Nathan wrote. “However, at this stage, the Court con­cludes that it is not clear on the face of the com­plaint that their claims are untime­ly, and so declines to dis­miss any claims on that basis.”

Almaty’s attor­ney Matthew Schwartz, from the firm Boies Schiller Flexner LLP, expressed his grat­i­tude to the judge for today’s ruling.

BTA Bank and the City of Almaty are com­mit­ted to hold­ing Mukhtar Ablyazov and his co-con­spir­a­tors respon­si­ble for the theft and laun­der­ing of bil­lions of dol­lars, and look for­ward to prov­ing their case before a jury of New Yorkers,” Schwartz said.

Sater’s coun­sel Jill Levi, from the firm Todd & Levi, LLP, empha­sized that the rul­ing itself does not con­tain explic­it ref­er­ences to Trump properties.

We also believe that the remain­ing claims are tee­ter­ing on dis­missal based upon, among oth­er things, good statute of lim­i­ta­tions defens­es,” Levi told Law&Crime in an email.

Levi also not­ed that the judge called the alle­ga­tions of decep­tive con­duct “thin.”

The law­suit that the rul­ing advances, how­ev­er, accus­es Sater of help­ing the Almaty mayor’s son Ilyas Khrapunov laun­der stolen funds in at least five schemes through­out the United States, includ­ing through Trump Soho.

Sater not only met with Ilyas Khrapunov in Trump Tower to dis­cuss laun­der­ing the stolen funds, but he also per­son­al­ly arranged meet­ings between Ilyas and Donald J. Trump to dis­cuss pos­si­ble invest­ments,” the first amend­ed com­plaint against Sater states.

According to the law­suit, there was also a pro­pos­al to fun­nel mon­ey through Trump Tower Moscow, before that plan fell apart around the time of the 2016 pres­i­den­tial election.

Among oth­er pro­posed invest­ments, Sater con­spired with Ilyas to invest the stolen funds to devel­op a Trump Tower project in Russia, which Sater has claimed would have been a ‘high-rise, high-end devel­op­ment that could make a sig­nif­i­cant amount of mon­ey,’” the law­suit states.

The plain­tiffs do not accuse Trump of wrongdoing.

The know­ing receipt of stolen funds in fur­ther­ance of a mon­ey-laun­der­ing scheme, in the cir­cum­stances of this case, amounts to a suf­fi­cient­ly close con­nec­tion to sup­port a claim for unjust enrich­ment,” the rul­ing states. “The Court there­fore con­cludes that the Kazakh enti­ties have stat­ed such a claim.”

Judge Nathan dis­missed two counts of fraud and unlaw­ful means con­spir­a­cy, but not oth­ers alleg­ing unjust enrich­ment, con­ver­sion and mon­ey had and received.

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