Eurasian Organized Crime, Trump Real Estate Projects, and the Strange Story of Felix Sater
This article covers Donald Trump’s relationship with mysterious figures from the former Soviet Union and corruption related to various Trump Organization real estate developments. It is the sixth entry in the series “Donald Trump, Corruption, and the Insidious Influence of Organized Crime.” While it is not necessary to read the earlier entries, it is recommended.
The first article examined Donald Trump’s early real estate career in Manhattan and his involvement in civic corruption and with organized crime.
The second article covered Trump’s connections to organized crime and civic corruption as a casino magnate in Atlantic City.
The third article dealt with the death of Trump’s mentor Roy Cohn, Trump’s purchase of Resorts International, and his financial downfall.
The fourth article covered Trump’s early links with Eurasian Organized Crime in New York and Atlantic City.
The fifth article examined Donald Trump’s second visit to Moscow in 1996 and Russian investments in Trump Organization real estate developments.
This article is an excerpt from my book, While We Slept: Vladimir Putin, Donald Trump, and the Corruption of American Democracy, available here.
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In the early 2000s, Trump was introduced to a development company called Bayrock by Tamir Sapir. As revealed in recently declassified documents, in the late 90s the FBI believed that Sapir operated as a front for Russian organized crime.
Since his early partnership with Sam Kislin at the Joy-Lud Electronics store, Sapir become a billionaire after investing the money he had earned from trading fertilizer and oil between the US and Soviet Union into New York real estate.
Sapir was awarded the oil export contract by Shalva Tchigirinsky, who had gained partial ownership of a Moscow oil refinery through his relationship with Mayor Luzhkov.
As related in an earlier article, both Sapir and Kislin are alleged to have had a close relationship with major figures in Eurasian organized crime syndicates. Investigative journalists Craig Unger and Catherine Belton were told that Kislin had also been involved with Russian intelligence.
Donald Trump met and befriended Kislin and Sapir in the late 1970s after purchasing televisions at Joy-Lud for his first Manhattan development, the Grand Hyatt hotel. He subsequently met their allegedly organized crime-linked associate Shalva Tchigirinsky in Atlantic City in the mid-1980s.
Since their first meeting in Atlantic City, Tchigirinsky had remained close to Trump’s orbit, befriending Sotheby’s owner Alfred Taubman, who was later convicted in a price-fixing scheme, and his son-in-law Louis Dubin, who was close to Trump. Tchigirinsky even hired Louise Sunshine, a former executive vice president at the Trump Organization.
Tchigirinsky claims that he once almost purchased Mar-a-Lago, but was talked out of it by Taubman who complained about low flying aircraft. Tchigirinsky also socialized with the casino magnate Steve Wynn, a longtime Trump friend and rival.
Bayrock, which partnered with Trump on several aborted projects before collaborating on Trump Tower Soho, was founded by Tevfik Arif.
A Kazakh-born ethnic Turk, Arif used to work at the USSR’S Commerce and Trade Ministry, led at the time by a KGB lieutenant general and was systematically engaged in espionage against the West.
According to the Russian press, Arif had been involved with gangsters in the Uzbek capital Tashkent, specifically Mikhail Chernoy and Alimzhan Tokhtakhounov, the latter a high level associate of Mogilevich and Ivankov.
In 1993, Arif served as the Kazakh “agent on the ground” for the Trans World Group, which had attempted to corner the Russian aluminum market in the early-90s and was jointly operated by British-based metals traders the Reuben brothers and Mikhail and his brother Lev Chernoy.
The Chernoys and the Reubens both also worked with the Russian oligarch Oleg Deripaska, who played an important role in the effort to interfere in the American election in 2016.
Read my examination of Deripaska’s, the Chernoys and the Reubens involvement in the violent privatization of the Russian aluminum industry here.
In 2001, after a brief stint in Turkey, Arif established the real estate firm Bayrock and hired a man by the name of Felix Sater.
Born in Moscow in 1966, Sater immigrated to Brighton Beach via Israel with his family at the age of seven in the first wave of 70s Jewish émigrés to flee the Soviet Union. His father, Michael Sheferofsky, was a Brooklyn-based Russian mafiosi who ran protection rackets and collaborated with the Genovese crime family.
During his childhood, Sater befriended a Ukrainian-American girl named Laura Shusterman, who would later marry Trump’s personal attorney Michael Cohen.
Cohen had met Shusterman through a mutual acquaintance, the daughter of the powerful Brooklyn-based Russian mobster Marat Balagula.
Throughout the 1980s and 90s, Eurasian organized crime in the United States forged alliances with the Italian-American Mafia, including the Five Families in New York.
Its tendrils spread into white collar crime, fuel tax scams, Medicare fraud, infiltration the diamond market, Wall Street pump-and-dump stock scams and sophisticated commodity-trading schemes.
Sater’s father Sheferovsky was arrested in 2000 and, in a remarkably similar circumstance to what would later happen to his son, struck a deal with the Brooklyn prosecutor Loretta Lynch. Lynch later served as Barack Obama’s Attorney General.
Sheferovksy spent six years assisting the FBI with organized crime cases.
While it is undisputed that Sheferovsky was affiliated with the Brighton Beach, Brooklyn-based Russian mafia, there has been a great deal of debate over whether he worked for Semyon Mogilevich or not.
The claim that he did so is based upon a Supreme Court petition for a writ of certiorari in Palmer v John Doe 14–676, which described Sheferovsky as “a Mogilevich crime syndicate boss.”
When the journalist Seth Hettena questioned the attorney who authored the writ about the provenance of this information, he learned that it had come from the website Deep Capture.
The conspiratorial site was funded by Patrick Byrne, the founder and chief executive of Overstock.com who at one point was in a romantic relationship with the convicted Russian agent Maria Butina.
Ironically, Byrne would also become a key figure in promoting the false idea that the 2020 election had been rigged against Trump.
This admission was enough to make Hettena doubt Sater’s connection to Mogilevich.
Catherine Belton, on the other hand, spoke with two “former Mogilevich associates” who told her that Sheferovsky had in fact been an “enforcer” for Mogilevich’s interests in Brighton Beach.
British journalist Paul Wood also told Seth Hettena that he had learned from someone within the Mogilevich organization that there was a connection between Sater himself and Mogilevich.
A former colleague of Mogilevich, Dietmar Clodo, told the Russian independent publication The Insider that Sater was friends with Mogilevich, Sergei Mikhailov, and Vyacheslav Ivankov, and even served as shamash (Hebrew for “helper” or “assistant”) to Mogilevich when he visited the United States.
After graduating college, Sater’s career on Wall Street was cut short when on October 1st, 1991, he stabbed a commodities broker in the face with the stem of a margarita glass during a barroom brawl.
After leaving prison in 1995, Sater became involved with a $40 million pump-and-dump stock scheme operated by a firm called White Rock that involved four of New York’s Five Families.
Some of the brokerages involved had been investigated for their connections to the Bank of New York scandal, which involved Mogilevich. The money earned from all this illegal activity was then laundered through New York’s Diamond District.
The White Rock scam was interrupted when the FBI came across a storage locker Sater kept that contained a 12-gauge shotgun, two Tec-9 assault pistols and financial documents showing Sater had set up an sophisticated offshore money laundering operation.
By the time Federal authorities sought him out, Sater had fled to Russia.
According to Sater, he went to Russia as a consultant for AT&T as it negotiated a $100 million deal to rent a transatlantic cable to the US.
In this capacity, he claims that he met with high level Russian military intelligence officers.
In one version of events, Sater was sitting down for dinner with his Russian intelligence contacts when he was noticed by an American defense contractor named Milton Blane, who was impressed enough by Sater’s contacts that he recruited him to provide information for US intelligence. Sater claims he leapt at the opportunity.
The information Sater provided the US intelligence community and the FBI was remarkable.
Using his Russian intelligence contacts, he gained access to a facility that stored a Russian anti-missile system and provided information on it to US intelligence. He helped the CIA track down a number of stinger anti-aircraft missiles that it had provided to the anti-Soviet mujahideen but had subsequently lost track of.
Upon returning to the US to face the consequences of his illegal stock market activities, he provided the FBI with a piece of paper that contained five satellite phone numbers associated with Osama Bin Laden.
Following the September 11th terrorist attacks, Sater used connections with Taliban leader Mullah Omar’s personal assistant to identify several al Qaeda money launderers.
He also posed as a money launderer and on behalf of the FBI traveled to Cyprus and Turkey to infiltrate two international criminal syndicates.
Sater also provided information to the FBI regarding the American and Eurasian mafia’s infiltration of financial and securities markets. Like his father, Sater’s case was overseen by Loretta Lynch.
His FBI handler, Leo Taddeo, told a judge that Sater played a key role in taking down Frank Coppa, a Bonnano family capo who worked with other American and Eurasian mobsters to set up a stock pump and dump scam. In 2000, the FBI convicted 19 individuals in connection with the scheme.
Around this time, the FBI grew increasingly alarmed by attempts out of Russia to infiltrate the global financial system.
During Congressional testimony, the head of the FBI’s organized crime section Thomas Fuentes described the criminals the FBI was most worried about as “a group of individuals who are three or four levels above the street thug level.”
“So while we have Eurasian and Russian organized crime groups involved in street level racketeering, traditional racketeering acts of loan sharking, gambling and prostitution, we have another group of international criminals who are generally sitting outside the United States and penetrating the global financial network from afar; and that includes banking, as well as the securities industry…”
“These are the individuals that are the greatest threat, as we see it,” Fuentes continued. “They were the most difficult — they are very sophisticated. They are using multinational companies. In some of our cases, we are talking about investigations going on right now in a single case involving a single group in 35 countries.”
According to Catherine Belton, Sater’s connections in organized crime, including Semyon Mogilevich, who is known to cooperate with Russia’s foreign intelligence agency, connected him to Russian military intelligence.
For many years, Eurasian organized crime figures in Brighton Beach had agreed to serve as informants to the FBI in return for having charges against them dropped.
Mogilevich himself once offered to provide information to the FBI in order to avoid being indicted but was turned down on suspicions that he was only doing so to manipulate American authorities to his own benefit.
Yuri Shvets told Belton that Russian military intelligence likely funneled information through their “asset” Sater in order to increase his “standing and influence” with the FBI.
Comparisons have been made to FBI’s experience with their mobster-informant Whitey Bulger, who implicated his FBI handler in crimes and used his relationship with the Feds for his own criminal purposes.
Shvets believes that Sater’s information came from an alliance between Mogilevich and Shabtai Kalmonovich, the Soviet born Lithuanian-Israeli with connections to the Solntsevskaya who was arrested by Israeli officials in 1988 for being a KGB spy.
After his release and return to Russia, Kalmonovich and Mogilevich operated a global arms sales and smuggling business that provided weapons to all sides of the civil war in Afghanistan that followed the Soviet pull-out, including to the Taliban and their enemies the Northern Alliance.
Mogilevich and Kalmonovich performed tasks for Russian intelligence. A former Mogilevich associate told Belton that the information regarding Bin Laden’s phone number’s and the stinger missiles would likely have come from Mogilevich.
The assassinated FSB defector Alexander Litvinenko accused Mogilevich of selling weapons to al Qaeda, and claimed the FSB had a relationship with al Qaeda as well as to Islamist rebels in Chechnya, though these claims remain unsubstantiated.
Litvinenko was poisoned with radioactive polonium.
Contemporaneous with being an informant for US law enforcement and intelligence, Sater became a managing director at Bayrock, which had an office in Trump Tower.
In 2002, he met and began working with Donald Trump. In 2005, Trump signed an agreement that provided Bayrock with exclusive rights to represent the Trump Organization in Russia.
Sater initially identified the Sacco & Vanzetti pencil factory located on Kutuzovsky Prospekt as a potential location for a Trump Tower Moscow. However, the deal fell through after a biography of Trump by Timothy O’Brien alleged that he had massively overinflated his net worth.
Despite the setback, Trump trusted Sater enough to have him accompany Ivanka and Trump Jr. on a 2006 trip to Moscow. Sater took the Trump children on a tour of the Kremlin and arranged for Ivanka to sit in Putin’s private chair in his Kremlin office.
Donald Trump Jr. in Moscow and Trump Tower Soho Project
Out of everyone in the Trump family, no one traveled to Moscow as frequently as Donald Trump Jr. After his tour of the Kremlin with Sater and his sister Ivanka, Don Jr. returned to Moscow at least six times.
At a 2008 real estate conference in Moscow, he was quoted as saying, “We see a lot of money pouring in from Russia.”
At another real estate conference that year in New York, Don Jr. said, “In terms of high-end product influx into the US, Russians make up a pretty disproportionate cross-section of a lot of our assets.”
Meanwhile, Trump continued to pursue licencing and branding agreements as opposed to owning building outright. One notable project was the hotel-condo hybrid project the Trump Tower Soho, which Trump introduced to great fanfare during an episode of the apprentice.
The Trump Organization partnered on the project with Felix Sater and Tevfik Arif’s real estate firm Bayrock.
While Bayrock licensed Trump’s name to promote its developments, financing came from elsewhere. According to its promotional literature, one investor was a billionaire from Kyrgyzstan named Alexander Mashkevich (AKA “Sasha” Machkevitch).
Alongside Patokh Chodiev and Alijan Ibragimov, Mashkevich is part of the so-called “Oligarch Trio” that owns Eurasian Natural Resources Corporation (ENCR), a multibillion dollar Kazakh metals and energy giant.
Mashkevich and Chodiev met in Belgium while working for Seabeco, a company established for KGB money laundering purposes that employed KGB Colonel Leonid Vesolovsky, infamous for having set up KGB front companies the world over.
Read my article about the KGB’s laundering of billions of dollars of Communist Party money out of the Soviet Union before its collapse here.
Belgian authorities accused the “oligarch trio” of engaging in a $55 million money laundering scheme but the case was settled.
Seabeco’s founder, Boris Birshtein, was a business partner of Solntsevskaya boss Sergei Mikhailov, and hosted Mikhailov, Semyon Mogilevich, Grigori Luchansky, Vadim Rabinovich and others at the 1995 Tel Aviv summit.
The “Trio” has done business with the Reuben Brothers and the Izmailovskaya-connected Chernoy brothers, and Mashkevich is a known associate of Mogilevich.
In 2005, Mashkevich and Tamir Sapir, who knew Trump from his Joy-Lud days, arrived in Antalya, Turkey on their super yachts for Tevfik Arif’s 52nd birthday party.
The opulent event was attended by Turkey’s future authoritarian President Recep Tayyip Erdoğan.
Trump called into the party via videoconference and proposed a birthday toast to his “friend” Arif.
Five years later, Mashkevich and Arif were arrested on a yacht off the shore of Turkey for engaging in an orgy that allegedly included underage girls. The charges against them, which included human trafficking, were eventually dropped.
The Trump Organization and Bayrock partnered on the Trump Soho project with the Sapir Organization, and Trump received an 18% equity stake and ongoing management fees.
Much of the funding for the project came from the FL Group, an Icelandic investment bank that plowed $50 million into Bayrock in an arrangement mid-wifed by Sater.
Jody Kriss, a former employee of Bayrock who was involved in a lawsuit against Bayrock, claimed that Bayrock was a criminal enterprise and claimed that Sater had told him that the money behind FL was mostly Russian and that the firm was close to Putin. Kriss’s suit was settled out of court in 2018.
As of this writing, lawyers for Kazakhstan’s largest city Almaty and BTA Bank allege that a Kazahk billionaire Mukhtar Ablyazov and former Kazakh Energy Minister and ex-mayor of Almaty Viktor Khrapunov, who are related by the marriage of their children, stole hundreds of millions of dollars and laundered it through US real estate purchases, including the Trump Soho.
Ablyazov stands accused of stealing $440 million from BTA, a bank which he used to head, and Khrapunov is accused of embezzling $300 million from Almaty during his tenure as mayor.
The lawsuit alleges that Viktor Khrapunov’s son Ilya was assisted by Sater in making a $3 million down payment on three Trump Soho units using the stolen proceeds.
Tamir Sapir and Felix Sater are members of the Brooklyn-headquartered, international Hasidic movement Chabad-Lubavitch. Another Bayrock employee and Sater associate, Daniel Ridloff, is also a member.
Sater and Ridloff have been accused of engaging in money laundering activities together, including through Trump properties.
In 2014, Chabad of Port Washington named Felix Sater its “man of the year.” Though he is not Jewish, Tevfik Arif is a major donor to Chabad of Port Washington.
In 2007, Trump hosted and attended a wedding at Mar-a-Lago between Sapir’s daughter Zina and Rotem Rosen, CEO of the American branch of Africa Israel, a holding company owned by the Uzbek-Israeli diamond magnate and Putin confidant Lev Leviev.
Leviev is Chabad’s number one global benefactor and was the key figure behind the establishment of the pro-Putin Federation of Jewish Communities of Russia and the elevation of Chabad’s Berel Lazar, a vocal Putin supporter, to the position of Chief Rabbi of Russia.
On June 13th, 2000, Lazar was elected by the Federation of Jewish Communities of Russia (FEOR) as the Chief Rabbi of Russia.Founded in 1999 by Lazar and Leviev, FEOR was backed by Putin’s Kremlin over the Russian Jewish Congress (RJC), which was then led by the oligarch and Putin nemesis Vladimir Gusinsky.
The previous Chief Rabbi of Russia and RJC-member, Rabbi Adolf Shayevich, has said that a month before the vote Leviev offered him $240,000 to step down and hand power over to Lazar.
Lazar’s and Leviev’s relationship with Putin dates back to 1992, when the then Deputy Mayor provided them with authorization to open an Or Avner school in St. Petersburg.
On the day Lazar was elected Chief Rabbi of Russia, Vladimir Gusinsky was arrested. Four days later he was released and fled the country.
Read my in-depth article about Putin’s taming of the oligarchs and seizure of Russian television, which covers his conflict with Gusinsky, here.
In September 2000, Putin personally attended the dedication ceremony for a Chabad-Lubavitch community center in the Marina Rusha neighborhood of Moscow.
On the first floor, plaques recognize donors, the size of the plaque commensurate with the size of the donation. The largest plaque belongs to Roman Abramovich, the second to Oleg Deripaska.
Russian anti-corruption NGOs accuse Leviev of links to the Izmailovskaya criminal syndicate. Deripaska is also connected to the Izmailovskaya.
As of this writing, Leviev is wanted by Israeli police for questioning related to a diamond smuggling scandal and is believed to be living in Moscow.
In May of 2008, Trump met with Leviev to discuss potential real estate projects in Moscow.
A month later, Trump attended a bris for Zina and Rotem’s newborn son that Leviev had arranged to take place at the gravesite of Rabbi Menachem Mendel Schneerson, Chabad’s holiest site.
Donald Trump’s son-in-law Jared Kushner is a member of Chabad and the Kushner family has donated generously to the organization over the years.
Several of Chabad’s top donors are involved in the global diamond trade, through which a great deal of money is laundered, and Kushner has done business with some of the more infamous of them.
The Brighton Beach, Brooklyn Russian mafia was involved in diamond trade as far back as the 1980s, when Marat Balagula coordinated with the Lithuanian-Israeli mobster and KGB agent Shabtai Kalmonovich to secure mining interests in Sierra Leone.
In 2015, the Kushner Company purchased several floors of the old New York Times building in Manhattan from Lev Leviev’s Africa Israel Investments USA.
Kushner has also purchased Manhattan real estate with $50 million in investments from Raz Steinmetz, whose uncle is the billionaire French-Israeli diamond magnate Beny Steinmetz.
Though not a member of Chabad, Steinmetz has collaborated with Leviev in the past, and was recently found guilty by a Swiss court of corrupting foreign officials and forging documents.
Another major Chabad donor, billionaire and key figure in the Israeli diamond industry is Dan Gertler, who was sanctioned after using corrupt political connections in the Democratic Republic of Congo to secure his diamond and copper mining interests.
Years later, the Trump administration secretly eased sanctions on Gertler five days before he left office.
Trump Tower Toronto, Boris Birshtein, the Solntsevskaya, and Raffeissen Bank
In 2007 the Trump Organization broke ground on the Trump International Hotel and Tower Toronto.
Trump’s original partner on the project dropped out after it was revealed that he was a fugitive wanted on charges of bankruptcy fraud and embezzlement and was extradited back to the US.
Taking his place was the Russian-born billionaire Alexander Yevseyevich Schnaider, who moved to Canada via Israel.
Schnaider made his fortune through a personal and business relationship with his (now former) father-in-law and mentor, the aforementioned former employer of the “Oligarch Trio,” Boris Birshtein.
Born in Soviet-occupied Lithuania, Birshtein first emigrated from the USSR to Israel before settling in Canada in 1982.
By the mid-80s, Birshtein and his company Seabeco were involved in a Soviet program to establish international business ventures headed by Georgi Arbatov, a KGB asset codenamed Vasili.
Seabeco was later involved in the exfiltration of billions of dollars of Communist Party funds out of Russia after the party was outlawed following a KGB-led coup attempt that Boris Yeltsin accused Birshtein of financing.
Following the collapse of the USSR, Birshtein wielded influence in numerous post-Soviet states including Ukraine, Moldova and Kyrgyzstan.
As mentioned, in 1995 Birshtein hosted a high level mafia meeting in Tel Aviv to discuss the divvying up of power and influence in Ukraine. One attendee of that meeting, Solntsevskaya head Sergei Mikhailov, confirmed to The Financial Times that he had a business relationship with Birshtein, who he described as wielding immense influence in Ukraine.
Mikhailov also recalled meeting a young Alexander Schnaider at a restaurant in Belgium, the location of the Seabeco office where Alexander Mashkevich met Patokh Chodiev for the first time.
In 1996, Belgian authorities raided Birshtein and Schnaider’s houses in Antwerp and the two relocated back to Toronto.
Schnaider had begun working at Seabeco sometime in his 20s and within a decade he became a billionaire after establishing his own company, Midland, with his partner Eduard Shyfrin.
The company was launched after Birshtein provided Schnaider with some of his interests in the Ukrainian steel industry.
Schnaider used the proceeds Midland earned from serving as a middleman between the post-Soviet steel industry and international markets to purchase Ukraine’s vast Zaporizhstal steel mill in the late 90s, in what competitors have described as a corrupt, insider deal. In 2003, Midland purchased the Red October steel plant in Volgograd, Russia that supplies the Russian military.
In 2010, Schnaider was informed by his partner Shyfrin that buyers acting on behalf of the Russian government were pressuring them to sell their stake in the Zaporizhstal mill for “politically strategic” reasons, and that if they didn’t their interests in Russia would be at risk.
The deal was financed by VEB, a sanctioned Russian state-owned bank that has a history of serving as a cover for espionage operations. VEB was chaired at the time by Vladimir Putin, who is known to have a relationship with Boris Birshtein. Midland received $850 million on the sale.
$50 million went to Rinat Akhmetov, Ukraine’s wealthiest oligarch who has connections to organized crime, was a key financial backer of the pro-Russian Party of Regions political party and was a client of Paul Manafort’s.
A $100 million “commission” was paid via Cyprus-based shell companies to the arrangers of the deal.
Shortly after the Zaporizhstal deal closed, Schnaider plowed $40 million into the Trump Tower Toronto construction project.
The Trump Tower Toronto project was funded to the tune of $310 million by Austria-based Raiffeisen Zentralbank Osterreich.
Raiffeisen has a long history of investing in former Soviet republics. Andrey Kozlov, a deputy of the Russian Central Bank, accused Raiffeisen of laundering money for senior Russian officials and was shot in the head and killed shortly after the accusation was made.
Leaked diplomatic cables reveal that American officials believed that Semyon Mogilevich used Raiffeisen as a front for his criminal activities.
In 2003, Mogilevich was indicted alongside Jacob Bogatin for a $360 million stock fraud involving a fake company, YBM Magnex, that was listed on the Toronto Stock Exchange.
The next installments of this series will cover corruption, organized crime, and potential money laundering in Trump’s international developments.