Former Trump Associate Felix Sater Accused of Laundering Millions Through Real Estate Projects Linked to President

Donald Trump is seen during a 2005 visit to Colorado to speak at the Bixpo business convention. Felix Sater is standing to his left wearing a maroon tie. Cyrus McCrimmon/The Denver Post/Getty Images

Felix Sater, a Russian-born real estate developer who allegedly helped President Donald Trump pursue a Trump Tower project in Moscow, is no stranger to legal battles.

While in his 20s, the now 53-year-old developer spent a year in prison for stabbing a man in the face with a broken margarita glass during a bar fight. He was also recently sued by singer Mariah Carey's former manager for allegedly hacking into her computers and stealing her personal data while staying as a guest in her home.

Now, a new lawsuit filed in the Southern District of New York by a bank from the Central Asian country of Kazakhstan alleges that Sater helped launder millions of dollars stolen from the bank and funnel them into real estate projects, some of which may have been linked to President Donald Trump.

The lawsuit centers on BTA Bank's decade-long battle to recuperate billions of dollars allegedly stolen by its former chairman, the fugitive Mukhtar Ablyazov. The Kazakh bank claims that Ablyazov stole over $4 billion dollars before fleeing to Russia and later Europe, and it has pursued numerous lawsuits against him in a wide range of jurisdictions.

Donald Trump is seen during a 2005 visit to Colorado to speak at the Bixpo business convention. Felix Sater is standing to his left wearing a maroon tie. Cyrus McCrimmon/The Denver Post/Getty Images

Ablyazov has said that he is a victim of political persecution, and he has funded political opposition groups in his native Kazakhstan that face fierce crackdowns from the authoritarian regime there. But courts in the United Kingdom have found that Ablyazov is guilty of swindling BTA.

The bank also claims that Ablyazov conspired with the former mayor of the Kazakh city of Almaty, Viktor Khrapunov, and his wife Leila and son Ilyas Khrapunov, to launder the stolen funds. The Khrapunov family is now living in Switzerland where they are avoiding extradition to Kazakhstan.

Meanwhile, BTA's fight to recuperate the stolen funds has reached President Trump's inner circle. It was mentioned during the public Congressional testimony last month of Trump's longtime lawyer Michael Cohen. The embattled lawyer, who is going to jail for financial crimes related to his work for Trump, noted that BTA had paid him to help relocate the bank's assets.

"Michael Cohen was recommended to BTA Bank in 2017 as a person who had access to the best legal resources, and was hired by BTA to assemble a winning team," Matthew Schwartz, a partner at Boies Schiller Flexner LLP and former federal prosecutor who represents BTA Bank and the City of Almaty, told Newsweek. "Instead, Michael Cohen did absolutely nothing of value, and BTA quickly tore up its agreement with him. Since that time, BTA has cooperated fully with all law enforcement investigations of Michael Cohen," Schwartz added.

Sater, another Trump associate and a longtime business partner of the Khrapunov family, has also been drawn into the fight between BTA and Ablyazov. The dispute culminated on Monday, when BTA sued Sater, accused him of money laundering and noted that Trump had met with the young Khrapunov.

"Sater and Ilyas would meet often in New York to discuss details of their laundering schemes," read court documents submitted Monday in the Southern District of New York. "Among other places, these meetings between Ilyas and Sater would occur in Sater's offices. 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."

Trump has previously claimed that he barely knows Sater. But Cohen, who worked closely with Trump for decades, testified that Sater was instrumental in pursuing a Trump Tower Moscow deal during the 2016 presidential campaign, and that the businessman had suggested that Trump offer Russian President Vladimir Putin a penthouse in the tower as a marketing scheme to increase the value of the property. Sater also had an office in Trump Tower for years, making it even more unlikely that Trump would be unfamiliar with the developer.

Monday's lawsuit alleges that Sater traveled to Russia around 2013 at Ilyas Khrapunov's request in order to look for potential locations to invest the money stolen by Ablyazov. "Sater conspired with Ilyas to invest the stolen funds to develop a Trump Tower project in Russia," the court documents read.

That same year, Sater's former development company Bayrock helped Ilyas Khrapunov purchase three condos in Trump Tower SoHo and quickly resell the properties. It is unclear whether Trump knew about the origin of the funds at the time, but financial experts have long claimed that the money was likely laundered through Trump Tower.

Sater told Newsweek that he was not involved in Khrapunov's purchase of Trump Tower condos, and that he had already left Bayrock before the purchase was complete.

Monday's lawsuit, however, argued that Sater conspired with his former clients to launder money through a variety of real estate projects, including five in the U.S., and avoid asset freezing orders against Ablyazov and the Khrapunov family.

"Felix Sater is a notorious New York 'businessman' and two-time felon who, along with wanted criminals Mukhtar Ablyazov and Ilyas Khrapunov, and others known and unknown, participated in an international criminal conspiracy to launder and conceal at least $440 million that was stolen from the Plaintiffs in Kazakhstan, and to evade lawful asset freezing and receivership orders issued by the courts of the United Kingdom," the lawsuit filed Monday reads.

"Sater helped Ablyazov, Khrapunov, and others launder tens of millions of dollars in those stolen funds into the United States, where they were invested in real estate and used to procure immigration status for Khrapunov's sister," the court documents continue. "Sater also tried to help them stash some of the stolen money overseas, including in real estate in Moscow. Sater then turned on his criminal confederates and stole at least $40 million of the money he had laundered into the United States for his own personal benefit and the benefit of his associate, Daniel Ridloff."

Sater's attorney Robert Wolf, however, argued that there was more to the story. He said the lawsuit against his client is revenge for ongoing arbitration between BTA and a company owned by Sater. Like Michael Cohen, Sater's company Litco was hired by BTA to recuperate the funds stolen by Ablyazov.

"This is a cheap and desperate retaliation lawsuit by BTA and Almaty based on false allegations," Wolf told Newsweek in an email. "Mr. Sater's asset recovery company, Litco, sued them last October for failing to pay $10 million owed for assistance recovering over $50 million in assets. Their concealment from the court of that lawsuit against them and their concealment of their prior agreement with Litco will result in a prompt dismissal of this case."

Sater told Newsweek that his company Litco was set up to assist BTA with asset recovery. The bank has been accused of paying Sater, a witness in their case against the Khrapunovs, $2.5 million. BTA's lawyer, meanwhile, claims that Litco never disclosed that it was controlled by Sater.

"As usual, Mukhtar Ablyazov, Ilyas Khrapunov and the other defendants are now trying to distract attention from their own crimes with sideshows," Schwartz told Newsweek. "The fact remains that they have no defense to the fraud and money laundering charges that have been leveled against them. But to be crystal clear, neither BTA Bank nor the City of Almaty did anything remotely wrong, and neither of them had any idea about Litco's true owner."

Documents viewed by Newsweek demonstrate that the arbitration case between the two parties is ongoing.

Another Trump ally, the president's current lawyer and former New York mayor Rudy Giuliani, has also been accused of helping the Khrapunov family launder the money stolen from Kazakhstan. Giuliani's former law firm had an office in the Central Asian country. It also helped set up a subsidiary of Bayrock in the Netherlands through which Ablyazov and the Khrapunovs allegedly funneled some of the stolen funds.

Both Giuliani and Sater were named in a criminal complaint filed in the Netherlands in October last year asking the government to investigate the company for money laundering.

Sater was set to testify before the House Intelligence Committee on Wednesday about his role pursuing the Trump Tower Moscow deal, but the hearing was canceled suddenly on Monday.

House Intelligence Committee Chairman Adam Schiff said that the testimony was postponed so that Congress can focus on obtaining information about the report issued Friday by special counsel Robert Mueller, who was investigating potential collusion between the Trump campaign and the Russian government to influence the 2016 presidential election. The report has not been made public or been given to Congress, but Attorney General William Barr sent Congress a short letter summarizing its findings.

"In light of the cursory letter from the Attorney General, and our need to understand Special Counsel Mueller's areas of inquiry and evidence his office uncovered, we are working in parallel with other Committees to bring in senior officials from the DOJ, FBI and SCO to ensure that our Committee is fully and currently informed about the SCO's investigation, including all counterintelligence information," a House Intelligence Committee spokesman told Newsweek. "With the focus on those efforts this week, we are postponing Mr. Sater's open interview."