NY Court Dismisses a 250-million-dollar Tax Fraud Case Against a Russia-born Former Trump Associate

Business Insider had learned that in September, a Manhattan-based court dismissed a 250-million-dollar civil tax fraud case which was against Felix Sater, a Russian-American businessman.

The civil tax-fraud case that was against Felix, a former President Donald Trump associate, and the Bayrock, real-estate development, and investment company that he co-founded, was being prosecuted as a case that is qui tam, which is allowing a whistleblower filing on behalf of a state. The office of the attorney general could then choose whether it wants to intervene or not.

In that case, the purported whistleblower was Fred Oberlander, a lawyer who at one point was representing Jody Kriss, the former business partner of Felix, in a money-laundering suit that was against the real-estate development and investment company. An attorney who was at the hearing told Business Insider that Fred acknowledged that he had already filed his qui tam complaint that was based on the information that the federal judges from the original complaint of Kriss had uncovered.

The attorney stated that the argument didn’t go well for Fred, and it looked possible that the complaint was going to be dismissed based on the use of information by Fred that the federal judges had earlier ordered to be dismissed from the federal complaint being confidential.

Felix and Robert Wolf, who is his lawyer, confirmed later that the case had been dropped.

The office of the Attorney General Eric Schneiderman rejected to intervene in that case in 2016. Eric sent a letter in Feb last year notifying the Supreme Court of New York of a press release Fred had issued that was misleading, claiming that Eric had given green lights to the case when in reality the State had declined to intervene. The office of the Attorney General stated that it was going to continue monitoring the case going forward on protecting the rights and interest of the state.

Wolf, Felix lawyer, stated that the case was dropped on the merits instead of being dismissed on procedural grounds. He noted that Fred together with another lawyer that was involved in the case against Felix, Richard Lerne, have on two occasions been referred to the Department of Justice for criminal contempt concerning their offense in the proceedings that was against Felix.

Lerner told a reporter that he is planning on appealing the ruling to throw that qui tam case.

The first lawsuit brought in 2010, against Felix and the real-estate development and investment company by Jody Kriss, a Bayrock’s former finance director. Kriss didn’t have a hand in that qui tam case that was brought afterward by Fred, claimed that for most of the company existence it was substantially plus covertly mob-owned as well as operated. It was engaged in a series of constant, related crimes, including, wire, mail, and bank fraud; embezzlement; extortion; bribery; conspiracy; money laundering, and tax evasion.

Kriss accused Bayrock’s founder, TevfikArif, and Felix, of cheating him from millions of dollars through racketeering, money laundering, fraud, among other offenses. A judge from NY ruled that the lawsuit might move ahead as a racketeering case in December.

According to that was filed by Kriss, TevfikArif and Felix started negotiating in 2003, with the Trump Organization regarding the criminal past of Felix. In a deposition of 2007, Trump stated that his organization wouldn’t have agreed to partner with the Bayrock company in the Trump SoHo development had he known about the past of Felix. Also, Trump said he wouldn’t be able to identify Felix if they were put in the same room.

The Bayrock’s office used to be two floors below the Trump’s office in Trump Tower based in Fifth Avenue. Someone familiar with the incident, who requested to remain anonymous for fear retribution by Felix or his partners, told Business Insider earlier that Trump and Felix had standing meetings every week.

Bloomberg previously reported that Felix said in a statement that he met with Donald Trump on a regular basis. Kriss told Bloomberg that Trump valued the loyalty of Felix and his Russia connections.