Felix Sater is an immigrant who did prison time for stabbing a man in the face with the broken stem of a margarita glass, and he would surely qualify for the label “bad hombre” were he from Mexico instead of Russia.
It was only by becoming a federal informant that Sater avoided a possible 20-year term for a $40 million fraud in which the feds figure many of the victims were elderly.
Sater’s father also became an informant after being convicted of joining a Mafia soldier shaking down small businesses in Brooklyn for nearly a decade.
None of that stopped Donald Trump from having extensive business dealings with Sater that included the high-rise Trump SoHo New York hotels and condos. Then, after Sater’s rap sheet was widely publicized, Trump said he hardly knew the man.
“If he were sitting in the room right now, I really wouldn’t know what he looked like,” Trump says in court papers from a 2013 law suit.
Yet, even as the Trump administration was preparing plans to ramp up deportations, the president’s longtime personal attorney sat down for coffee in a Manhattan hotel with this Russian immigrant.
According to The New York Times, Trump attorney Michael Cohen and Sater were party to some amateur diplomacy aimed at settling the Russian war on Ukraine with a plan to push Ukraine’s President Petro Poroshenko out of office.
Cohen insisted to The Daily Beast that the Times account was wrong and that he had not been involved in the peace plan. He declined to comment on whether he was troubled by Sater’s criminal background and organized crime ties.
“I will not respond to this question as I am not knowledgeable of all aspects to his past,” Cohen told The Daily Beast via email.
Cohen did acknowledge sitting down briefly with Sater at a Manhattan hotel last month.
“I was asked to meet him for a quick coffee and agreed,” Cohen told The Daily Beast. “When asked, I was unaware who was going to be joining the meeting and never agreed to or worked on any diplomatic plan for Ukraine.”
The person who joined the meeting was Andrii Artemenko, a rich Ukrainian member of parliament of dubious reputation in his home country. Artemenko claims to have material evidence of Poroshenko’s corruption so compelling as to force the Ukrainian president from office.
The Times stands by its account, saying that Cohen had told the paper that he delivered a copy of the plan to the office of then-National Security Adviser Mike Flynn shortly before Flynn was fired. The plan is said by the Times to involve Russia’s withdrawal from Ukraine and a referendum on the fate of occupied Crimea: namely, whether or not the peninsula, which Russian forces seized almost bloodlessly in 2014, would be “leased to Russia for a term of 50 or 100 years.” Artemenko reportedly insists that their peace proposal was met with approval among senior aides to Russian President Vladimir Putin.
Sater did not respond to a request for an interview with The Daily Beast before this article was posted. He was quoted elsewhere denying that he had been engaged in actual diplomacy. He did tell Fox News that the effort is just his latest contribution to his adopted land.
“What could be wrong in helping stop a war and trying to achieve peace?” he said. “I have done so much for my country and thought that promoting peace was a good thing.”
Sater is certainly experienced in promoting things, principally himself. And what he has done for his country—two big Mafia cases for the FBI, a failed effort to buy Stinger missiles in Afghanistan on the black market for the CIA, and supposedly obtaining Osama bin Laden’s cellphone number—seems to have been undertaken largely to escape punishment for what he has admitted in court having done to this country.
Much about Trump’s presidency, and the cast of characters it has assembled, challenges even the most imaginative Hollywood screenwriting, but Sater’s backstory is an especially remarkable example. Having emigrated to Brighton Beach from the Soviet Union when he was 8 years old, he might have been the archetype of the self-made immigrant Trump has nothing but admiration for, provided of course they’re from certain non-Muslim countries.
In his early twenties, Sater had a three-year stint as a successful broker on Wall Street before he slashed that man’s face open in El Rio Grande, a Manhattan bar, causing the victim a wound which required 110 stitches and earning the perpetrator a felony conviction for assault.
Sater served 15 months at Edgecombe Correctional Facility. He was released on parole, prison records seen by The Daily Best show, in September 1995. A month later, his investment firm, White Rock Partners, changed its name to State Street Capital Markets.
Sater mostly escaped public notice until 1998, when the manager at a Manhattan Mini Storage in SoHo opened a cubicle Sater had rented under a false female name (the account was in arrears) and made an interesting discovery. In addition to a 12-gauge shotgun and two 9-millimeter pistols were a box and gym bag containing documents that led the FBI to a massive “pump-and-dump” stock fraud, racketeering, and international money laundering scheme, the architects of which were later shown to be Sater and two of his longtime business colleagues, Gennady “Gene” Klotsman and Salvatore Lauria. Both were with Sater at El Rio Grande the day he turned a margarita glass into a weapon. By the time the evidence was uncovered in SoHo, Sater and Klotsman had gone to Russia; Lauria had also skipped town. They returned and were arrested.
According to a 1998 indictment of Sater filed in the U.S. District Court Eastern District of New York, Sater violated the terms of his agreement with the National Association of Securities Dealers, which instructed him to restrict his activities at White Rock “largely to clerical duties, for which he would receive a minimal salary. In fact, [Sater] received substantial compensation greatly exceeding his agreed-upon salary, and he took part in activities at White Rock and State Street, including the handling of securities and account statement.”
As Sater and his co-defendants would later admit when pleading guilty, White Rock and State Street made money by lying about the worth and ownership of securities, encouraging brokerage firms to peddle the artificially inflated stocks, then laundering the proceeds through various off-shore accounts. All told, they stole about $40 million, much of it from elderly investors, including Holocaust survivors.
Moreover, their illicit activities involved four different Italian mafia crime families, as a subsequent grand jury indictment in 2000 stated. Specifically, from March 1993 to October 1996, Frank Coppa Sr., a captain in the Bonnano crime family; Eugene Lombardo, an associate of that family; Daniel Perisco, an associate of the Colombo family; Joseph Polito Sr., an associate of the Gambino family, Ernest “Butch” Montevecchi, a soldier in the Genovese family among others, “devised, implemented and oversaw fraudulent schemes to manipulate the price of securities” of four different companies and “fraudulently induc[ed] investors to buy and hold these securities,” according to the indictment, also filed in the Eastern District of New York.
Sater, Klotsman, and Lauria, who had already pleaded guilty to the 1998 complaint, were listed as unindicted co-conspirators in this later case, which clearly netted much bigger fish for the feds based on an accidental haul at the Mini Storage. They all turned on their former mob accomplices, as did Sater’s father, Mikhail Sater, also known as Michael Sheferofsky.
The father was indicted in 2000 on two counts by then-U.S. Attorney for the Eastern District of New York Loretta Lynch. Sheferofsky’s accomplice in that case was Butch Montevecchi, who also figured in the younger Sater’s case. Both men pleaded guilty to extorting “restaurants, food stores, and a medical clinic” in the Russian enclave of Brighton Beach in Brooklyn through intimidation and violence from December of 1990 to January of 1999. The father got off with three years’ probation in exchange for cooperation that included wearing a wire in a case against a group of Polish immigrants perpetrating major Medicaid fraud in Greenpoint in Brooklyn.
U.S. Attorney Lynch seemed to make ample use of the Saters, who were a unique father and son team, both working as informants with the same Mafia henchmen, but different FBI handlers on different cases. In a letter addressed to U.S. Senator Orrin Hatch during her confirmation hearing to become Barack Obama’s attorney general, she wrote that as a decade-long informant Felix Sater provided “information crucial to national security and the conviction of over 20 individuals, including those responsible for committing massive financial fraud and members of La Cosa Nostra.”
If the reference to “national security” seems a bit out of place in characterizing a domestic crackdown on organized crime, then that might be because of what Sater, Klotsman, and Lauria allegedly got up to when they were overseas.
As recounted in The Scorpion and the Frog: High Crimes and High Times, a 2003 book Lauria later co-authored with former Associated Press journalist David Barry, the three associates became spies for the CIA, tasked with offering U.S. taxpayer money to buy Stinger anti-aircraft missiles that had gone missing from the covert U.S. campaign to oust the Soviets in Afghanistan. Those missiles, it was feared, were destined for Osama bin Laden’s al Qaeda. The idea, according to the book, was to give the Russian government the funds to purchase 10 Stingers on the black market in Afghanistan, and then turn them over to the Sater, Klotsman, and Lauria, who would then relinquish them to their Langley handlers.
“I think it was Felix who made the deal to buy 10 Stingers and originally the total sale price was going to be $350,000,” Barry told The Daily Beast. “So $35,000 per Stinger, which is about what somebody would have to pay for one of those things back then.”
The quid pro quo with the U.S. government was purportedly as follows: In exchange for helping to secure the very weapon that helped defeat the Red Army in Afghanistan and thus hasten the collapse of the Soviet Union, Sater, Klotsman, and Lauria would buy a “get-out-of-jail-free” card for their Wall Street malfeasance.
Lauria has since repudiated his own book, whose publication he tried to have stopped, calling it a work of fiction. Barry insists, however, that based on his independent corroborative spadework, featuring court documents, interviews and open source material, the story of espionage-for-freedom is true.
“The Russians would go to Afghanistan to handle this because that’s where the missiles were—without tipping off bin Laden that the Stingers were ultimately going to the CIA,” says Barry. They supposedly photographed the serial number of one or more of the Stingers “so that the person they were dealing with in the Agency would be able to verify it.”
Barry said that while the CIA was eager to exploit any and all contacts, even among those connected to the New York underworld, the FBI, which had embarked on a similar and more notorious collaboration with Boston mobster Whitey Bulger, wasn’t as keen. “The feds still wanted to nail them all.”
What eventually scuppered the arrangement, Barry added, was Klotsman’s greed. The other Russian-American multiplied the buy price tenfold, now asking for $350,000 per missile for a total of $3.5 million for all 10. “The FBI at that point, according to what Sal told me, said, ‘Fuck this, we’re not making deals with mob-connected Wall Street gangsters.’ They had no interest in the Agency’s making a deal.”
Sater, whom Barry variously described as a “bad guy” and “tough son of a bitch,” returned to the U.S. first, without the ‘Get out of Jail card,’ still facing the possibility of long prison terms. Then came the 9/11 attacks.
“Until the tragedy of September 11, the matter of my sentencing was a big weight hanging over my head,” Lauria says in the “as told to” book that Barry wrote. “It was very likely that I would do serious time; the question was how much. But a few days after September 11, I got a call from [Sater], telling me that the information we had provided about Osama bin Laden was now being actively pursued, and our situation had improved. Three days before the attack on the World Trade Center, the Taliban or al Qaeda had assassinated the man we had hoped would be our contact, Ahmad Shah Massoud, the man who had become the Northern Alliance leader.”
The book continues, “[Sater] had gotten a call from a boss of a new section in the FBI who wanted to talk to him about the whole Stinger deal. We had done a careful job of putting it together… We had provided the actual serial numbers of the Stingers, which had been available in ’98, and we had passed on what we thought was an active cell phone number for bin Laden.”
The book goes on, “To our way of thinking at the time, we had provided a way to reach bin Laden that should have been important to the U.S. government. [Klotsman] had fouled the deal by raising our asking price for the Stingers from $300,000 to $3 million. Now the information was deemed important, even though the Stinger deal had not gone through. [Sater], for all his other faults, was a very patriotic guy and a diehard Republican, and he was anxious to help the country any way he could—particularly if it served his purposes.”
Sater’s lawyer, Robert Wolf, would later describe the book’s version of the failed Stinger deal as “fabricated” and insist that neither Klotsman nor the FBI were involved. Wolf would also say that fairness required noting that Sater had received high praise from the feds for gathering intelligence on nuclear weapons as well as terrorism and helping to make important criminal cases as he worked to escape punishment for his own crimes. One reason he was so successful in the criminal cases was that he was at the center of the scheme.
By 2002, Sater had reinvented himself yet again, this time as a managing director of a real-estate development firm called the Bayrock Group, founded by the Kazakhstan-born Tevfik Ari. His co-defendant and fellow FBI and CIA informant, Lauria, eventually joined him there.
Bayrock’s offices are, conveniently, in Trump Tower, which is how Sater’s checkered path intersected with the current U.S. president. Court papers say that Sater and Trump first met in 2003 through a leasing agent for the tower. Trump professes when asked about Sater in a sworn deposition not to “know him well at all.”
Nevertheless, for five years, Sater and Bayrock did deal after licensing deal with the Trump Organization, all over the country. A 2006 Rocky Mountain News article quoted Sater as describing the ideal location for a Trump-named building in Denver, Colorado, while “traveling in Moscow with Trump’s son, Donald, Jr.” Email correspondence obtained by Forbes showed direct contact between Donald, Jr. and Sater in discussions about a Florida high-rise.
In the end, another building in SoHo would be the source of the former FBI mole’s unwanted media attention.
In 2007, the Charles Bagli of The New York Times profiled Sater owing to Bayrock’s involvement in developing the Trump SoHo. Sater, Trump and three of the latter’s children—Donald Jr., Eric, and Ivanka—attended the unveiling ceremony for the 46-story luxury condo-hotel in the chic Manhattan neighborhood. Trump, Arif, and Sater were photographed standing next to one another at that event.
Bagli recounted Sater’s history with assault and stock manipulation and yet, in a 2013 deposition related to a separate libel case, Trump claimed that Sater “may” have directly brought a Fort Lauderdale project to him years earlier, while denying any knowledge of his ties to organized crime. “I don’t think he was connected to the Mafia. He got into a barroom fight.”
Whether or not Trump was lousy at due diligence or his fleet of lawyers simply couldn’t Google the name “Felix Sater” (which would have brought up a 1998 Businessweek article citing his implication in the Mini Storage affair and ensuing fraud case) remains unclear. And Sater’s decision to add a ‘t’ to his given name to make it “Satter” should not have greatly complicated matters.
However, the offering plan filed with New York State for the Trump SoHo, averred that there were “no prior felony convictions of Sponsor,” referring to Bayrock and another developer involved in the project known as the Sapir Organization. At this time, Sater had an ownership stake in Bayrock, according to correspondence obtained by Forbes.
In October 2009, 11 years after his indictment, Sater finally faced sentencing for his financial crime in a closed Brooklyn courtroom. He addressed the judge.
“Yes, I am guilty of the things that I have done,” he said. “The worst thing that could happen, your honor, despite whatever sentence you impose on me… I went into real estate development and I built a very successful real estate company… a Trump project. I built the whole thing. Years ago, they wrote an article in the newspaper, ‘Executive With Ties to Donald Trump Has Criminal Past.’ The next month, I had to leave my company, the company I had built with my own hands.”
He spoke of his parents and his sincerity was somewhat undercut by those who knew of his father’s conviction for years of racketeering.
“I hated myself, despised myself for doing the things that I was doing while I was doing them, because my parents did not sacrifice what they sacrificed to have me come to this country and become a criminal,” he said.
Sater was ordered to pay a $25,000 fine rather than the $40 million in restitution he might have been required to pay and to serve no jail time rather than as many as 20 years.
In 2013, Sater’s connection to Trump, who was still two years shy of running for national office, caused the mogul one of his many moments of pique with a member of the international press. Trump stormed out of a BBC Panorama interview when asked by John Sweeney, “Shouldn’t you have said, Felix Sater, you’re connected with the Mafia and you’re fired.” Trump replied by suggesting Sweeney might be “thick” and that he could not break a contract with Bayrock even if Sater’s mob ties were established to his satisfaction.
Sater’s tenure at Bayrock wasn’t just confined to leveraging the Trump brand. He was accused of threatening gruesome acts of violence against erstwhile business associates who were in a position to disclose his shady history. In 2007, the manager of one Trump hotel-condo in Phoenix, Arizona, sued Sater after he allegedly threatened to get a cousin to electrocute the manager’s testicles, dismember him and leave him “dead in the trunk of his car.” Sater reportedly settled that case out of court, but denied the charges. The manager was apparently satisfied with the settlement, for he has since said he wished Sater, “the best of luck.”
By 2010, Sater was out at Bayrock—but in at the Trump Organization. He reportedly brandished a business card naming him as a “Senior Advisor to Donald Trump.” He also had a valid email address at the organization, a phone number that had previously belonged to one of Trump’s general counsels, and his own office in Trump Tower on Fifth Avenue.
Sater’s role as an employee of the Trump Organization also came to light when he was accused of shaking down one of his former colleagues at Bayrock.
Jody Kriss, the former finance director of Bayrock, alleged that he was entitled to a share of the $227 million profits in the Trump SoHo project. As reported by The Daily Beast in August 2016, Kriss claimed, in a court case filed in Delaware, that he was owed $7 million for his work on the project but offered a settlement of only half a million dollars. His principal antagonist in recouping his investment, he said, was Felix Sater.
In sworn testimony, Kriss stated that his money had become entangled with an Icelandic financial company known as FL Group, which seemed to draw Russian investors “in favor” with Vladimir Putin. (Bayrock founder Tevfik Arif was also part of this deal.) According to Kriss:
“Felix Satter [sic] told me that the deal with FL prohibited me from getting the rest in that I could either take the money and shut up or risk being killed if I made trouble. I knew at that time Satter had served a prison sentence for first degree assault (stabbing someone in the face with a wine glass stem) and with learning what would soon become common knowledge, that Satter had had a decades-long involvement with the New York and Russian mafia and had just in 2007 been sued in a civil action in Phoenix.”
The Delaware case ultimately was dismissed because of jurisdiction; but the judge stated on the record that the case could have otherwise proceeded. Sater’s defense team has denied the allegations.
In a separate and still-pending suit to which Kriss is a plaintiff, this one filed in New York’s Southern District, he has alleged that “tax evasion and money-laundering are the core of Bayrock’s business model.”
The defendants have argued that the suit amounts to a shakedown, but the judge has ruled that Kriss has enough of a case to warrant moving forward.
As for Sater, he had coffee the other day with the president's personal lawyer and discussed a peace plan for Ukraine. He was apparently not among the immigrants Trump had in mind when he spoke to a gathering of CEOs on Thursday about his deportation efforts.
“We’re getting really bad dudes out of this country at a rate no one has seen before,” Trump said.