Deutsche Bank
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new dark towers bk
active meas doc busted/fined mult times, ceo went cyprus bank?!
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...The good news is that Vrablic, 58, is alive. That is not something to take for granted when you look at two dead Deutsche Bank executives with ties to Trump, Russia and possibly at dead pedophile money man Jeffrey Epstein. One banker was found hanged in 2014 and one in November.
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trump-family-anthony-kennedy-brett-kavanaugh-dark-towers
Trump family carried out a “coordinated White House charm offensive” to persuade Anthony Kennedy, a swing vote on the supreme court, to retire and clear the way for Brett Kavanaugh, according to a forthcoming book.
In Dark Towers: Deutsche Bank, Donald Trump and an Epic Trail of Destruction, David Enrich, the finance editor of the New York Times, describes how the German bank became the last major financial institution willing to lend to Donald Trump’s repeatedly defaulting business empire.
Long before Trump ran for the White House, Justice Kennedy’s son, Justin, worked as an investment banker at Deutsche. Enrich describes how he developed a relationship with Trump, his daughter Ivanka and son-in-law Jared Kushner, helping to finance real-estate deals no other bank would touch because of Trump’s record of failing to pay his debts to lenders, contractors and business partners.
“Even Trump’s friends would go to considerable lengths to avoid lending him money,” Enrich writes, adding that virtually the only person who would loan money to Trump was his father, Fred, who is widely known to have repeatedly bailed out his son.
Dark Towers will be published on 18 February. The Guardian obtained a copy.
Justin Kennedy was part of the US branch of Deutsche Bank from 1998 to 2009. Drawn to Trump’s risk-taking and glamour, he became a Trump confidant, sitting with the real estate impresario at the US Open tennis or in Manhattan nightclubs, and chaperoning huge loans to finance Trump’s real estate spending sprees.
Kennedy, who ran the bank’s commercial real-estate team, continued to lend to Trump even though Deutsche clients had suffered severe losses when Trump’s casino business collapsed and he declared bankruptcy.
After Kennedy set up his own finance and property firm in Florida, Enrich writes, he continued to help other members of the Trump family – Ivanka, Kushner and Donald Trump Jr – arrange financing for projects in New York. The New York Observer, which was owned by Kushner, put Kennedy on a list of the 100 most powerful people in New York real estate.
Once Trump was in office, he went out of his way to congratulate Justice Kennedy on his son, calling him a “special guy” and saying how much his own children loved him.
“Trump’s flattery,” Enrich writes, “was part of a coordinated White House charm offensive designed to persuade the ageing justice – for years, the court’s pivotal swing vote – that it was safe to retire, even with an unpredictable man in the Oval Office.”
Dark Towers describes how Ivanka Trump befriended the judge, sitting next to him at an inaugural lunch, regaling him with accounts of her close friendship with his son, then visiting the elder Kennedy at the supreme court, bringing her five year-old daughter to hear a case about arbitration agreements.
When Anthony Kennedy announced his retirement in June 2018, it gave Trump an opportunity to tip the court right with his nomination of Kavanaugh, in turn solidifying support among conservatives otherwise sceptical about Trump’s character.
Enrich writes that having helped to stabilise Trump’s business, Deutsche Bank now “indirectly” helped to stabilise his “floundering presidency”.
Trump’s relationship with Deutsche Bank was much discussed during special counsel Robert Mueller’s investigation of Russian election interference and links between Trump and Moscow.
Enrich points to the separate relationships Deutsche Bank and Trump had with a Kremlin-linked Russian bank, VTB, suggesting: “Perhaps this was more than a coincidence.”
But he provides no direct evidence to support suspicions that funds supplied by Deutsche Bank to Trump over two decades came from Russian sources, and also notes that Deutsche executives deny any such direct financial relationship.
Rather, Enrich portrays the bank’s investments in Russia and in Trump as both being symptoms of a reckless investment culture and a pursuit of prestige, with insufficient checks from senior management and an outdated and fragmented computer data system.
Trump’s supporters inside the bank have also argued he had a relatively low overall debt burden, and that his real estate purchases were fundamentally sound investments.
Justin Kennedy did not immediately reply to a request for comment.
In a statement, Deutsche Bank said: “While elements of the narrative seem to be exaggerated to fit into a storyline, we have long acknowledged and sought to learn from our historical shortcomings.”
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an 121
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1220
trump’s personal bankers abruptly resign from Deutsche Bank
Sarah Toce The New Civil Rights Movement
December 23, 2020
President Donald J. Trump's personal bankers, Rosemary Vrablic and Dominic Scalzi, have resigned from Deutsche Bank. The financial institution has loaned the Trump Organization more than $300 million over the years.
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pull loan sieze assets?
https://www.alternet.org/2020/11/deutsche/
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one of Deutsche Bank’s most famous customers has been President Donald Trump, and Deutsche’s activities —including its dealings with Trump — have been the subject of investigations by prosecutors as well as members of Congress. The German bank, Bloomberg News is reporting, has hired attorney Robert Kimmitt — whose relationship with Attorney General William Barr goes back to the late 1980s — to represent it in Washington, D.C.
The 72-year-old Kimmitt is a former U.S. ambassador to Germany. According to Bloomberg, Kimmitt’s “precise role” in Deutsche “isn’t clear even to many executives within the bank.”
Bloomberg journalists Greg Farrell, Steven Arons, Christian Berthelsen and Tom Schoenberg explain, “When Kimmitt was hired, many top executives in the U.S. weren’t immediately informed of his role, according to other people familiar with the matter. Lawyers representing the bank in U.S. Justice Department investigations have been dealing directly with line prosecutors in several long-running investigations. In at least one of those investigations, the Department has relayed almost no information in years, these people said.”
The reporters note that according to Bloomberg’s sources, some of Deutsche’s senior executives in Frankfurt, Germany are hoping that Kimmitt’s relationship with Barr “could help clear up a logjam of Justice Department investigations.” Kimmit, Bloomberg notes, “has close connections to both Deutsche Bank and the Justice Department."
kimmitt’s relationship with Barr goes back to the presidential election of 1988, when Vice President George H.W. Bush received the Republican nomination and went up against the Democratic presidential nominee, former Massachusetts Gov. Michael Dukakis. That year, Bloomberg explains, Kimmitt and Barr “were responsible for vetting potential running mates for the vice president.”
After evaluating various possibilities, the GOP chose Dan Quayle as Bush’s running mate.Bush defeated Dukakis in the general election, and Barr served as Bush’s attorney general in the early 1990s before becoming attorney general for the Trump Administration in 2019.
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https://www.alternet.org/2020/05/whistleblower-wall-street-has-engaged-in-widespread-manipulation-of-mortgage-funds
no lnx
Pro Publica May 16, 2020
Among the toxic contributors to the financial crisis of 2008, few caused as much havoc as mortgages with dodgy numbers and inflated values. Huge quantities of them were assembled into securities that crashed and burned, damaging homeowners and investors alike. Afterward, reforms were promised. Never again, regulators vowed, would real estate financiers be able to fudge numbers and threaten the entire economy.
Twelve years later, there’s evidence something similar is happening again.
Some of the world’s biggest banks — including Wells Fargo and Deutsche Bank — as well as other lenders have engaged in a systematic fraud that allowed them to award borrowers bigger loans than were supported by their true financials, according to a previously unreported whistleblower complaint submitted to the Securities and Exchange Commission last year.
Whereas the fraud during the last crisis was in residential mortgages, the complaint claims this time it’s happening in commercial properties like office buildings, apartment complexes and retail centers. The complaint focuses on the loans that are gathered into pools whose worth can exceed $1 billion and turned into bonds sold to investors, known as CMBS (for commercial mortgage-backed securities).
Lenders and securities issuers have regularly altered financial data for commercial properties “without justification,” the complaint asserts, in ways that make the properties appear more valuable, and borrowers more creditworthy, than they actually are. As a result, it alleges, borrowers have qualified for commercial loans they normally would not have, with the investors who bought securities birthed from those loans none the wiser.
ProPublica closely examined six loans that were part of CMBS in recent years to see if their data resembles the pattern described by the whistleblower. What we found matched the allegations: The historical profits reported for some buildings were listed as much as 30% higher than the profits previously reported for the same buildings and same years when the property was part of an earlier CMBS. As a rough analogy, imagine a homeowner having stated in a mortgage application that his 2017 income was $100,000 only to claim during a later refinancing that his 2017 income was $130,000 — without acknowledging or explaining the change.
It’s “highly questionable” to alter past profits with no apparent explanation, said John Coffee, a professor at Columbia Law School and an expert in securities regulation. “I don’t understand why you can do that.”
In theory, CMBS are supposed to undergo a rigorous multistage vetting process. A property owner seeking a loan on, say, an office building would have its finances scrutinized by a bank or other lender. After that loan is made, it would be subjected to another round of due diligence, this time by an investment bank that assembles 60 to 120 loans to form a CMBS. Somewhere along the line, according to John Flynn, a veteran of the CMBS industry who filed the whistleblower complaint, numbers are being adjusted — inevitably to make properties, and therefore the entire CMBS, look more financially robust.
The complaint suggests widespread efforts to make adjustments. Some expenses were erased from the ledger, for example, when a new loan was issued. Most changes were small; but a minor increase in profits can lead to approval for a significantly higher mortgage.
The result: Many properties may have borrowed more than they could afford to pay back — even before the pandemic rocked their businesses — making a CMBS crash both more likely and more damaging. “It’s a higher cliff from which they are falling,” Flynn said. “So the loss severity is going to be greater and the probability of default is going to be greater.”
With the economy being pounded and trillions of dollars already committed to bailouts, potential overvaluations in commercial real estate loom much larger than they would have even a few months ago. Data from early April showed a sharp spike in missed payments to bondholders for CMBS that hold loans from hotels and retail stores, according to Trepp, a data provider whose specialties include CMBS. The default rate is expected to climb as large swaths of the nation remain locked down.
After lobbying by commercial real estate organizations and advocacy by real estate investor and Trump ally Tom Barrack — who warned of a looming commercial mortgage crash — the Federal Reserve pledged in early April to prop up CMBS by loaning money to investors and letting them use their CMBS as collateral. The goal is to stabilize the market at a time when investors may be tempted to dump their securities, and also to support banks in issuing new bonds. (Barrack’s company, Colony Capital, has since defaulted on $3.2 billion in debt backed by hotel and health care properties, according to the Financial Times.)
The Fed didn’t specify how much it’s willing to spend to support the CMBS, and it is allowing only those with the highest credit ratings to be used as collateral. But if some ratings are based on misleading data, as the complaint alleges, taxpayers could be on the hook for a riskier-than-anticipated portfolio of loans.
The SEC, which has not taken public action on the whistleblower complaint, declined to comment....
Some lenders interviewed for this article maintain they’re permitted to alter properties’ historical profits under some circumstances. Others in the industry offered a different view. Adam DeSanctis, a spokesperson for the Mortgage Bankers Association, which has helped set guidelines for financial reporting in CMBS, said he reached out to members of the group’s commercial real estate team and none had heard of a practice of inflating profits. “We aren’t aware of this occurring and really don’t have anything to add,” he said.
The notion that profit figures for some buildings are pumped up is surprising, said Kevin Riordan, a finance professor at Montclair State University. It raises questions about whether the proper disclosures are being made.
Investors don’t comb through financial statements, added Riordan, who used to manage the CMBS portfolio for retirement fund giant TIAA-CREF. Instead, he said, they rely on summaries from investment banks and the credit ratings agencies that analyze the securities. To make wise decisions, investors’ information “out of the gate has to be pretty close to being right,” he said. “Otherwise you’re dealing with garbage. Garbage in, garbage out.”
The whistleblower complaint has its origins in the kinds of obsessions that keep wonkish investors up at night. Flynn wondered what was going to happen when some of the most ill-conceived commercial loans — those made in the lax, freewheeling days before the financial crisis of 2008 — matured a decade later. He imagined an impending disaster of mass defaults. But as 2015, then 2017, passed, the defaults didn’t come. It didn’t make sense to him.
Flynn, 55, has deep experience in commercial real estate, banking and CMBS. After growing up on a dairy farm in Minnesota, the youngest of 14 children, and graduating from college — the first in his family to do so, he said — Flynn moved to Tokyo to work, first in real estate, then in finance. Jobs with banks and ratings agencies took him to Belgium, Chicago and Australia. These days, he advises owners whose loans are sold into CMBS and helps them resolve disputes and restructure or modify problem loans.
He began poring over the fine print in CMBS filings and noticed curious anomalies. For example, many properties changed their names, and even their addresses, from one CMBS to another. That made it harder to recognize a specific property and compare its financial details in two filings. As Flynn read more and more, he began to wonder whether the alterations were attempts to obscure discrepancies: These same properties were typically reporting higher net operating incomes in the new CMBS than they did for the same year in a previous CMBS.
Flynn ultimately collected and analyzed data for huge numbers of commercial mortgages. He began to see patterns and what he calls a massive problem: Flynn has amassed “materials identifying about $150 billion in inflated CMBS issued between 2013 and today,” according to the complaint.
The higher reported profits helped the properties qualify for loans they might not have otherwise obtained, he surmised. They also paved the way for bigger fees for banks. “Inflating historical cash flows creates a misperception of lower current and historical cash flow volatility, enables higher underwritten [net operating income/net cash flow], and higher collateral values,” the complaint states, “and thereby enables higher debt.”
Flynn eventually found a lawyer and, in February 2019, he filed the whistleblower complaint. The complaint accuses 14 major lenders — including three of the country’s biggest CMBS issuers, Deutsche Bank, Wells Fargo and Ladder Capital— and seven servicers of inflating historical cash flows, failing to report misrepresentations, changing names and addresses of properties and “deceptively and inaccurately” describing mortgage-loan representations. It doesn’t identify which companies allegedly manipulated each specific number. (Spokespeople for Deutsche Bank and Wells Fargo declined to comment on the record. The complaint does not mention Barrack or his company. )
The SEC has the power to fine companies and their executives if fraud is established. If the SEC recovers more than $1 million based on Flynn’s claim, he could be entitled to a portion of it.
When Flynn filed the complaint, the skies looked clear for the commercial mortgage market. Indeed, last year was a boom year for CMBS, with private lenders in the U.S. issuing roughly $96.7 billion in commercial mortgage-backed securities — a 27% increase over 2018, which made it the most successful year since the last financial crisis, according to Trepp. Overall, investors hold CMBS worth $592 billion.
Flynn’s assertions raise questions about the efficacy of post-crisis reforms that Congress and the SEC instituted that sought to place new restrictions on banks and other lenders, increase transparency and protect consumers and investors. The regulations that were retooled included the one that governs CMBS, known as Regulation AB. The goal was to make disclosures clearer and more complete for investors, so they would be less reliant on ratings agencies, which were widely criticized during the financial crisis for lax practices.
Still, the opinion of the credit-ratings agencies remains crucial today, a point reinforced by the Fed’s decision to hinge its bailout decisions on those ratings. That’s a problem, in the view of Neil Barofsky, who served as the U.S. Treasury’s inspector general for the Troubled Assets Relief Program from 2008 to 2011. “Practically nothing” was done to reform the ratings agencies, Barofsky said, which could lead to the sorts of problems that emerged in the bailout a decade ago. If things truly turn bad for the commercial real estate industry or if fraud is discovered, he added, the Fed could end up taking possession of properties that default.
CMBS can be something of a last resort for borrowers whose projects are unlikely to qualify for a loan with a desirable interest rate from a bank or other lender (because they are too big, too risky or some other reason), according to experts. Underwriting practices — the due diligence lenders do before extending a loan — for CMBS have gained a reputation for being less strict than for loans that banks keep on their balance sheets. Government watchdogs found serious deficiencies in the underwriting for securitized commercial mortgages during the financial crisis, just as they did in the subprime residential market.
The due diligence process broke down, Flynn maintains, in precisely the mortgages he was worried about: the 10-year loans obtained before the financial crisis. What Flynn discovered, he said, was that rather than lowering the values for properties that had taken on bigger loans than they could pay off, their owners instead obtained new loans. “Someone should have taken the losses,” he said. “Instead, they papered over it, inflated the cash flow and sold it on.”
For commercial borrowers, small bumps in a property’s profits can qualify the borrower for millions more in loans. Shaving expenses by about a third to boost profit, for instance, can sometimes allow a borrower to increase a loan’s size by a third as well — even if the expenses run only in the thousands, and the loan runs in the millions.
Some executives for lenders acknowledged to ProPublica that they made changes to borrowers’ past financials — scrubbing expenses from prior years they deemed irrelevant for the new loan — but maintained that it is appropriate to do so. Accounting firms review financial data before the loans are assembled into CMBS, they added.
The financial data that ProPublica examined — a sample of six loans among the thousands Flynn identified as having inflated net operating income — revealed potential weaknesses not readily apparent to the average investor. For those six loans, the profits for a given year were listed as 9% to 30% higher in new securities than in the old. After they were issued, half of those loans ended up on watch lists for problem debt, meaning the properties were considered at heightened risk for default.
In each of the six loans, the profit inflation seemed to be explained by decreases in the costs reported. Expenses reported for a particular year in one CMBS simply vanished in disclosures for the same year in a new CMBS.
Such a pattern appeared in a $36.7 million loan by Ladder Capital in 2015 to a team that purchased the Doubletree San Diego, a half-century-old hotel that struggled for years to bring in enough income to satisfy loan servicers, even under a previous, smaller loan.
The hotel’s new loan saddled it with far greater debt, increasing its main loan by 60% — even though the property had landed on a watchlist in 2010 because of declining revenue. Analysts at Moody’s pegged the hotel’s new loan as exceeding the value of the property by 40.5% (meaning a loan-to-value ratio of 140.5%).
Filings for the new loan claimed much higher profits than what the old loan had cited for the same years: The hotel’s net operating income for two years magically jumped from what had previously been reported: 21% and 16% larger for 2013 and 2014, respectively.
Such figures are supposed to be pulled from a property’s “most recent operating statement,” according to the regulation governing CMBS disclosures.
But, in response to questions from ProPublica, lender Ladder Capital said it altered the expense numbers it provided in the Doubletree’s historical financials. Ladder said it wiped lease payments —$700,608 and $592,823 in those two years — from the historical financials, because the new owner would not make lease payments in the future. (The previous owner had leased the building from an affiliated company.)
Ladder, a publicly traded commercial real estate investment trust that reports more than $6 billion in assets, said in a statement, “These differences are due to items that were considered by Ladder Capital during the due diligence process and reported appropriately in all relevant disclosures.”
Yet when ProPublica asked Ladder to share its disclosures about the changes, the firm pointed to a section of the pool’s prospectus that didn’t mention lease payments, or explain or acknowledge the change in income.
The Doubletree did not fare well under its new debt package. Revenues and occupancy declined after 2015 and by 2017, the hotel’s loan was back on the watch list. The hotel missed franchise fee payments. Ladder foreclosed in December 2019, after problems with an additional $5.8 million loan the lender had extended the property.
The Doubletree loan was not the only loan in its CMBS pool, issued by Deutsche Bank in 2015, with apparently inflated profits. Flynn said he was able to track down previous loan information for loans representing nearly 40% of the pool, and all had inflated income figures at some point in their historical financial data.
There was also a noticeable profit increase in two loans Ladder issued for a strip mall in suburban Pennsylvania. The mall’s past results improved when they appeared in a new CMBS. Its 2016 net operating income, previously listed as $1,101,207 in one CMBS, now appeared as $1,352,353 in another, data from Trepp shows — an increase of 23%. The prospectus for the latter does not explain or acknowledge the change in income. The mall owner received a $14 million loan.
Less than a year after it was placed into a CMBS, the loan ran into trouble. It landed on a watchlist after one of its major tenants, a department store, declared bankruptcy.
Ladder said it excluded $203,787 in expenses from the new loan because they stemmed from one-time costs for environmental remediation of pollution by a dry cleaner and a roof repair. Ladder did not explain why the previous lender did not exclude the expense also.
The pattern can be seen in loans made by other lenders, too. In a CMBS issued by Wells Fargo, a 1950s-era trailer park at the base of a steep bluff along the coast in Los Angeles reported sharply higher profits — for the same years — than it previously had.
The Pacific Palisades Bowl Park received a $12.9 million loan from the bank in 2016. The park reported expenses that were about a third lower in its new loan disclosures when compared with earlier ones. As a result, the $1.2 million in net operating income for 2014 rose 28% above what had been reported for the same year under the old loan. A similar jump occurred in 2013. (Edward Biggs, the owner of the park, said he gave Wells Fargo the park’s financials when refinancing its loan and wasn’t aware of discrepancies in what was reported to investors. “I don’t know anything about that,” he said.)
Flynn said he found that for the $575 million Wells Fargo CMBS that contained the Palisades debt, about half of the loan pool appeared to have reported inflated profits at some point, when comparing the same years in different securities.
Another of the loans ProPublica examined with apparently inflated profits was for a building in downtown Philadelphia. When the owner refinanced through Wells Fargo, the property’s 2015 profit appeared 23% higher than it had in reports under the old loan. Wells bundled the debt into a mortgage-backed security in 2016.
The building, One Penn Center, is a historic Art Deco office high-rise with ornate black marble and gold-plated fixtures, and a transit station underneath. One of the primary tenants, leasing 45,000 square feet for one of its regional headquarters, happens to be the SEC. The agency declined to comment
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https://www.alternet.org/2020/04/trump-organization-goes-to-deutsche-bank-for-loan-deferments-as-pandemic-throttles-its-business
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https://www.alternet.org/2020/03/blinded-by-greed-financial-reporter-examines-deutche-banks-distrubing-relationship-with-donald-trump
no lnx
‘Blinded by greed’: Financial reporter examines Deutche Bank’s disturbing relationship with Donald Trump
Written by Alex Henderson March 12, 2020
The banking sector in general has received more than its share of scathing critiques since the economic crash of September 2008 and the Great Recession, but no bank has been more controversial in the Trump era than Germany’s Deutsche Bank. In his new book, “Dark Towers: Deutsche Bank, Donald Trump, and an Epic Trail of Destruction,” journalist David Enrich (known for his finance reporting for the New York Times) delves into President Trump’s relationship with Deutsche. And Enrich discusses the book in a Q&A interview with the German weekly Der Spiegel (which means “The Mirror” in German).
Speaking to Der Spiegel’s Alexander Sarovic, Enrich explained that Deutsche Bank “has been involved in really serious scandals all over the world, ranging from money laundering and manipulating markets to violating international sanctions — from bribing public officials to deceiving governments and regulators.” And according to Enrich, Deutsche helped Trump win the United States’ presidential election in 2016.
“Donald Trump was completely off limits, unbankable with the mainstream financial institutions for many years because he had defaulted over and over again — and then, Deutsche Bank comes in,” Enrich recalls. “It was trying to make a name for itself in the United States market…. They almost single-handedly enabled him to bounce back from all his business failures and keep building, which Donald Trump then used very successfully to portray himself as a successful businessman and real estate mogul. That was one of the foundations for his successful White House campaign.”
Sarovic asked Enrich why Deutsche “remained committed to Trump even after he defaulted on a loan of over $300 million and then sued the bank on top of that” — and the Times’ finance editor responded, “They kept thinking that the fees they could generate from Trump on the short term were worth the very substantial long-term risks. And in all honesty, that turned out to be true. The relationship with Trump over 20 years has probably been quite profitable for Deutsche Bank.”
Deutsche, according to Enrich, “really were blinded by greed” — and that greed attracted them to Trump. Sarovic noted that two Democrat-led committees in the U.S. House of Representatives have subpoenaed Trump’s financial records, asking Enrich what those documents might “reveal.”
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https://www.nytimes.com/2019/05/19/business/deutsche-bank-trump-kushner.html
Deutsche Bank Staff Saw Suspicious Activity in Trump and Kushner Accounts
Tammy McFadden, a former Deutsche Bank employee, saw potentially suspicious transactions involving the company of Jared Kushner, President Trump’s son-in-law and adviser, she said.
Tammy McFadden, a former Deutsche Bank employee, saw potentially suspicious transactions involving the company of Jared Kushner, President Trump’s son-in-law and adviser, she said.Credit...Willie J. Allen Jr. for The New York Times
By David Enrich
May 19, 2019
JACKSONVILLE, Fla. — Anti-money-laundering specialists at Deutsche Bank recommended in 2016 and 2017 that multiple transactions involving legal entities controlled by Donald J. Trump and his son-in-law, Jared Kushner, be reported to a federal financial-crimes watchdog.
The transactions, some of which involved Mr. Trump’s now-defunct foundation, set off alerts in a computer system designed to detect illicit activity, according to five current and former bank employees. Compliance staff members who then reviewed the transactions prepared so-called suspicious activity reports that they believed should be sent to a unit of the Treasury Department that polices financial crimes.
But executives at Deutsche Bank, which has lent billions of dollars to the Trump and Kushner companies, rejected their employees’ advice. The reports were never filed with the government.
The nature of the transactions was not clear. At least some of them involved money flowing back and forth with overseas entities or individuals, which bank employees considered suspicious.
Real estate developers like Mr. Trump and Mr. Kushner sometimes do large, all-cash deals, including with people outside the United States, any of which can prompt anti-money laundering reviews. The red flags raised by employees do not necessarily mean the transactions were improper. Banks sometimes opt not to file suspicious activity reports if they conclude their employees’ concerns are unwarranted.
But former Deutsche Bank employees said the decision not to report the Trump and Kushner transactions reflected the bank’s generally lax approach to money laundering laws. The employees — most of whom spoke on the condition of anonymity to preserve their ability to work in the industry — said it was part of a pattern of the bank’s executives rejecting valid reports to protect relationships with lucrative clients.
“You present them with everything, and you give them a recommendation, and nothing happens,” said Tammy McFadden, a former Deutsche Bank anti-money laundering specialist who reviewed some of the transactions. “It’s the D.B. way. They are prone to discounting everything.”
Ms. McFadden said she was terminated last yearafter she raised concerns about the bank’s practices. Since then, she has filed complaints with the Securities and Exchange Commission and other regulators about the bank’s anti-money-laundering enforcement.
Kerrie McHugh, a Deutsche Bank spokeswoman, said the company had intensified its efforts to combat financial crime. An effective anti-money laundering program, she said, “requires sophisticated transaction screening technology as well as a trained group of individuals who can analyze the alerts generated by that technology both thoroughly and efficiently.”
“At no time was an investigator prevented from escalating activity identified as potentially suspicious,” she added. “Furthermore, the suggestion that anyone was reassigned or fired in an effort to quash concerns relating to any client is categorically false.”
Amanda Miller, a spokeswoman for the Trump Organization, the umbrella company for the Trump family’s many business interests, said: “We have no knowledge of any ‘flagged’ transactions with Deutsche Bank.” She said the Trump Organization currently has “no operating accounts with Deutsche Bank.” She did not respond when asked if other Trump entities had accounts.
Karen Zabarsky, a spokeswoman for Kushner Companies, said: “Any allegations regarding Deutsche Bank’s relationship with Kushner Companies which involved money laundering is completely made up and totally false. The New York Times continues to create dots that just don’t connect.”
Deutsche Bank’s decision not to report the transactions is the latest twist in Mr. Trump’s long, complicated relationship with the German bank — the only mainstream financial institution consistently willing to do business with the real estate developer.
Congressional and state authorities are investigating that relationship and have demanded the bank’s records related to the president, his family and their companies. Subpoenas from two House committees seek, among other things, documents related to any suspicious activities detected in Mr. Trump’s personal and business bank accounts since 2010, according to a copy of a subpoena included in a federal court filing.
Mr. Trump and his family sued Deutsche Bank in April, seeking to block it from complying with the congressional subpoenas. The president’s lawyers described the subpoenas as politically motivated.
Suspicious activity reports are at the heart of the federal government’s efforts to identify criminal activity like money laundering and sanctions violations. But government regulations give banks leeway in selecting which transactions to report to the Treasury Department’s Financial Crimes Enforcement Network.
Lenders typically use a layered approach to detect improper activity. The first step is filtering thousands of transactions using computer programs, which send the ones considered potentially suspicious to midlevel employees for a detailed review. Those employees can decide whether to draft a suspicious activity report, but a final ruling on whether to submit it to the Treasury Department is often made by more senior managers.
In the summer of 2016, Deutsche Bank’s software flagged a series of transactions involving the real estate company of Mr. Kushner, now a senior White House adviser.
Ms. McFadden, a longtime anti-money laundering specialist in Deutsche Bank’s Jacksonville office, said she had reviewed the transactions and found that money had moved from Kushner Companies to Russian individuals.She concluded that the transactions should be reported to the government — in part because federal regulators had ordered Deutsche Bank, which had been caught laundering billions of dollars for Russians, to toughen its scrutiny of potentially illegal transactions.
Ms. McFadden drafted a suspicious activity report and compiled a small bundle of documents to back up her decision.
Tracking 30 Investigations Related to Trump
Federal, state and congressional authorities are investigating Donald J. Trump’s businesses, campaign, inauguration and presidency.
Typically, such a report would be reviewed by a team of anti-money laundering experts who are independent of the business line in which the transactions originated — in this case, the private-banking division — according to Ms. McFadden and two former Deutsche Bank managers.
That did not happen with this report. It went to managers in New York who were part of the private bank, which caters to the ultrawealthy. They felt Ms. McFadden’s concerns were unfounded and opted not to submit the report to the government, the employees said.
Ms. McFadden and some of her colleagues said they believed the report had been killed to maintain the private-banking division’s strong relationship with Mr. Kushner.
After Mr. Trump became president, transactions involving him and his companies were reviewed by an anti-financial crime team at the bank called the Special Investigations Unit. That team, based in Jacksonville, produced multiple suspicious activity reports involving different entities that Mr. Trump owned or controlled, according to three former Deutsche Bank employees who saw the reports in an internal computer system.
Some of those reports involved Mr. Trump’s limited liability companies. At least one was related to transactions involving the Donald J. Trump Foundation, two employees said.
Deutsche Bank ultimately chose not to file those suspicious activity reports with the Treasury Department, either, according to three former employees. They said it was unusual for the bank to reject a series of reports involving the same high-profile client.
Mr. Trump’s relationship with Deutsche Bank spans two decades. During a period when most Wall Street banks had stopped doing business with him after his repeated defaults, Deutsche Bank lent Mr. Trump and his companies a total of more than $2.5 billion.Projects financed through the private-banking division include Mr. Trump’s Doral golf resort near Miami and his transformation of Washington’s Old Post Office Building into a luxury hotel.
When he became president, he owed Deutsche Bank well over $300 million. That made the German institution Mr. Trump’s biggest creditor — and put the bank in a bind.
Senior executives worried that if they took a tough stance with Mr. Trump’s accounts — for example, by demanding payment of a delinquent loan — they could provoke the president’s wrath. On the other hand, if they didn’t do anything, the bank could be perceived as cutting a lucrative break for Mr. Trump, whose administration wields regulatory and law enforcement power over the bank.
In the past few years, United States and European authorities have punished Deutsche Bank for helping clients, including wealthy Russians, launder funds and for moving money into countries like Iran in violation of American sanctions. The bank has paid hundreds of millions of dollars in penalties and is operating under a Federal Reserve order that requires it to do more to stop illicit activities.
On two palm-tree-lined campuses in Jacksonville, Deutsche Bank has thousands of employees who vet customers and transactions. Six current and former bank employees there said the operations were deeply troubled.
Anti-money laundering workers were pressured to quickly sift through transactions to assess whether they were suspicious, the employees said. As a result, they often erred on the side of not flagging transactions.
Two former employees said that they had raised concerns about transactions involving companies linked to prominent Russians, but that managers had told them not to file suspicious activity reports. The employees were under the impression that the bank did not want to upset important clients.
Several employees said they had complained about the bank’s anti-money laundering processesto Joshua Blazer, the head of Deutsche Bank’s financial crimes investigations division in Jacksonville, and had then been criticized for having a negative attitude. One employee said she resigned last summer over concerns about the bank’s ethics.
Mr. Blazer, hired by Deutsche Bank in 2017 to strengthen the bank’s financial crime-fighting apparatus, declined to comment.
Ms. McFadden’s job at Deutsche Bank was to inspect clients and transactions in the company’s private-banking division — the unit that lent money to Mr. Trump. She joined the bank in 2008, after working for Bank of America, also in Jacksonville.
Ms. McFadden had left Bank of America in 2005, and later sued for racial discrimination and wrongful termination. According to court records, her lawsuit was settled on confidential terms the same year she joined Deutsche Bank, where she went on to win multiple performance awards.
Around the time she flagged the Kushner Companies’ transactions, Ms. McFadden said, she also complained about how the bank was scrutinizing the accounts of high-profile customers, such as those in public office. Those customers — known as politically exposed persons — are regarded as at heightened risk of being involved in corruption. As a result, their accounts are subject to extra vetting.
Ms. McFadden said she had told her superiors that dozens of politically exposed clients of the private-banking division, including Mr. Trump and members of his family, were not receiving that added attention. Her superiors told her to stop raising questions, according to Ms. McFadden and the two former managers.
After taking her complaint to the human resources department, Ms. McFadden was transferred to another division. She was terminated in April 2018. The bank told her that she was not processing enough transactions.
Ms. McFadden disputed that. She said her superiors had reduced the number of transactions she was assigned to review after she voiced her concerns. She and the two former managers said they perceived her termination as an act of retaliation.
“They attempted to try to silence me,” she said. “I’m at peace because I know that I did the right thing.”
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https://www.alternet.org/2020/02/the-million-dollar-question-finance-editor-breaks-down-dojs-bizarre-abandonment-of-a-russian-money-laundering-case-against-deutsche-bank/
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‘The million-dollar question’: Finance editor breaks down DOJ’s bizarre abandonment of a Russian money laundering case against Deutsche bank
Written by Alex Henderson February 18, 2020
When other banks weren’t making generous loans to Donald Trump and the Trump Organization, Deutsche Bank was. David Enrich, finance editor of the New York Times and author of the new book,“Dark Towers: Deutsche Bank, Donald Trump and an Epic Trail of Destruction,” discussed Deutsche’s relationship Trump and a seemingly abandoned U.S. Department of Justice (DOJ) case against the bank during a Monday night, February 17 appearance on MSNBC’s “The Rachel Maddow Show.”
Maddow, noting that Trump “probably owes hundreds of millions of dollars to this one institution,” asked Enrich “whatever happened to” a possible U.S. Department of Justice (DOJ) case against Deutsche Bank that involved a “Russian money laundering scandal.” And Enrich responded, “That is the million-dollar question.”
Enrich explained that during the final months of the Obama Administration, the DOJ was “close” to bringing a “criminal case” against Deutsche Bank “for its involvement in Russian money laundering” — but after Trump became president, the case fell by the wayside.
“Deutsche Bank executives became convinced that this was just too hot to handle for the Trump Administration,” Enrich told Maddow. “They did not want anyone in the Administration to bring more public attention to thevery close relationship between Deutsche Bank and Russia on the one hand and Deutsche Bank and Trump on the other hand.”
Maddow asked Enrich what Deutsche Bank has told him about either the Trump Administration or the bank’s ties to Russia. And Enrich responded, “They’ve publicly refused to speak (or) say much of anything in public about their client. They acknowledge that Trump is a client. Trump has disclosed, in his limited White House disclosures, the amounts that he owes and what those loans are.”
Enrich went on to say, “They are trying to — desperately, I think — make this very bad situation, where they are kind of the public face of Donald Trump’s finances…. go away.”
The million-dollar question’: Finance editor breaks down DOJ’s bizarre abandonment of a Russian money laundering case against Deutsche bank
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https://www.alternet.org/2019/12/heres-why-congress-wants-to-look-inside-the-bank-that-fronted-donald-trump-2-billion/
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Here’s why Congress wants to look inside the bank that fronted Donald Trump $2 billion
Written by Dana Kennedy / Raw Story, DC Report December 31, 2019
Just try phoning Trump’s private banker Rosemary T. Vrablic at Deutsche Bank’s U.S. headquarters in Manhattan. Back in 2017, before too many bankers involved with Deutsche Bank started turning up dead, Trump once dared reporters to call her, saying she was the “the head” of the bank and “the boss.”
The good news is that Vrablic, 58, is alive. That is not something to take for granted when you look at two dead Deutsche Bank executives with ties to Trump, Russia and possibly at dead pedophile money man Jeffrey Epstein. One banker was found hanged in 2014 and one in November.
Vrablic’s office picked up right away when this reporter called following the Supreme Court’s decision on Dec. 13 to take up Trump’s argument that he be allowed to shield disclosure of his financial information from Congress and the New York attorney general.
Not surprisingly, the woman who answered the phone in Vrablic’s office refused to identify herself. Nor would she put Vrablic on to answer questions about Trump.
She sounded flabbergasted that anyone from the public, much less the media, would be calling someone who is, for the most part, a mystery woman. And that is despite her role in approving about $300 million in allegedly suspect loans to Trump. That arrangement will be part of a quite likely historic oral argument by the Supreme Court in March with a planned June decision.
Refusing to transfer the call to a corporate spokesperson, the person who answered the phone tried to imply that Vrablic no longer worked there. Then she agreed to take a message that was never returned.
‘Global Laundromat’
Deutsche Bank lent Trump millions after he defaulted on loans they already gave him and after he once sued them in 2008. Known derisively as a “global laundromat,” the bank is facing U.S. and British legal actions over its role in a $20 billion Russian money-laundering scheme. Two Congressional committees want the bank to release 10-plus years of records involving Trump and his three oldest children as Congress probes Russian money laundering and possible foreign influence involving Trump. White House lawyers have fought the committees tenaciously.
It’s hoped that the Supreme Court’s verdict will end years-long efforts on the part of U.S. officials to glean the truth about Trump’s finances. Especially at issue is whether Russians interfered in the 2016 election and if that meddling was powered by Russian money funneled to Trump through the giant, scandal-ridden German bank.
Teller to Managing Director
Vrablic, a one-time bank teller turned Deutsche Bank private wealth managing director, was Trump’s liaison at the bank. She sat in a hoodie in the VIP section at the Trump inauguration.
Trump borrowed more than $2 billion in the past two decades. Many allege the loans could hold the key to Russian funding of Trump.
Hired in 2006 with celebratory ads in The New York Times and a sweet deal guaranteeing her $3 million a year, Vrablic’s work raised the bank’s public profile–at first in a good way. Now the opposite is true.
Trump burned through his relationships with bank investment and commercial real estate departments because of his constant defaults and failures. Then Vrablic stepped up in 2010.
The Kushner Network
Trump’s daughter Ivanka had just married Jared Kushner, who was a longtime client of Vrablic along with his mother Seryl. Ivanka steered Vrablic in the private bank sector of Deutsche Bank her father’s way. It turned out to be the financial lifeline crucial in helping him win the election.
People at Vrablic’s level in the banking world, even when they are swept up in such international scandals, are rarely household names unless they die suddenly… read suspiciously. Even then, they are familiar to only the most inside-baseball financial journalists. They are never part of the daily Trump-Schiff-Pelosi-Schumer-AOC-Nunes-McConnell etc. political narrative though their influence is often greater.
Their deaths often remain murky. Supposed details take on a life of their own on conspiracy websites but the actual truth remains frustratingly out of reach – a bit like Jeffrey Epstein’s alleged jail suicide.
A Pair of Suicides
Thomas Bowers, 55, Vrablic’s former boss, ran the private wealth division of Deutsche Bank and oversaw loans to Trump and reportedly to Epstein until he left the bank, reportedly in 2015. It is said he hanged himself at his Malibu home on Nov. 19.
His death was first reported in a tweet by David Enrich of The New York Times, one of the foremost experts on Deutsche Bank. “Dark Towers: Deutsche Bank, Donald Trump and an Epic Trail of Destruction,” an upcoming book by Enrich, focuses in part on the sudden death of William Broeksmit, a senior Deutsche Bank executive.
Broeksmit, a man who “knew too much,” according to Enrich, was found hanging in his London home in 2014. Enrich calls it a “mysterious suicide.”
Enrich previewed the deeply weird story of the whistleblower in the Broeksmit case, who turns out to be the troubled but possibly believable stepson of Broeksmit, in a New York Times Magazine story in October. So far, though, he has done no more than tweet about Bowers, first to announce his death, then to deny “rumors” that Bowers had been Epstein’s banker.
The Epstein Connection
Enrich said on Twitter that Bowers left Deutsche Bank in 2013, prior to Epstein becoming a client. Deutsche Bank would not comment on Bowers and other reports say Bowers left Deutsche Bank in 2015 when Epstein was already a customer.
Epstein, of course, allegedly committed suicide while in jail in August. One of Estonia’s leading bankers, Aivar Rehe, apparently committed suicide in September in Tallinn. Rehe ran Danske Bank which was used by clients in Russia and Eastern Europe to launder billions of dirty dollars. At the time of the Rehe death, Frankfurt prosecutors were eyeballing Deutsche Bank for its part in doing business with suspicious American customers, The New York Times reported.
The Democratic-controlled House Financial Services and Intelligence Committees issued subpoenas to Deutsche Bank in April for the records. In turn, Trump sued the bank to prevent it from complying. It’s believed that the bank has documents that would show on how Trump made his money, who he partnered with and extensive details of what he borrowed and resulting transactions.
The subpoenas also included demands for information about suspicious activity in Trump’s Deutsche Bank accounts.
Trump’s Lender of Last Resort
Starting in the late 1990s, Trump had become such a bad credit risk, either repeatedly defaulting on loans or declaring bankruptcy, that no U.S. banks would do business with him.
Deutsche Bank, which badly wanted to expand internationally, especially into the United States, saw an opportunity with Trump and became his chief creditor, despite his rank financial past.
Anti-money-laundering investigators at Deutsche Bank flagged “multiple transactions” involving accounts controlled by Trump and Jared Kushner in 2016 and 2017 and alerted bank executives who apparently ignored the intel, The New York Times reported in May.
“You present them with everything, and you give them a recommendation, and nothing happens,” Tammy McFadden, a former Deutsche Bank anti-money laundering specialist who reviewed some of the transactions told The Times.
“It’s the D.B. way. They are prone to discounting everything.”
Additional reporting by Matthew Reagan and Anna Sasser, Occidental College, Los Angeles
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trump tax returns close to release? 1119
https://www.alternet.org/2019/11/deutsche-bank-executive-who-signed-off-on-trump-loans-commits-suicide/
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https://www.alternet.org/2019/08/russian-oligarch-bombshell-would-make-impeachment-proceedings-absolutely-inevitable-nbc-analyst/
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Russian oligarch bombshell would ‘make impeachment proceedings absolutely inevitable’: NBC analyst
Written by Bob Brigham / Raw Story August 28, 2019
Fast-tracked impeachment hearings will occur this fall if the bombshell report is true that President Donald Trump had loans with Deutsche Bank co-signed by Russian oligarchs close to Vladimir Putin.
“The source close to Deutsche Bank says that the co-signers of Donald Trump’s Deutsche Bank loans are Russian billionaires close to Vladimir Putin,” MSNBC’s Lawrence O’Donnell reported Tuesday.
“Got to stress ‘if true,’ but if true, the reporting that you have your source, it’s the skeleton key, right, that opens -— picks the lock on so many fundamental mysteries of the Trump era, the ones we thought Robert Mueller was going to answer and we now know the reason that Robert Mueller didn’t answer them, all the connections, the nexus with Russia on a million levels, political, financial, security, everything else, criminal potentially, was because he was basically told he couldn’t look at this stuff,” Heilemann explained. “This was the stuff he wasn’t allowed to go for. He couldn’t go looking for the skeleton key.”
“So now if we have the skeleton key, it picks a lot of locks and answers a lot of questions and also puts Trump in a very difficult place politically, partly because we’re barrelling towards a re-election campaign and we’re also on the clock for the impeachment hearings. We also know it’s almost Labor Day. We know decisions have to get made,” he continued.
“And in this narrative, this moment, if the skeleton key suddenly were to emerge, it would, I think, make impeachment proceedings absolutely inevitable starting this fall,” he added.
Watch:
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DOJ money laundering probe of Deutsche Bank includes Kushner transactions
by Alex Henderson June 20, 2019
The U.S. Department of Justice (DOJ) is conducting a criminal investigation of possible money laundering violations by Deutsche Bank, and the New York Times is reporting that the probe will…
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Cyprus Connection
Another major client of Burck was the corrupt FBME bank in Cyprus, which worked closely with Deutsche Bank to move money for its Russian-speaking clients.
In 2014, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) charged that FBME Bank was purposely promoting a “don’t-ask-don’t-tell” approach to money laundering regulation compliance “to attract illicit finance business from the darkest corners of the criminal underworld.” FinCen is our government’s anti-money laundering agency. It is staffed with IRS agents who specialize in tracing illicit money flows.
BuzzFeed described FBME “as a major conduit for funds linked to terrorism, organized crime, and chemical weapons, and revealed how blue-chip Western institutions enabled its activities.”
After the Mueller investigation was launched soon after Trump was sworn in, in 2017, McGahn hired Burck as he was trying to navigate the shoals between his obligations as White House counsel and the requests of Mueller’s investigators. This may have been especially important as one of the U.S. attorneys who signed Sater’s cooperation agreement in 1998 was Andrew Weissmann, a financial fraud expert who was also on Mueller’s team.
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https://www.**newsweek.com/2017**/12/29/donald-trump-russia-secret-deutsche-bank-753780.html
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It sounded like an exhausted parent scolding a tantrum-prone toddler with a penchant for tossing toys from his stroller.In November 2008, Steven Molo, an attorney for Deutsche Bank, wrote a letter to the Supreme Court of New York about one of the company's most troublesome clients. At issue was $640 million that client had borrowed in 2005 to fund construction of a new hotel in Chicago. The client had personally guaranteed the loan, but a few years later, the Great Recession devastated the economy, and he defaulted on his payment, with $330 million outstanding. Deutsche was seeking an immediate $40 million from the client, plus interest, legal fees and costs.The debtor in question: Donald Trump, the future president of the United States.Instead of paying up, the New York real estate mogul countersued, claiming the 2008 crash was a force majeure event—one that Deutsche had helped precipitate. Therefore, he argued, he wasn't obliged to pay back the money. Instead, he claimed Deutsche owed him money—about $3 billion in damages.In response, Molo drew up a withering document, contrasting Trump's frivolous writ with his long career of boasting about how rich he was:
Trump proclaims himself "the archetypal businessman, a deal-maker without peer." Trump has stated in court he is worth billions of dollars. In addition to substantial cash, personal investments and various other tangible assets, he maintains substantial interests in numerous extraordinary properties in New York and around the country.Those assets included hotel projects in seven U.S. cities, as well as in Mexico, the Dominican Republic, Canada, Panama and Dubai, United Arab Emirates, the lawyer noted. There were also casinos and golf courses scattered all over the world.The same day Trump argued that the Great Recession meant he didn't need to pay back his debts, he gave an interview to The Scotsman newspaper. After a two-year fight, he had gotten approval from the Scottish government for a new resort near Balmedie in Aberdeenshire—and he was thrilled. "The world has changed financially, and the banks are all in such trouble," he told the paper, "but the good news is that we are doing very well as a company, and we are in a very, very strong cash position." Trump said he didn't have any exposure to the stock market, had bought the Scottish land for cash and was now well placed to build "the world's greatest golf course." Two weeks later, George Sorial, a Trump Organization executive, assured The Scotsman that the tycoon had a billion dollars earmarked for the course.
If those statements weren't damning enough, Molo's affidavit cited the real estate tycoon's literary works, which summarized his insouciant attitude toward paying back other people's money. Trump, the attorney observed, provided extensive advice on how to do business in his half-dozen or so books. In How to Get Rich, Trump advises readers to use the courts to "be strategically dramatic." In Think Big and Kick Ass in Business and in Life, he boasts of how he "love[s] to crush the other side and take the benefits." Trump's strategy—honed during his terrible financial struggles with lenders during the 1990s—"was to turn it back on the banks…. I figured it was the bank's problem, not mine," Molo quoted him as saying, in connection with unpaid debt.As a result of these maneuvers, by the mid-2000s, U.S. financial institutions had stopped lending to Trump for his building projects. Deutsche was the only one still willing to work with him.
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Trump Denies Russia Collusion—Again and Again
After Trump burned the bank, Deutsche shunned him as well. But Trump soon found a creative way to get off its blacklist—and return to solvency.'Are You Fucking Kidding Me?'Two years after Molo wrote his letter to the court, Trump settled his feud with the German bank. How he did it was bizarre: He paid back Deutsche with a massive lifeline—from Deutsche. Only this time he eschewed its real estate team—which wanted nothing to do with him—and got a loan from its private wealth division. This group typically deals with high-net-worth individuals, not real estate transactions, but in 2010 it not only lent him the money he owed its real estate team but also reportedly gave Trump another $25 million to $50 million in credit.
Deutsche employees in New York were surprised by the bank's decision. When asked whether it was normal to give more money to a customer who was a bad credit risk and liked to sue, one former senior staff member at the bank put it succinctly: "Are you fucking kidding me?"Over the next few years, the money kept rolling in for Trump. He took out two mortgages against a resort in Miami and a $170 million loan to finish his hotel in Washington, D.C. According to Bloomberg, by the time Trump was elected president of the United States in November 2016, he owed Deutsche around $300 million, an unprecedented debt for an incoming president. (His June financial disclosure showed he owes the bank $130 million, which is due in full in 2024.)The loans to Trump weren't the only abnormal behavior at Deutsche. Around the same time he received his new line of credit, thebank was laundering money, according to the New York State Department of Financial Services (DFS). Russian money. Billions of dollars that flowed from Moscow to London, then from London to New York—part of a scheme for which European and American regulators eventually punished the bank.
Was the timing of this illicit operation and the loans to Trump coincidental? Or evidence of something more sinister—a critical chapter in the president's long history of suspicious business deals with Russian and post-Soviet oligarchs? In January, Trump claimed the former, tweeting in his usual bombastic style: "I have nothing to do with Russia—no deals, no loans, no nothing." But the president's refusal to accept the assessment of his intelligence agencies—that Moscow meddled in the 2016 election—has, among other things, fueled suspicions about his ties to Russia.Robert Mueller is now trying to find out the truth about those suspicions. The special counsel is investigating Russian interference—from the hacking of the Democratic National Committee (DNC) to alleged coordination between the Trump campaign and Moscow. So far, his team has charged key Trump campaign officials Paul Manafort and Rick Gates with money laundering, as well as other offenses. He's also gotten two former advisers, Michael Flynn and George Papadopoulos, to plead guilty to lying to the FBI and cooperate with the probe.
Now, however, Mueller appears to be following the money, trying to determine if Trump has a financial connection to Russia—one that might at least partly explain his behavior. In December, the German newspaper Handelsblatt reported that the special counsel's office has subpoenaed Deutsche Bank, demanding data and documents related to people or entities tied to the president and those close to him. The White House says the subpoena doesn't directly pertain to Trump or his family's accounts. But if the president has a dark Russian secret, the German banking giant's money-laundering scandal may be key to finding out what it is.Friends With Kremlin Benefits
The story of how Deutsche became embroiled in the Trump-Russia probe dates back to 2005, when the German lender bought UFG, a boutique investment bank, to acquire an entry point into Moscow. UFG's co-founder and chairman was Charles Ryan, a charming American banker with libertarian views. Ryan's partner was Boris Fyodorov, a finance minister under former Russian President Boris Yeltsin. The bank straddled West and East, and was international and local.
The man behind Deutsche Bank's aggressive expansion was Anshu Jain, its future co-CEO. He persuaded Ryan to stay on and head up Deutsche's new Moscow office, and he came up with a controversial strategy to tap into potentially huge Russian profits:forge relationships with state partners. He wanted, in effect, to become friends with the Kremlin. One way of doing this was to hire people with connections. Among them: Russia's most powerful banker, Andrey Kostin, who had served as a Soviet diplomat in Sydney and London. (Intelligence sources think he was a KGB spy. Like many others who spoke to me for this story, they did so anonymously because they weren't authorized to talk to the press.) In the 1990s, he became head of Vnesheconombank (VEB), a state development institution described by one former CIA analyst as the "Kremlin's cookie jar."
Then Vladimir Putin made Kostin head of Vneshtorgbank (VTB), another state-run bank, after which Kostin expanded it to operate in 19 countries.VTB worked in many countries with minimal oversight, which meant the Kremlin could use it for espionage. In 2005, VTB absorbed two banks traditionally used in Soviet times for spying and shifting currency to Western communist parties. These were the Moscow Narodny Bank, based in London, and Euro-bank, in Paris.
Meanwhile, Jain and Deutsche Bank recruited Kostin's 20-something son, Andrey. In spring of 2007, the young Kostin moved from a posting in London to Deutsche Bank in Moscow.Suddenly, Kostin's son got massive flows of business, a high-level banking source told me. And it appeared his father may have helped: Deutsche did a series of lucrative trades with VTB. According to the source, the German bank's Moscow subsidiary began posting profits of $500 million to $1 billion a year, with VTB generating somewhere between 50 and 80 percent of all revenue.
Jain came up with a controversial strategy to tap into potentially huge Russian profits: forge relationships with state partners. He wanted, in effect, to become friends with the Kremlin.
Other investment banks based in Moscow were chagrined and suspected that Deutsche owed its success to its alliance with Russian state interests. "They were doing some very curious things," says Christopher Barter, the CEO of Goldman Sachs Moscow at the time. "Nobody could make sense of their business. We found the nature and concentration of their business with VTB quite galling. Nobody else could touch VTB."Everyone in Moscow understood that VTB was more than a bank. It had ties to Russian intelligence. Putin's Federal Security Service (FSB) spy chief, Nikolai Patrushev, and his successor, Alexander Bortnikov, both sent their sons to work at VTB. The bank's deputy chief executive, Vasily Titov, chaired the FSB's public council.
VTB may have also had contacts with Trump associates, according to The New York Times. In November 2015, a few months after Trump announced he was running for president, one of his business partners, Felix Sater, wrote an email to Trump lawyer Michael Cohen, saying VTB had agreed to bankroll a Trump Tower Moscow project. Trump signed a letter of intent for the deal. When the project stalled, Cohen tried reaching out to Putin's spokesperson, Dmitri Peskov, to help jump-start it. But it ultimately failed.
Kostin, the VTB banker, says he doesn't know Sater and never had any role in the real estate deal. "We never, ever heard about this case," he told the Times. "It's absolutely wrong information; it's absolutely fake news."During those negotiations, Sater—the son of a Russian mafia boss—saw things differently. "Our boy can become president of the USA and we can engineer it," he wrote to Cohen about the Trump Tower Moscow plans. "I will get all of Putin's team to buy in on this, I will manage this process."
Shady Trades and Endless Vodka Shots
Well before Sater went looking for a deal there, the Russian capital was awash with petrodollars and opportunity. At the start of the new millennium, Moscow was an alluring destination for Western expatriates. Especially for young single males. There were the devushki—long-legged Russian girls, some from Moscow, some newly arrived from the provinces—who were keen to meet foreigners and practice their English. There were the nightclubs, the parties, fueled by toasts and endless vodka shots. And the friendships, always more intense than those at home.But there was a dark side to this new Russia—as one of those attracted by its offer of riches discovered. Tim Wiswell grew up in Old Saybrook, Connecticut, about 100 miles northeast of New York City. He was more of a repatriate than an expat: His father had worked in oil and gas in Russia. When he was 17, Wiswell spent a year at the Anglo-American School in Moscow and then returned to the United States for college. In his mid-20s, Wiswell went back to Moscow and got a job with Alfa, the private bank owned by the oligarch Mikhail Fridman.From there, he moved to Deutsche Bank. By age 29, he was head of Russian equities.
He found a Russian girlfriend—Natalia Makosiy, an art historian whom he met at a Moscow dinner party and later married.In the wake of the 2007-2008 crash, profits from the bank's Russian business plummeted. Traders were now under pressure to increase revenue. But after Wiswell took over around 2009, business was suddenly improving. And Barter suspects that "something nefarious" was going on at Deutsche during that time period.After the crash, Barter says, he was approached by "broker types, not very senior," seeking to do large, unexplained volumes of trades with Goldman Sachs.These were on behalf of major Russian clients. The brokers declined to identify their counterparties. Their names were concealed beneath "shell company after shell company," Barter says, making a due diligence impossible. He turned this business down "in five seconds."The same entities approached Wiswell and company, and got better results. Between 2011 and February 2015, Wiswell presided over a money-laundering scheme run from the equities desk of Deutsche Bank's Moscow office, according to a report from the DFS, and more than $10 billion was shifted from Russia to the West.The method was simple but effective. In Moscow, a Russian client bought blue-chip Russian stocks from Deutsche Bank Moscow in companies like Gazprom or Sberbank. The payments were in rubles. The size of a typical order was $2 million to $3 million. Shortly afterward, a non-Russian "customer" sold exactly the same number of securities to Deutsche Bank in London, paying in dollars.
[Deutsche Bank AG’s regional head office on Wall Street.] Deutsche Bank sued Donald Trump in 2008 for defaulting on a $640 million loan. Deutsche later bailed Trump out through its own private wealth division.
There was no economic logic to these "mirror trades," the DFS report found. The buyers and sellers were ostensibly different, but in reality, one in the same. At least 12 entities used the scheme to surreptitiously convert rubles into dollars. The money was interred in offshore accounts. Those involved moved billions out of one Deutsche location in Moscow to another location in New York through offshore territories such as Cyprus and the British Virgin Islands. There were nearly 6,000 of such transactions, and nobody in New York, London, Frankfurt or any other international financial centers seemed to notice.When outsiders raised concerns—like a European bank, for example—Wiswell swatted them aside. The DFS report said he told the European bank not to worry. Wiswell approved the trades with anonymous Russian clients. He "threatened" and browbeat his colleagues on several occasions, a New York regulator said, according to the report, "when it appeared they had not moved quickly enough to facilitate transactions."
In Moscow, Wiswell's 20-person equities desk was made up of Russians and Americans. One of its duties was to keep clients happy. That might mean extravagant skiing trips and visits to elite nightclubs. One of Wiswell's business (and skiing) partners was Dmitry Perevalov, the owner of a Moscow fund called Lanturno. About seven years ago, for his 40th birthday, Perevalov flew a group of people on a private jet to Mauritius. The jet belonged to the Russian Orthodox Church's most important bishop, Patriarch Kirill of Moscow, but Perevalov chartered it for the occasion. His guests stayed at the luxurious Four Seasons hotel in Anahita, on the east coast of the Indian Ocean island. Some invitees scarcely knew their host, a former bartender. Those who were his friends—including Wiswell—called him Dima.One guest who met Wiswell at the party described him as charismatic and charming, a tall, handsome, all-American guy.
This person also said Wiswell came across as a "major lightweight" in terms of banking and finance. "He had nothing special going for him. I remember him speaking pretty poor Russian. We wondered whether he was doing kosher business."Perevalov flew in a popular performer to crown his birthday celebration—the Russian rapper Timati, who gave a concert. Under a starry sky, guests danced to Timati's hit "Welcome to St. Tropez":Too much money in the bank accountHands in the airMake you scream and shout Drinks, private villas, waterskiing in the lagoon—everything was taken care of. "I was wondering: Who the fuck is paying for all this?" the guest told me. "It was crazy."Lightweight or not, Wiswell was getting rich. While the mirror trades were happening, Wiswell's wife became the owner of two offshore companies—one in the British Virgin Islands, one in Cyprus. In 2015, a counterparty paid $250,000 into her account. This was for "financial consulting." Similar payments, totaling $3.8 million, were made through two companies in Belize. These payments were "undisclosed compensation," the DFS found—"a bribe." Which bank cleared them?
Russia’s most powerful banker, Kostin, had served as a Soviet diplomat in Sydney and London. (Intelligence sources think he was a KGB spy.) Vladimir Putin made Kostin head of state-run VTB Bank, after which Kostin expanded it to operate in 19 countries.
According to journalist Ed Caesar, there were further payments made to the Wiswells. The idea of the money was "to hook you, so you are not going to do unexpected things," one Moscow broker told Caesar in an article published in The New Yorker. These payments were always made in cash and always delivered in a bag.The end of this scheme came in August 2015, when Deutsche Bank suspended Wiswell and then fired him. After that, he disappeared. There were Facebook postings from Southeast Asia and Bali, where the Wiswells went with their two small children. (He is now allegedly back in Moscow.) His lawyer, Ekaterina Dukhina, declined to comment on his case, but in his wrongful-dismissal suit against Deutsche, Wiswell said he was merely the fall guy for the bank's wrongdoing. He also claimed that around 20 colleagues, including two senior managers in London, knew all about the trades.The scandal was a grievous blow to Deutsche Bank's reputation. And an expensive one. About 10 days before Trump's inauguration, the DFS—which has the power to suspend any bank with a branch in New York—fined the bank $475 million. London's Financial Conduct Authority imposed a £163 million ($218 million) penalty. (The Justice Department and the U.S. Attorney's Office in the Southern District of New York are still investigating the bank's role in the scandal.
The bank carried out an internal review, which didn't identify the Russians behind the scheme. It's still unclear who they were or where the billions went. Or where the money came from in the first place.What is clear, however, from the DFS report and conversations with sources in Moscow is that a Kremlin bank, VTB, run by proxies of the FSB, had seemingly captured Deutsche Bank's Moscow outpost. The German bank's London and New York divisions were economic beneficiaries of this arrangement, as they facilitated the illegal flight of capital by some well-connected Kremlin insiders.While this was going on, Deutsche Bank in New York was lending hundreds of millions of dollars to the future American president, a man known to be litigious and a credit risk.My Guardian colleague Nick Hopkins and I wanted to find out if Trump's loans and the money-laundering scandal were connected. But Deutsche Bank stonewalled us; its policy was to say nothing about its clients, including the president.
The Russian Laundromat
In late 2016, that question and others led Hopkins and me to a man now at the center of Mueller's inquiry: Christopher Steele.This was before the world knew he was behind the famous dossier, raw intelligence alleging, among other things, that Russian intelligence had years of compromising information on Trump, some of it sexual in nature. Hopkins knew Steele, but neither of us were aware of what he was sitting on in that dossier.We met on a Thursday afternoon, weeks before Christmas, when London's streets were crowded with shoppers. Steele had agreed to chat over 4 o'clock tea. We tried a café and wine bar called Balls Brothers—and found a tucked-away table. I went to the bar and came back with drinks: beer for Steele, Coke for Nick, pot of tea for me.Steele clearly likes being in the shadows, away from publicity or fuss. In the world of corporate intelligence, the fewer people who know what you are doing, the better. "Have you heard of me?" he asked.I confessed I hadn't.
I knew most of the people in London who were focused on Russia, but not Steele."Good," he said. "That's how I like it."
For the next 45 minutes or so, we asked Steele about Trump's connections to Moscow.He offered helpful hints about following the money but little more.In addition to questions about Deutsche Bank, we inquired about another Russian money-laundering operation, one that involved Putin's cousin Igor. Between 2010 and 2014, Moscow bankers were sending cash out of the country through something called the Global Laundromat—a scheme that cleaned at least $20 billion, according to investigators in Moldova and the Balkans, though the true figure may be much greater.This is how it worked: Shell companies in the United Kingdom "lent" money to one another, at least on paper. Russian businesses underwrote these "loans." Company A would default on paying back Company B. Typically, a Moldovan citizen was involved. The companies would obtain a court judgment in Moldova asking the Russian firms to settle the debt.
And voilà! The Russian businesses would legally transfer hundreds of millions of dollars to a bank in Moldova's capital, Chisinau.From Chisinau, the money went to a bank in Latvia, Trasta Komercbanka. From there, the cash went everywhere, to 92 countries, much of it vanishing offshore.The Latvian bank required a corresponding Western financial institution to process its dollar-denominated transactions.
Most U.S. banks, including JPMorgan Chase, refused to offer banking services to Trasta, given the city of Riga's reputation as a European money-laundering hub. Only two Western banks agreed, according to Moldovan and Latvian investigators. Both were German: Deutsche Bank and Commerzbank. Once again, Deutsche was the entry point for criminal Russian money into the global financial system, the investigators found. (The bank severed its relationship with Trasta shortly before Latvian officials shut down the bank in 2016 for money laundering.) According to the DFS, Deutsche was reluctant to classify Russia as a "high-risk" location for money laundering.
Sergei Gorkov, chairman of Vnesheconombank (VEB Bank), which Andrey Kostin had run and whom Putin had promoted. Gorkov met directly with Jared Kushner in New York.
When Hopkins and I asked Deutsche Bank about the scandal, we were rebuffed. So we talked to current and former Deutsche Bank staff. According to one senior ex-employee, who worked in equities in Asia and New York, the bank's problems went way beyond these scams. The 2008 crash hit Deutsche Bank hard, the employee said. In order to cover up holes in the balance sheet, a few members of staff took part in risky, complex and possibly illegitimate forms of finance. These practices were extensive, the person alleged. They might have involved innovative and opaque ways of getting outside parties to underwrite risky loans, the banker added, using structures to disguise who ultimately are the lenders and the beneficiaries.Such impenetrable structures have led some to wonder whether Deutsche's unusual loans to Trump and its Russian money-laundering schemes were connected.
Adding to the intrigue: the statements of Trump's own children. In May, for instance, golf writer James Dodson said that during an interview more than three years ago, Trump's son Eric boasted that his father's company had access to Russian money. "We don't rely on American banks," Dodson said Trump told him. "We have all the funding we need out of Russia." (Eric Trump later denied he made this claim.) Years earlier, at a real estate conference in 2008, Donald Trump Jr. said, "Russians make up a pretty disproportionate cross-section of a lot of our assets." He later added, "We see a lot of money pouring in from Russia."
In an interview with Prospect magazine, Richard Dearlove, the former head of British secret intelligence service MI6, summed up the suspicions surrounding the alleged connection between Trump, Russia and Deutsche Bank. "What lingers for Trump may be what deals—on what terms—he did after the financial crisis of 2008 to borrow Russian money when others in the West would not lend to him."According to our sources inside Deutsche Bank,Trump's bid to become president made him a politically exposed person, or PEP. Banks scrutinize such individuals carefully because they're often targets for illicit financial schemes.Deutsche reviewed its lending to Trump and his relatives. Its goal was to discover if there was a Russian connection to Trump's loans. The DFS also requested information from the bank about its dealings with Russia. The sources were vague about the review, who carried it out and what its precise conclusions were. But they insist that no trail to Moscow was ever discovered.Other sources suggest the review was cursory, but Deutsche hasn't released any information about it, so there's no way to evaluate either claim. Meanwhile, Trump refuses to release his tax filings, breaking decades of precedent.
Over the past year, U.S. lawmakers such as Maxine Waters, the top Democrat on the House Financial Services Committee, have urged the bank to privately hand over its internal review—along with information about Trump's accounts—but Deutsche declined to do so, citing privacy rules.Now, nearly a year after BuzzFeed published Steele's dossier, the bank is handing records over to Mueller, as the special counsel tries to figure out if there is a connection between the Russian laundromat and the president of the United States.They Went to Jared The special counsel's inquiry could also reach people in Trump's orbit. Many were clients of Deutsche Bank—and also credit risks. Among them is Jared Kushner, Trump's son-in-law, who is trying to salvage a massive—and reportedly imperiled—investment in 666 Fifth Avenue, a prominent piece of Manhattan real estate. His relationship with Deutsche emerged in 2013, when he apparently ordered a flattering profile of Trump's wealth manager, Rosemary Vrablic, by his newspaper, The New York Observer.
In a letter this spring to Bill Woodley, Deutsche Bank's U.S. CEO, Senator Chris Van Hollen expressed concerns about the bank's lending to Kushner, who had a $25 million line of credit with the German institution. In October 2016, it loaned him $285 million. The cash was used to replace an existing loan on the old New York Times building, which Kushner had bought the previous year from Lev Leviev, a businessman from the former Soviet Union.
The bank made the loan at a time when Kremlin representatives were eager to speak to Trump's son-in-law, according to a timeline laid out in Kushner's testimony to Congress. In April, he first met Sergey Kislyak, the Russian ambassador, when Trump gave his foreign policy speech at D.C.'s Mayflower Hotel—just a handshake and pleasantries, Kushner said. Next came a meeting at Trump Tower with Natalia Veselnitskaya, the Moscow lawyer who sat down with Kushner, Manafort and Trump Jr. They talked about dirt on Hillary Clinton and repealing the Magnitsky Act, an Obama-era law that leveled sanctions against Russians accused of human rights abuses.
Then, on November 16, Kislyak got in touch again. By this point, it was clear that Kushner would become senior adviser to the president.There was another Kushner-Kislyak meeting, on December 1 at Trump Tower. Flynn, Trump's adviser, was present too, as Kushner made an unusual proposal: He asked Kislyak if it would be possible to set up a secret and secure communications channel between the Trump transition team and the Kremlin. The purpose, it seems, was to keep their conversations hidden from the outgoing Obama administration and U.S. intelligence. Could this be done, Kushner wondered, by using Russian diplomatic facilities in the United States? The inquiry was staggeringly naïve.
If Kushner or Flynn were to drop by the Russian Embassy, U.S. intelligence would certainly notice.The FBI hadn't bugged that conversation but learned of it when Kislyak reported to his superiors back in Moscow. According to FBI intercepts of those Russian communications, Kislyak was taken aback by Kushner's request. It was unlikely Moscow would allow any American to use its encrypted networks. The Trump transition team said nothing about these secret negotiations. One person who knew the details was so alarmed he sent The Washington Post an anonymous note about it, explaining what had happened.Russia, it seemed, didn't need to expend much effort to get close to Trump's aides.
Kislyak came up with a suggestion of his own, according to Kushner's testimony. Perhaps Kushner would like to meet with another person from Moscow, someone with "a direct relationship" to Putin? During a meeting between Kislyak and Kushner's assistant, Avi Berkowitz, on December 12, they agreed on the details of this meeting. Putin's emissary turned out to be a banker, or, more accurately, a banker-spy. His name was Sergey Gorkov, and he was the head of VEB, the state development bank, which Kostin had run, and whose board Putin had chaired during his four years as prime minister. He had trained in the 1990s at the FSB's academy before joining energy company Yukos and state-run Sberbank. Like VTB, Sberbank was allegedly an arm of the Kremlin. It was the official sponsor of the 2013 Miss Universe contest in Moscow, attended by Trump andhosted by Emin Agalarov, the pop-star son of Aras Agalarov, who worked with Trump to bring the pageant to Russia. Eight days after the contest, Sberbank announced it was lending Agalarov $1.3 billion to finance new projects. One of those under consideration was Trump Tower Moscow. In February 2016, Putin promoted Gorkov to VEB chief.
Deutsche Bank loaned Jared Kushner $285 million to replace an existing loan on the old New York Times building, which Kushner had bought from Lev Leviev, a businessman from the former Soviet Union. The bank made the loan at a time when Kremlin representatives were eager to speak to Trump’s son-in-law.
The bank's mission was to support Moscow's political programs. It provided capital to build facilities at the Sochi Olympics and fund secessionist rebels in eastern Ukraine. These top-down ventures lost money. VEB had large debts. The United States had included VEB, VTB and Sberbank in the sanctions it passed in 2014 after Putin annexed Crimea. And Gorkov's job was to restore the bank's fortunes.Gorkov was well prepared for his meeting with Kushner. He was, after all, a graduate of the Dzerzhinsky Higher School, a KGB training center. He flew in from Moscow bearing gifts. Among them: soil from the town of Novogrudok in northwest Belarus, where Kushner's paternal grandmother grew up. In 1941, the German army arrived, and the town's Jewish inhabitants were rounded up and forced to live and work in an agricultural college. Around half were executed. The survivors dug a tunnel, and in September 1943 they crawled out, fleeing into the forest.This information and much more would have been included in the FSB's Kushner file.
Gorkov's presents were chosen to remind the young Trump adviser of his origins in a part of the world that once belonged to the Soviet Union, and of his spiritual roots. (This subtlety was wasted. In his written testimony to Congress, Kushner said Putin's messenger had given him a "bag of dirt." It came from "Nvgorod," he wrote, spelling his grandmother's birthplace incorrectly.)
This meeting occurred on December 13, and according to Kushner, Gorkov introduced himself and "made some statements about the Russian economy." The banker said he was friendly with Putin, expressed disappointment about the state of U.S.-Russian relations under President Barack Obama and "his hopes for a better relationship" in the future, Kushner told congressional committees.There was no discussion of lifting sanctions, Kushner said. Nor was he offered any commercial deals. Kushner characterized the encounter as brief, meaningless. But there's no official record of what was said in the meeting, so this is hard to verify. After all, it was difficult to discuss the Russian economy without mentioning its depressed state. Gorkov then flew directly from New York to Japan, where Putin was attending a summit. He would likely have reported the details of the meeting then.Kushner's official account to Congress on his dealings with Kremlin representatives is 11 pages long.
It's a flat, sterile document, clearly reviewed by his lawyers. In his version, there was no wrongdoing, just a series of inconsequential meetings during a hectic campaign. Kushner said in written evidence to Congress that he even forgot Kislyak's name. There was no secret channel. Nor did he rely on "Russian funds" to finance his business. In short, a nothing burger with Russian dressing.Despite these protestations, it's clear Russian intelligence found it easy to access Trump's inner circle. Ambassadors, lawyers, bankers...all made their way to Trump Tower in 2016. All were welcomed and listened to. Gorkov was part of them, but the cast also included Kislyak, Veselnitskaya and the Agalarovs and other unknown actors working behind the scenes.
Targeting Kushner was logical. He was soon to become a federal employee. His White House portfolio included tax policy, the military and international affairs. In a protean White House—where anyone could be fired—Kushner's status as the president's son-in-law made him unfireable.
During his meetings with Russians, Kushner apparently said nothing about Moscow's attack on American democracy during the presidential campaign, nothing about hacking the Democratic National Committee or circulating fake news on Facebook, Twitter and other platforms. He also kept his meetings with the Russians secret. So did the Trump administration. In his security clearance form, Kushner didn't mention Gorkov or Kislyak. (Kushner said this was an accident, an administrative error by an underling.)The American public found out about these meetings only because of a steady stream of leaks—leaks that would eventually offer Mueller some important clues.
Ursa Major
Today, the questions Mueller is asking seem to be the same questions that led us to meet with Christopher Steele last year. Namely: Was Trump hiding a connection to Russian money? And if so, was Moscow blackmailing him with that information? And how?On the campaign trail—and well before he became a candidate—Trump's praise of Putin was effusive and unwavering. He called him a strong leader and claimed they'd spoken and gotten along well. His fidelity to Russia's president has continued in the White House, even as he lambasted other world leaders, turned on aides and allies, fired the head of the FBI and publicly humiliated his attorney general. Shunning Putin would have been the savvy political move, but he has refused to do so.
Robert Mueller, then FBI director, testifies during a hearing of the Senate Appropriations Committee’s Commerce, Justice, Science, and Related Agencies Subcommittee on Capitol Hill, on May 16, 2013. Mueller appears to be following the money, trying to determine if Trump has a financial connection to Russia.
Republicans have criticized Steele's dossier because the DNC and Clinton campaign helped pay for it. But the document offers a compelling explanation for the president's unusual behavior vis-à-vis Russia. First, there was Moscow's alleged kompromat operation against Trump going back three decades. If the president had indulged in compromising behavior, whether sexual or otherwise, Putin likely knew of it. Second,there was the cash from Russian oligarchs that went into Trump's real estate ventures—and the prospect of a lucrative deal to build a hotel and tower in Moscow, a project that was still being negotiated as Trump addressed adoring crowds on the campaign trial. Finally, there were the Deutsche Bank loans that rescued Trump after the crash. They had come from a bank that was simultaneously laundering billions of dollars of Russian money. (Though parts of Steele's dossier remain unverified, some of his claims have been substantiated. The former spy told his friends he believes the document is about 70 to 90 percent accurate.)
And then there are the people in the president's inner circle. Wherever you look, there is a link to Russia. His pick for secretary of state? Rex Tillerson, a figure known and trusted in Moscow, and recipient of the country's Order of Friendship. Former national security adviser? Flynn, a beneficiary of undeclared Russian money. Campaign manager? Manafort, longtime confidant to ex–Soviet oligarchs. Foreign policy adviser? Carter Page, whom Russia tried to recruit as a spy. Commerce secretary? Wilbur Ross, an entrepreneur with Russia-connected investments. Personal lawyer? Cohen, who sent emails to Putin's press secretary. Business partner? Sater, who sent Flynn a plan to lift Russian sanctions. And so on.It was almost as if Putin had picked Trump's Cabinet. The U.S. president, of course, did the choosing, but the pattern of all these individuals, and their alignment with Russian interests, forms a constellation. Call it Ursa Major. A big Russian bear Robert Mueller is now hunting—at Deutsche Bank and beyond.
This article was adapted from Collusion: Secret Meetings, Dirty Money, and How Russia Helped Trump Win by Luke Harding
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Deutsche Bank, a financial institution with a shady history and dubious ties to President Donald Trump, went into ‘damage-control mode’ after the 2016 election as it feared the coming scrutiny, according to a new report in the New York Times.
And now, that scrutiny has arrived.
“More than two years later, Mr. Trump’s financial ties with Deutsche Bank are the subject of investigations by two congressional committees and the New York attorney general,” the report said. “Investigators hope to use Deutsche Bank as a window into Mr. Trump’s personal and business finances.”
It also noted that while bank officials have tried to downplay the institution’s relationship to Trump, 20 current and former executives and board members told the New York Times privately that the relationship was extensive — and that the bank “repeatedly saw red flags” around its work with Trump.
The German bank has previously been fined $10 billion for its role in a Russian money-laundering scheme.
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:{Maxine Waters explains why Deutsche Bank is now cooperating: ‘Democrats are in charge’ of investigationFirst Amendment / Daily Kos
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https://www.alternet.org/news-amp-politics/failure-punish-white-collar-crime-after-2008-financial-crisis-helped-produce
auerback
In the aftermath of the worst financial crisis since the Great Depression, bank officials at HSBC admitted to the Department of Justice that the bank violated the Bank Secrecy Act, the International Emergency Economic Powers Act and the Trading with the Enemy Act. This amounted to one of the largest and most destructive money laundering and anti-terror finance sanctions-busting in history. Fines were leveled,but no senior bankers went to jail. In another investigation, the DOJ implicated :{Deutsche Bank and UBS in a bid-rigging cartel that illegally manipulated LIBOR, the most important global benchmark interest rate. Professor Bill Black estimates that the “dollar amount of deals affected by the collusion range[s] from $300-550 trillion in deals manipulated at any given time.” It was a scandal that may have been history’s largest financial crime, yet the U.S. Department of Justice refused to prosecute any of the elite bank officers involved.}:
As we approach the 10th anniversary of the 2008 crash, ProPublica’s Jesse Eisinger reminds us that no top bankers were ever “held accountable for the biggest financial crisis since the Great Depression… No one.No top officer from any major bank went to prison.” All of these instances of corporate corruption occurred well before Trump’s election. Trump stands accused of much the same. But how do you make a political case for the latter’s impeachment on the grounds of corporate corruption (even as the president virtually daily violates the Constitution’s Emoluments Clause), given the earlier reticence of multitudes of politicians, regulators, and DOJ officials to prosecute similar white-collar crimes whose impact dwarfed those allegedly committed by America’s 45th president?
It says something about the way we have (to paraphrase the late Senator Daniel Patrick Moynihan) as a society gotten very soft on criminal deviancy that the practices alleged to have been perpetrated by Trump not only in the 2016 election, but also for decades before in his real estate ventures, no longer appear to be disqualifications for the office of the presidency, let alone grounds for impeachment. The previous Obama administration’s embrace of the concept that the systemically dangerous institutions (SDIs), particularly the largest banks, whose senior officials were “too big to jail,” meant that the bankers who grew wealthy from leading the largest and most destructive fraud schemes in banking history got off scot-free.And they also created a context in which the business practices of a candidate like Donald Trump were normalized to a degree that they were considered an insufficient bar to block him from the presidency.
These facts are worth recalling in the context of the recent convictions of former Trump campaign chairman Paul Manafort on charges related to bank and tax fraud, and the guilty plea by former Trump lawyer Michael Cohen, who directly implicated the president in campaign finance law violations. As sordid as their actions were, they are small beer compared to what took place in the decade, in which a whole industry literally succumbed to an epidemic of fraud, money laundering, and other forms of malfeasance.
Of course, one shouldn’t ignore the role of the GOP in terms of fomenting this degradation of the rule of law (clearly George W. Bush’s gutting of the SEC, his refusal to devote more fiscal resources to the hiring of additional FBI field officers to investigate financial fraud, and his appointments of Goldman Sachs’ Hank Paulson and his AG, Alberto Gonzalez, all contributed to this “criminogenic environment”). However, it is largely the Democratic Party today that is seeking to position itself as a quasi-constitutional brake on this lawless presidency, which, given their minority political status, means using the courts to save the country from a descent into total constitutional anarchy. But the Democratic Party’s ongoing obeisance to its Wall Street donor class via its longstanding embrace of financial deregulation (especially prolific during the tenure of Robert Rubin as Treasury Secretary in the 1990s), and its correspondingly supine response to the consequences of said deregulation during time of the Obama administration, means that Democrats are poorly placed to mount a credible case for impeachment today on the basis of Trump’s sleazy business practices.
During the 2016 election campaign, Trump cynically exploited people’s anger at the widespread sense of a judicial system heavily tilted against the average American, as well as highlighting the unsavory alliance between the “swamp” in Washington, D.C., and Wall Street, all while reminding voters of the Democrats’ role in the financial deregulation that helped to destroy the global economy years later. Sincere or not, contrast this to President Obama’s breezy comments on the money awarded to the CEOs of JP Morgan Chase and Goldman Sachs respectively, Jamie Dimon and Lloyd Blankfein. Although Obama initially condemned the “obscene” bonuses of Wall Street “fat cats,” by 2010 Business Insider reported the president was “totally cool” with the awards to these “very savvy businessmen”:
“I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.”
The American people generally don’t “begrudge people success or wealth” if it is achieved honestly. What Obama failed to acknowledge is that the electorate was revolted when such wealth was accumulated on the back of pervasive fraud and government bailouts, or experienced a sense of things being rigged against them in their own economic lives. It is important to recall this context as we ponder the miasma of prosecutions, indictments and guilty pleas that have emerged from special independent prosecutor Robert Mueller’s ongoing investigations of the Trump administration. In aggregate, the indictments and guilty pleas have added to the overall picture that Mr. Mueller has been investigating an organized crime syndicate (albeit one as if Fredo was the only Corleone brother to survive and ended up running the show), as opposed to the administration of the so-called leader of the western world.
But have these convictions given renewed momentum toward removing Trump via impeachment? They seem to reflect business as usual in relation to the pervasive corruption that was uncovered in the aftermath of the 2008 crisis, a profoundly inconvenient fact for those who persist in the delusion that America’s institutional framework and its alleged attachment to the rule of law could prevent the descent of this country into a kind of fascist authoritarianism. The Obama presidency is now viewed fondly through the prism of the nightmare that is Trump. But what did the 44th president (or his treasury secretary, or attorney general) do when confronted with the epidemic of fraud and malfeasance that gave us the nightmare of 2008? Basically nothing. Bankers were given a “get out jail free” card. Indeed, given the persistent tolerance of the crimes of wealthy CEOs, it’s hard to believe that Paul Manafort would be the object of a criminal investigation today if he had stayed out of the 2016 presidential campaign, let alone Donald Trump.
As Eisinger has argued, the DOJ “occasionally brings charges against lower-level executives of major corporations, but hasn’t held the chief of a Fortune 500 company accountable in more than a decade,” which foamed the runway for the current occupant of the White House. In truth, such has been the degradation in the rule of law in this United States, that even now it is questionable whether white-collar crime per se constitutes a legitimate threshold to conduct impeachment proceedings. HSBC confessed to money laundering for Mexican drug cartels, and evading sanctions directed against Iran. Fines were issued (equivalent to a few quarters’ profit), but that’s it. No jail time. The GOP will no doubt shamelessly remind the Democrats of these inconvenient facts if the latter seeks to impeach Trump on that basis.
Any American who has recited the words of the Pledge of Allegiance knows that the rule of law is inextricably tied to the ideal of “liberty and justice for all.” There mustn’t be a two-tiered system: one for the wealthy, and one for the rest of us. The guilty plea of Michael Cohen was announced with great fanfare by Robert Khuzami, the current Deputy U.S. Attorney for the United States Attorney’s Office for the Southern District of New York. He proclaimed that Cohen’s conviction “serves as a reminder that we are a nation of laws, with one set of rules that applies equally to everyone.”
If Khuzami’s name rings a bell for some, it is because he was once the General Counsel for the Americas for Deutsche Bank from 2004 to 2009, and then went to the SEC as head of enforcement. In the latter position, Khuzami’s intense conflicts of interest from his previous role at DB guaranteed there would be no serious investigation of collateralized debt obligation (CDO) abuses. Indeed, his career exemplifies the revolving door culture that has characterized the D.C.-Wall Street nexus, which makes one prone to regulatory capture, and correspondingly lax when it came to prosecuting the very rule of law that Khuzami himself trumpeted in the wake of the Cohen convictions. There is a balancing act for people like Khuzami, needing (per Eisinger) “to display their dazzling smarts but also eventually needing to appear like reasonable people and avoid being depicted by the white-collar bar as cowboys unworthy of a prestigious partnership.” Even though, as Yves Smith of the economics blog Naked Capitalism noted, Deutsche Bank was patient zero of CDOs designed to fail for the benefit of subprime shorts, under Khuzami’s tenure at the SEC, the German bank attracted virtually no scrutiny. This, despite the fact that DB’s leading salesman of this toxic junk, Greg Lippmann, figures prominently in all reasonably researched accounts of pre-crisis CDOs. So much for the idea that “one set of rules… applies equally to everyone.”
:{:{...
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biggest lender to trump?
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new revelations show the close financial ties between President Trump and Justice Anthony Kennedy’s son, Justin Kennedy, who served as the global head of real estate capital markets for Deutsche Bank. The New York Times reports that under Justin Kennedy’s leadership, Deutsche Bank loaned Donald Trump $1 billion for renovation and construction of buildings in New York and Chicago, at a time when many other banks refused to lend to Trump because of his troubled financial history.
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war is boring 2:
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Direct Trump Involvement
Trump might have enough to worry about were it just for what has been described above; still, while both of the previous schemes are relevant to Trump insofar as three future Trump Campaign staff—Page, Gates, one of the most important and powerful people in his entire presidential run: Manafort—were involved in various ways in the just-outlined past criminal schemes and/or in the future acted to further the interests of Putin and his Russian government, nowwe get into territory where Trump himselfwas directly involved, and in not just one, but roughly a half-dozen situations linked to Russian organized crime.
A piece of context that is important to note for all of the following cases is that the setting for the following suspicious deals was a Donald Trump and a Trump Organization that was reeling financially.
By the mid-2000s Trump was having a hard time finding investors: he had just declared bankruptcy in 2004 for one of his major casino businesses to the tune of $1.8 billion in debt (and would declare another business bankruptcy in 2009, his fifth and sixth overall business bankruptcies, respectively) and all major Wall Street lenders—whose relationships with Trump had been souring for years—stopped offering Trump loans, in part because of his frustrating and suspicious business practices.
That is, all but one:**Deutsche Bank, yet even that relationship “frayed” starting in 2008 because of Trump’s untrustworthiness as a business partner (Deutsche itself would later become involved in major money laundering scandals involving Russia, but more on that later).
So Trump was clearly hurting for investment after that 2004 bankruptcy, and yet, somehow, by 2008, Donald Trump Jr. was able to publicly remark that “Russians make up a pretty disproportionate cross-section of a lot of our assets” and that “we [i.e., the Trump Organization] see a lot of money pouring in from Russia;” yes, this was a time when Trump was aggressively courting Russian business (it should now be obvious why Trump has not released his taxes and why that information could, and likely will be, so crucial to the investigations into his Russia ties and to the public’s evaluation of Trump).
In fact, a report from Reuters from less than two weeks ago noted how in just seven Trump luxury towers in southern Florida, 63 Russian passport/address-holders have bought $98.4 million in property; they include “politically connected businessmen and other elites,” though “none of the buyers appear to be from Putin’s inner circle;” one buyer, Alexander Yuzvik, was senior at Spetstroi, a Russian state-owned company that has done construction for Russian military and intelligence, including the G.R.U. and the F.S.B. intelligence agencies that were heavily involved the 2016 American election hackings, with Yuzvik only stepping down in March 2016, after the hacking operations had begun, though as of now, no evidence has surfaced linking him to these operations.
The above figures may even be a conservative estimate: at least 703 out of 2,044 of the units in the seven towers were owned by limited liability corporations (LLCs), often designed to mask their owners’ identities; many owners’ nationalities could not be identified; and Russian-Americans without a Russian passport/address were not included.
****
SATER
At the same time the aforementioned Eurasian gas and Manafort-led New York real estate dual schemes were taking place, and while Donald Trump was losing investors in the U.S., Trump was cultivating Russian/former-Soviet business relationships. One of his point men in these efforts was Felix Sater, the son of a mob captain of Mogilevich’s Russian mafia operation; the offices of Bayrock, Sater’s real estate company where he was Chief Operating Officer and eventually the dominant force within, were even in Trump Tower itself.
Sater, a man with a violent, criminal, mafia-rife past of his own, had himself previously been caught up in an elaborate 1990s $41 million stock fraud scheme on Wall Street that had used the Russian mob to launder money at a time, it should be noted, when Mogilevich was active in large-scale stock fraud and laundering in North America. Sater ended up assisting U.S. authorities for years, even, apparently, on CIA-related national security issues involving missile terrorism-related purchases in either Afghanistan or Russia, and the details on all this remain something of mystery: his operations with the government remain secret and the juiciest details of the Wall Street case were sealed and remain so despite repeated efforts to unseal them (they were sealed at the time, interestingly enough, by then-U.S. Attorney for the Eastern District of New York, :{Loretta Lynch, who just stepped down as U.S. Attorney General the day Trump was inaugurated president). }:
As a result, there is also virtually no information on the specifics of the Russian mafia’s activities in Sater’s Wall Street scam, but there is a reasonably good chance or even higher that Mogilevich was running the Russian mob’s involvement in it, or was at least involved, since he was actively pursuing similar schemes in the U.S. at the time, had a connection to his old capo in Sater, and since Mogilevich was already such a major figure in the Russian mob at this point, keeping in mind that hierarchy matters quite a bit in organized crime; in fact, it is far less likely that the Russian mafia would be involved without Mogilevich when considering the points just mentioned.
Now, that last point should not be taken lightly, considering that, just a few years later,Mogilevich was a primary actor in laundering billions of dollars on behalf of Firtash, Manafort, Yanukovych, and Putin; is it more or less likely that he would turn to an old connection—one with experience laundering money who had come to have the favor of the U.S. government, no less—to help with the laundering? Even without the Wall Street capers, Sater would have been an attractive candidate based on family ties alone, as would his nominal entry into real estate, as the real estate market in the U.S. has been an ideal avenue for money laundering for some time and is a top concern of U.S. officials, in part due to lax state, local, and federal laws.
Sater began working with Trump in in the early 2000s, trying to help him land real estate deals in Moscow, even showing Ivanka and Donald Jr. around the city in 2006and introducing the Trumps to influential Russians. None of these potential Moscow deals ever went through…
Criminal Scheme #3: The Trump/Sater/Bayrock Deals
But a number of deals in the United States between Trump and Bayrock produced a far more interesting—and incriminating—history.
Perhap’s Sater’s most famous partnership with Trump was an infamous deal to develop a SoHo property in Manhattan. The deal was concocted in 2006 by Trump, Sater, and two other partners from former Soviet states: one was Bayrock chairman Tevfik Arif, an ex-Soviet government official from Kazakhstan who’s rise to fortune is at least somewhat questionable; the other was Tamir Sapir from Georgia, who had decades ago established ties to numerous important Soviet officials after immigrating to the U.S., who may have very well been (once) part of—or even come to the U.S. secretly working for—the Soviet Ministry of Internal Affairs (at whose academy he had apparently studied), whose source of his wealth had long been subject to rumor-fueled suspicion, who introduced Trump to Bayrock, and whose former business partner had pled guilty to racketeering conspiracy charges spanning 13 years with the Gambino crime family (incidentally or not, at the time of the SoHo deal, it seems Sapir was not exactly mentally fit).
It turns out that the SoHo deal had a significant portion of its Sater-and-Arif facilitated financing—some $50 million specifically approved by Trumpfor it and three other projects—flow from a firm in Iceland, FL Group,linked to the Panama Papers revelations and one apparently known as a hub for the money of Russians “in favor with Putin.” Financing for these projects was also secured from **Alexander Mashkevich (or Machkevich), a Kazakhstani billionaire with a history of money laundering.
Considering Sater had helped pave the way for this investment and recalling his Mogilevich connection, it is hardly unreasonable to assume that there is a high probability that some of the money coming in from Russians was in one way or another tied directly or indirectly to the giant Eurasian gas scheme worth billions, as this period was especially a time when Russians tied to Putin and operating through Manafort, Firtash, and Mogilevich were aggressively trying to funnel money away from prying eyes of the likes of Tymoshenko. Besides the Russian financing, some of the transactions involving the property were clearly carried out by shell corporations for the purpose of laundering money, transactions from which Trump profited. Furthermore, the SoHo deal was structured to cheat the U.S. government out of tens of millions in taxes, as the investments were illegally restructured as loans (not incidentally tax-free) to avoid paying hefty taxes on them, loans that would also give FL Group a big chunk of theoretical future profits over time.
In the end, the deal went terribly for Trump, who was sued for fraud—his children Eric and Ivanka had inflated the level of interest in order to attract buyers—and in a 2011 settlement, he refunded 90% of the deposits on the building’s condos.
One must wonder why likely Russian investors were so eager to invest $50 million in this deal, and if it was an excuse to launder money, rather than an actual investment, as was the case with the Park Avenue deal involving Manafort & Co, and that model would seem to be repeated by Bayrock again and again, Repeated in deals with Trump and with Saterserving again as a point-man.
Even as construction on Trump SoHo began in 2007, another of the Trump/Bayrock projects was rising in Fort Lauderdale, Florida; this one, the Trump International Hotel & Tower, would also result in disaster and led to over a dozen lawsuits, with over 100 condo buyers suing for $7.8 million. The project was supposed to have been completed by the end of 2007 but fell way behind schedule; Sater and his Bayrock partners secretly and seemingly cashed out their stakes in this project and several others—including the SoHo deal—in a deal with the aforementioned Icelandic firm, FL Group. Trump eventually pulled his name from the project, and when its buyers learned this in May, 2009, this only increased their outrage and added to lawsuits already in motion accusing Trump and Bayrock of fraud. As in the SoHo deal, confidential settlements, this time with dozens of buyers, ensued, and Trump refused to accept any responsibility, blaming the problems on the economic crises. Florida courts declined to rule that Trump or his partners had committed fraud, including a state appeals court just last year. The project finished years late, cost some $200 million, and was eventually sold for merely $115 million at a foreclosure auction. And while the evidence of money laundering in this case is not as explicit or solid as the information publicly reported on in the SoHo deal, it is still a similarly structured deal with the same partners that led to a similarly dubious result, making it more likely, not less, that similar laundering was taking place.
Another Bayrock partnership with Trump in Fort Lauderdale (not part of the FL Group ventures) was originally conceived of as the Trump International Beach Club; an initial $2 million in capital was provided by Arif in 2003, and from that point, Sater and Arif conned a friend of Arif’s who was also Sater’s landlord, Elizabeth Thieriot, lying about the value of the club, hiding their own investment in the project, and convincing her to provide a $1 million investment for a mere 4% of the Club, 12 times what they had paid for that percentage and allowing them to make a 1,125% profit on her investment; as in the SoHo deal, they illegally labeled the investment a loan to avoid paying taxes on it and were using their fraud to hide skimming $1 million off the top; on top of that, when there was income finally generated in 2005, they defrauded their partner Thieriot of her rightful share; eventually Theiriot figured out some of what was going on and sued her scammers in court in 2006, and they pulled similar scams on other investors/members in the Club. The project was apparently eventually reconceived of as the Trump Las Olas Beach Resort, but was suspended in a declining market by Trump himself in October 2007.
Another deal among the four which received FL Group financing was a failed project that never even got off the ground in Phoenix, Arizona. Trump began eyeing the Camelback area of Phoenix, Arizona, for a luxury residential tower back in late in 2003, a project similar to the others; Trump’s team, and then Trump himself, met with the mayor, who wasn’t impressed with Trump, and at a meeting in January, 2005, when plans were unveiled, local residents showed up to argue against the development, yet by September, the appropriate city bodies had approved the plans. It seems Sater’s people organized intimidation, bribery, and deception as tactics to deter residents from gathering enough signatures to force a public referendum that could have overridden the city bodies’ approval; under this pressure, the city council voted to reverse its decision and pressed the developers and the neighborhood association to reach a compromise, at which point Trump himself abandoned the project, not wanting to be part of anything that would be scaled down any further in scope and ambition. Ernie Mennes, the owner of the Camelback property who had gone into a partnership with the Bayrock/Trump developers, sued Bayrock in 2007 in federal court, accusing Sater of both threatening to “cut off his legs and leave him ‘dead in the trunk of his car’” and of stealing money from the project for himself. The judge oversaw a settlement and the case was sealed, likely because of Sater’s special relationship with the government. This property was part of the $50 million pseudo-offloading to FL group, and by June of 2009, Bayrock was relieved of the property, which it had left $36 million in debt, when it was “sold out from under” the company at a trustee auction for a mere $10 million.
The final in the group of four projects of Bayrock tied to FL’s “investment” involved a Waterpointe property in Queens (apart from approving FL’s money, Trump was otherwise not involved). Bayrock bought the property in 2008 for $25 million, but the soil was contaminated and had to be replaced, which Bayrock did with other soil that was even more contaminated and was fined $150,000 for doing so; when Bayrock defaulted on a loan in 2011, the lender took over Waterpointe and sold it for roughly $11 million, less than half what Bayrock had paid.
As for FL Group, it failed in spectacularly 2008, along with Iceland’s other major banks/funds and many others in the world during the great global financial meltdown.
In a 2013 NY State Supreme Court lawsuit rising from a process that began in 2008, former and then-business partners of Sater’s at Bayrock—Jody Kriss and Michal Ejekam—sued Sater and his accomplices for damages and nonpayment related to Sater’s hiding of his past and his use of Bayrock primarily as a vehicle for criminal activities; in it, Donald and Ivanka Trump and the Trump Organization are named as defendants and the federal government is accused of illegally concealing Sater’s past and crimes in a way that defrauded previous victims from 1998 scam—including Holocaust Survivors—and subsequent victims of the other above schemes of many millions in restitution. The NY State Supreme Court removed the Trumps and their Organization from the suit; the plaintiffs had only sought declaratory relief in regards to the Trumps, i.e., they asked the court to determine what liability the Trumps had in regards to the case, and they were removed “without prejudice,” meaning the removal was no comment on their guilt/responsibility/innocence and that they could be sued again on the same grounds later.
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Taken together, these examples amount to catastrophic losses and colossal mismanagement on the part of Sater and Bayrock and, at the very least, gross negligence and incompetence on the part of Trump; at most, he might have been aware of some of what was going on and turned a willful blind eye, or, even worse, he might have been in on it, though no evidence exists that proves this).
Actually, the performance of Bayrock was so bad, one would not be faulted for concluding they did not care at all about performance. And that seems to be right on the mark: it seems, if anything, these schemes were designed to move large amounts of money, often Russian-tied, into temporary projects that never came to fruition, but that would benefit Sater, Trump, and others high-up in the deals, but rarely if ever the investing partners outside this upper echelon; it seems these other duped partners and especially Trump would lend an air of respectability to clearly criminal schemes that were so poorly managed that the only logical conclusion is that Sater and his friends at Bayrock did not care about the future success of the projects nearly as much as they cared about laundering money and skimming from the top. Furthermore, since FL Group was a stupendously bad performer even by the standards of the 2008 financial crisis, and given its close ties to Kremlin-connected Russian money, one could also be forgiven for thinking there was something more going on there than met the eye. We may never know all the details or whose money was laundered and for what reasons—and if I had a magic wand I’d love to see if any the Manafort/Yanukovych/Firtash/Mogilevich Eurasian gas scheme money made its way into any of these Trump ventures—but it seems clear a lot of dirty Russian money was involved.
When considering Sater, it is important to remember that he has been busted multiple times by law enforcement and yet has not served jail time in America (with the exception of one year for stabbing a man in the face with a margarita glass and severing a nerve in the man’s face, or, as Trump put it under oath, Sater “got into a barroom fight, which a lot of people do.”) and enjoys the favor of the U.S. government, suggesting he is anything but a generally and especially stupid person; also remember that Sater has a long history of money laundering.
So, in fact, once you look at the Bayrock deals and Sater assuming Bayrock’s primary reason to exist is for RICO money laundering, these deals that were once seemingly mind-bogglingly stupid all of a sudden make a lot of sense, and, in series of lawsuits beginning primarily on behalf of two of Sater’s Bayrock partners—Jody Kriss and Michael Ejekam, who weren’t in on the fun—for money they say is owed to them, Bayrock is precisely described as a RICO criminal organization, of which money laundering is one of its primary activities (in the main complaint, the word “launder” or one of its derivatives appears 39 times in the document).
Sater Saga
[biz card]
After Sater left Bayrock in 2008, none of this stopped him from being brought into the Trump Organization in 2010 as a “Senior Advisor to Donald Trump” even after Trump was made aware of Sater’s criminal past, and circumstantial evidence points to Sater still being connected to the Russian mafia. For his part, Trump has issued his typically contradictory and slippery statements—more aptly called lies—in regards to these dealings and, in particular, his relationship to Sater, with Trump lying repeatedly about his relationship with Sater and Bayrock in an attempt to falsely minimize them. And there is no distancing Trump from Bayrock: one of Bayrock’s flagship presentationsfrom as late as 2008 list its three Trump-named projects discussed above before all others and lists The Trump Organization as its first “strategic partner” (followed by FL Group), Donald Trump as its first “reference,” and “Trump Tower” in New York as its address.
The Huffington Post also recently discovered just a few days ago that Sater owns three shell companies—Global Habitat Solutions (GHS), United Biofuels Company LLC, and Sands Point Partners GP LLC—that are apparent fakes that “sell no products and have no customers,”ideal for being used to launder money; GHS had collaborated with another company named Titan Atlas in promoting itself, a company co-founded by Donald Trump Jr. and in which Trump Jr. also invested; Sater used promotional images from Titan Atlas’ website for GHS’s own after Trump Jr. introduced him to Titan Atlas’ other co-founder, Jeremy Blackburn (with an unsurprisingly troubled corporate past), and Tital is now owned by another company controlled by the Trump Organization, run by Trump Jr. since his father became president. .
Sater even donated the maximum amount allowed to Trump’s 2016 presidential campaign, and the White House is even using Sater as a back-channel diplomatic go-between for Trump’s person lawyer, Michael Cohen, and aheavily-pro-Russian/pro-Putin Ukrainian legislator, Andrii Artemenko, who are discussing a Ukraine “peace plan” being pushed by close Putin aides; Artemeno alsoclaims he has information damaging to Petro Poroshenko, Ukraine’s anti-Russian president facing off against Putin and his proxies in the Ukrainian Civil War. In an only partially-verified-by-U.S.-officials 35-page dossier on Trump and his people compiled by a respected ex-MI6 British intelligence officer, Christopher Steele, Cohen is said to have secretly met with Russian government officials during the late stages of the presidential campaign, though it is not clear if this—or what—specific information has been corroborated by U.S. officials, with journalists having been unable to thus far verify the information on Cohen, who denies playing this role.
The reason a lot of what is known about Sater and his past misdealings is publicly available, besides a then-revelatory late-2007 New York Times article, is because of the intrepid efforts of two of the lawyers who often represented plaintiffs against Sater in court: Richard Lerner and Frederick Oberlander.
Going back to that 2013 lawsuit, because Assistant U.S. Attorney Todd Kaminsky was included in these accusations for illegally aiding and covering up for Sater, U.S. Attorney for the Southern District of New York (SDNY) Preet Bharara (more on him on in a bit)ended up being involved tangentially in defending him in his capacity as a U.S. Attorney, playing a role in trying to moving the suit from the state court system to SDNY jurisdiction, but it was ultimately moved because of Sater and his ties to the government, not Kaminsky. Once in the hands of the Federal court, Kaminsky was removed without prejudice from the proceedings.
Which brings us to one of the untold stories of this election, and one which may never be told in full: how Sater’s cooperation with the government gave him government protection from being held liable in many cases for his misdeeds while also helping to suppress information about him and these misdeeds, and how, had his past and crimes been front and center over the past decade, this knowledge could have done much to derail and discredit Donald Trump, his brand and family at a time when he was building a national following with his hit show The Apprentice, which he even used to promote his fraudulent, money-laundered SoHo deal.
That the public, including Trump’s and Bayrock’s clients and customers, were kept in the dark about Sater—a fact which undoubtedly helped all of these related deals and others advance, which was not lost on partners of Sater’s, and which is at the heart of much of the legal action against Sater—and were kept in dark because Sater cooperated with the U.S. government, adds quite a what-if twist to the tale of Trump and his dramatic rise over the last decade to become the most powerful man in the world: what if the government hadn’t protected Sater, and all that evidence was out in the open while Trump and Bayrock were courting buyers and were fighting court battles? What would that have done to Trump’s reputation if he became most known for defrauding customers and money laundering with a Russian mafia-deluged violent felon, to his hit show The Apprentice (one can just imagine NBC saying “You’re fired!” to Trump), and to his political aspirations?
In a much less chaotic, less exciting world than the insanity that confronts us today, one can be sure such a salacious story involving a playboy New York tycoon would have been front, center, and dominant in national and international media coverage; lawsuits, trials, and investments may also have gone differently for Trump if such information was common knowledge, too; he may have just faded away in disgrace, or least into a sideshow, if not landing in jail.
Yes, if not for the favors the U.S. government did in protecting and, thus, abetting, Sater, it is far more likely that Trump would have collapsed in scandal than risen to be our current president. This abetting may very well be unwitting, but the two aforementioned lawyers—Lerner and Oberlander–believe differently, that the government cooperation with Sater yielded disappointing results, that Sater fooled and tricked the government into helping him in exchange for dubious assistance of questionable value and that this arrangement may have been such an embarrassment for the government that they covered up this and his past to save face and protect the careers of those involved. No court rulings have affirmed these assertions, yet it is notable that in the U.S. Supreme Court proceedings involved in arguing over Sater’s information being withheld from the public, the Court tacitly admitted that at least some of the points made by Lerner and Oberlander were valid when they ordered many of the documents surrounding Sater be made public, the only reason that much of information about him is now publicly available.
Epilogue of Intrigue
As for Arif and Mashkevich, two other major players in the whole Trump/Bayrock/FL Group saga, Arif was arrested in Turkey in September 2010 when he was at a sex party with apparently underage girls on board a Yacht (which had been once belonged to none other than Atatürk) under suspicion of running a complex prostitution andhuman trafficking ring in a scheme of which it seems Mashkevich was also a part, though Arif was later acquitted under mysterious circumstances and Mashkevich was not charged.
Going back to Trump’s sole major Wall Street lender, Deutsche Bank, since 2012, it has loaned trump over $300 million, a sum that is still owed. This amount presented a major conflict of interest for the newly inaugurated President Trump in late January 2017, because Deutsche was under investigation by the U.S. Department of Justice (DoJ) for orchestrating $10 billion in illegal fake trades from 2011-2015 that might have been part of a massive Russian money laundering scheme; U.S. and UK officials levied $630 million in massive fines against Deutsche at the end of January 2017, but DoJ was not part of this and is still investigating, raising the question of the independence and impartiality of Trump’s own new Attorney General, Jeff Sessions, himself under fire for possible improper interactions with Russian officials and forced to pledge to recuse himself from any investigations of into the 2016 election and Russian interference in it. Deutsche itself is under pressure to allow an independent investigation into Trump’s accounts with the Bank (his family also has accounts with Deutsche), even after its own investigation apparently found no link to Trump’s accounts and Russia.
It was just revealed that Deutsche was also involved in another major laundering scam of Russian money to the tune of $24 million, including the specific division that Trump owes $300 million, with the overall laundering scheme—known as the Global/(Great) Russian Laundromat—involving dozens of Western banks and a sum ranging from $20-$80 billion through the years 2010-2014; thehundreds involved in the scheme include Russia’s notorious oligarchs and Russia’s F.S.B., the main successor to the famed Soviet K.G.B. intelligence agency, with Putin having longstanding intimate ties to both and with some of the money in the scheme apparently being used to further Putin’s and Russia’s interests.
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https://www.alternet.org/news-amp-politics/heres-corrupt-financial-web-links-trump-and-kennedy-families
...What started the speculation about dirty money connecting Trump, Kennedy and his son is the revelation that Kennedy and Trump have had a longstanding relationship through their children and their children’s success. We knew about Trump’s dealings withDeutsche Bank, the only bank willing to do business with him. (It’s also, perhaps not coincidentally, the bank that seems to have the longest illegal relationship with laundered Russian money.In January 2017, it was fined $425 million by New York regulators to settle allegations that it helped Russian investors launder as much as $10 billion through its branches in Moscow, New York and London.) But we’re just finding out about the Trump relationship with Justin Kennedy, the justice’s son, who worked at Deutsche Bank for a decade.
Kennedy is bookish and abstract, while Mr. Trump is earthy and direct. But they had a connection, one Mr. Trump was quick to note in the moments after his first address to Congress in February 2017. As he made his way out of the chamber, Mr. Trump paused to chat with the justice.Media speculation about Trump’s surprising relationship with Justice Kennedy started with the New York Times:
“Say hello to your boy,” Mr. Trump said. “Special guy.”
Mr. Trump was apparently referring to Justice Kennedy’s son, Justin. The younger Mr. Kennedy spent more than a decade at Deutsche Bank, eventually rising to become the bank’s global head of real estate capital markets, and he worked closely with Mr. Trump when he was a real estate developer, according to two people with knowledge of his role.
During Mr. Kennedy’s tenure, Deutsche Bank became Mr. Trump’s most important lender, dispensing well over $1 billion in loans to him for the renovation and construction of skyscrapers in New York and Chicago at a time other mainstream banks were wary of doing business with him because of his troubled business history.
There’s more. New York is a set of villages. The Trumps and Kennedys live in the same one. As C’Zar Bernstein and Gabe Rusk wrote in a little-noticed March 2017 article:
-- At the invitation of Justice Kennedy, Donald Trump’s daughter and former businesswoman Ivanka Trump visited the High Court with her daughter to attend a Supreme Court argument.
-- According to reports, Kennedy and Ivanka had met at the congressional lunch after the inauguration.
But as Stephanie Ruhle of MSNBC has reported, Justin Kennedy left Deutsche Bank long before the money laundering and had no direct connection to the bank's loans to Trump. The more interesting fact is where Justin Kennedy went next -- he became the co-CEO of LNR Property. And that brings us straight to the most immediately vulnerable member of the Trump family, Jared Kushner.
From the New York Times, in 2012:
The Kushners' purchase in 2007 of 666 Fifth Avenue for a record price of $1.8 billion is considered a classic example of reckless underwriting. The transaction was so highly leveraged that the cash flow from rents amounted to only 65 percent of the debt service.
As many real estate specialists predicted, the deal ran into trouble. Instead of rising, rents declined as the recession took hold, and new leases were scarce. In 2010, the loan was transferred to a special servicer on the assumption that a default would occur once reserve funds being used to subsidize the shortfall were bled dry.
Instead of foreclosingon the 39-story building, which stretches from 52nd Street to 53rd Street, the lenders agreed last month to reduce the principal and defer some of the interest payments on the interest-only loan and extend its maturity for two years, until February 2019.
Vornado has taken an ownership stake in several troubled Manhattan properties. But the 666 Fifth deal raised some eyebrows because Vornado is also a part-owner of the special servicer on the loan, LNR Partners, of Miami Beach.
The plot thickens. As Bernstein and Rusk note:
-- There was a direct business relationship between LNR and Kushner Companies at the time Justin Kennedy and Jared Kushner were both CEOs. Even the future President was aware of the deal and commented on its respective merits.
-- In 2011, the year in which some of these negotiations took place, Justin Kennedy for the first time was ranked on the New York Observer’s 100 Most Powerful People in New York Real Estate at #36. Donald Trump clocked in at #12. At that time, The New York Observer was owned by Jared Kushner.
The 666 Fifth Avenue deal is generally regarded as the all-time stinker in New York commercial real estate. What did LNR see as the upside? Better question: Was there any upside? As we know, 666 Fifth Avenue went badly for the Kushners, so badly that they were scrambling for a partner. Where might one be?
The Intercept reported earlier this year that Charles Kushner, Jared's father, had discussed a financing deal for 666 Fifth Avenue with Qatarifinance minister Ali Sharif Al Emadi in April 2017. A month after that deal cratered, a group of Middle Eastern countries, with Jared Kushner’s backing, led a diplomatic assault that culminated in a blockade of Qatar. NBC News reported that Qatari government officials visiting the U.S. “considered turning over to Mueller what they believe is evidence of efforts by their country’s Persian Gulf neighbors in coordination with Kushner to hurt their country.”
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https://www.washingtonpost.com/national/kushner-firms-285-million-deutsche-bank-loan-came-just-before-election-day/2017/06/25/984f3acc-4f88-11e7-b064-828ba60fbb98_story.html?utm_term=.57934f36c238
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One month before Election Day, Jared Kushner’s real estate company finalized a $285 million loan as part of a refinancing package for its property near Times Square in Manhattan.
The loan came at a critical moment. Kushner was playing a key role in the presidential campaign of his father-in-law, Donald Trump. The lender, Deutsche Bank, was negotiating to settle a federal mortgage fraud case and charges from New York state regulators that it aided a possible Russian money-laundering scheme. The cases were settled in December and January.
Now, Kushner’s association with Deutsche Bank is among a number of financial matters that could come under focus as his business activities are reviewed by special counsel Robert S. Mueller III, who is examining Kushner as part of a broader investigation into possible Russian influence in the election.
The October deal illustrates the extent to which Kushner was balancing roles as a top adviser to Trump and a real estate company executive. After the election, Kushner juggled duties for the Trump transition team and his corporation as he prepared to move to the White House. The Washington Post has reported that investigators are probing Kushner’s separate December meetings with the Russian ambassador to the United States, Sergey Kislyak, and with Russian banker Sergey Gorkov, the head of Vnesheconombank, a state development bank.
The Deutsche Bank loan capped what Kushner Cos. viewed as a triumph: It had purchased four mostly empty retail floors of the former New York Times building in 2015, recruited tenants to fill the space and got the Deutsche Bank loan in a refinancing deal that gave Kushner’s company $74 million more than it paid for the property.
The White House, in response to questions from The Post, said in a statement that Kushner “will recuse from any particular matter involving specific parties in which Deutsche Bank is a party.” Kushner and Deutsche Bank declined to comment.
Deutsche Bank loans to Trump and his family members have come under scrutiny. As Trump’s biggest lender, the bank supplied funds to him when other banks balked at the risk. As of last year, Trump’s companies had about $364 million in outstanding debts to the bank.
Democrats from the House Financial Services Committee wrote on March 10 that they were concerned about the integrity of a reported Justice Department investigation into the Russian money-laundering matter “given the President’s ongoing conflicts of interest with Deutsche Bank,” citing “the suspicious ties between President Trump’s inner circle and the Russian government.” The Justice Department did not respond to a question about whether it is following up on the money-laundering settlement that Deutsche Bank reached with New York state regulators in December.
On May 23, the Democratic members asked Deutsche Bank to disclose what it had learned in its internal review about whether Trump may have benefited from the improper Russian money transfers. The bank refused, citing U.S. privacy laws. The Democratic letter also raised the possibility that the bank had conducted a similar review of Kushner — without mentioning his name — by referring to a review of accounts “held by family members, several of whom serve as official advisers to the president.”
The Democrats wrote that it was important to learn more about Deutsche Bank loans to Trump and family members to determine whether they were “in any way connected to Russia.”
Play Video 3:00
Untangling the web of Jared Kushner
What you need to know about Jared Kushner's ties to Russia. (Thomas Johnson/The Washington Post)
The refinancing loan with Deutsche Bank is mentioned in documents filed with the Securities and Exchange Commission as part of a public offering of mortgage-backed securities. It states that Kushner and his brother, Joshua, “will be guarantors” under what was called a “nonrecourse carve-out.” Such guarantees require more than a loan default to kick in. They are commonly known as “bad boy” clauses, a reference to how a lender could seek to hold the guarantor responsible for the debt under circumstances that might include fraud, misapplication of funds or voluntary bankruptcy deemed inappropriate. The terms of the guarantee, which generally are not secured by collateral, are negotiated between lender and borrower.
“The way to look at this is, so long as you’re not a ‘bad boy’ and don’t do anything wrong, you have nothing to worry about,” said James Schwarz, a real estate lawyer who is an expert in such clauses. “To the extent you would do something fraudulent, then you have things to worry about.”
The corporate loan and Kushner’s personal guarantee are not mentioned on his financial disclosure form, filed with the Office of Government Ethics. Blake Roberts, a lawyer who represented Kushner on the matter, said in a statement to The Post that Kushner’s form “does not list the loan guarantee” because the disclosure relied on “published guidance” from OGE that he said “clearly states that filers do not have to disclose as a liability a loan on which they have made a guarantee unless they have a present obligation to repay the loan.”
The Post sent the language cited by Kushner’s lawyer to Don Fox, a former general counsel and acting OGE director. After reviewing the wording, he said in an interview that he would have advised Kushner to disclose the personal guarantee of the $285 million corporate loan because of its size and possible implications.
“If I were still at OGE and somebody came to us with that set of facts, I would say, ‘By all means, disclose it,’?” he said, referring to “the spirit of the law.”
After being informed of Fox’s statement, Roberts contacted Fox to present his view that no disclosure was required. Fox said in a follow-up email to The Post that even if OGE “advised there was no requirement to disclose,” he would not have argued that point but “I would have nonetheless recommended Jared over report in this instance given the magnitude of the contingency and the public interest in liabilities — actual and potential — to Deutsche Bank.”
Separately, Kushner disclosed that he and his mother have a personal line of credit with Deutsche Bank worth up to $25 million.
The Deutsche Bank deal was one of the last Kushner orchestrated before joining the White House. It is among the dozens of complex transactions that he was involved with during his decade in the real estate business.
Although Kushner divested some properties in an effort to address potential conflicts, he retains an interest in nearly 90 percent of his real estate properties, including the retail portion of the former New York Times headquarters, and holds personal debts and loan guarantees.
The deal that led to the Deutsche Bank loan is rooted in a holiday party held in late 2014 at the Bowlmor bowling alley, which is located in the retail portion.
At the party, Kushner decided that the four retail floors of the building, while rundown, could be transformed into a thriving tourist destination, according to his associates.
The building passed through several owners after the newspaper sold the property for $175 million in 2004 to Tishman Speyer. Tishman sold it three years later for $525 million to a company called Africa-Israel Investments. (Those transactions prompted Trump a few months ago to poke fun at the Times, tweeting that the “dopes” at the newspaper “gave it away.”)
Africa-Israel’s decision to purchase the building was made by its chairman, an Uzbek-born Israeli citizen, Lev Leviev. He is one of the world’s wealthiest men, known as the “King of Diamonds” for his extensive holdings in Africa, Israel and Russia. He was then expanding his real estate holdings in New York City.
Leviev told the New York Times shortly after the building’s purchase that he was a “true friend” of Russian President Vladimir Putin,largely through his work with an influential Jewish organization in the former Soviet Union. The newspaper wrote that he kept a photo of Putin in his office in Israel. Leviev’s company said in a statement to The Post that Leviev “does not have a personal relationship” with Putin but has met him “on a few occasions.” Leviev’s statement said he was referring to his belief that “Mr. Putin has been a ‘true friend’ to the Jewish people in Russia.”
In 2008, a year after the building’s purchase, Leviev invited Trump to his Madison Avenue store, an ultra-high-end establishment called Leviev Jewelry, where they were photographed together, according to the Leviev statement. Leviev hoped to work with Trump on Moscow real estate deals, according to an article in Kommersant, a Russian newspaper. The Leviev statement said that the two “never had any business dealings with one another, contrary to speculation.”
Six years later, Kushner saw an opportunity for his own company.
Leviev, whose company was having financial difficulties, according to an Israeli press account, sold the building’s 12-floor office portion for $160 million, a transaction that did not involve the four retail floors.
Leviev’s daughter, Chagit, took charge of her father’s U.S. subsidiary and set out to find a buyer for the retail portion of the building. The company said it would entertain offers no lower than $300 million.
Kushner’s company offered $265 million, which was rejected. Kushner himself then negotiated with Chagit Leviev and others in 2015 and succeeded with a $296 million offer, according to an official involved in the matter.
“It was a very hard back-and-forth New York negotiating style,” said Kushner’s broker, Lon Rubackin. Leviev’s partner in the deal, Five Mile Capital, did not respond to a request for comment.
Few knew it at the time, but the negotiations were nearly consummated when Kushner and his wife, Ivanka Trump, ran into Chagit Leviev on May 4, 2015, at an after-party for a Metropolitan Museum of Art gala — an encounter that was memorialized in a picture posted on Instagram.
“Such a pleasure seeing @jaredckushner and his stunningly beautiful wife @ivankatrump last night [at] the #metballafterparty,” Chagit Leviev wrote.
The deal was signed a week later and closed in October 2015. The Leviev company said in a statement to The Post that Kushner simply made the highest offer and “there was no political element to the transaction.”
Kushner took over a property that was only 25 percent leased, according to a company official. His company recruited tenants, offering some a year’s free rent to lock in long-term contracts, according to an SEC filing. As a result, the building was nearly fully leased, with higher rents, including new tenants such as National Geographic.
The strategy paid off when Kushner’s company went to Deutsche Bank for refinancing.An appraisal cited in SEC filings for the package of mortgage-backed securities placed the value at $470 million, a 59 percent increase in a year. The bank declined to release the appraisal, but a person involved in the deal said that such a rapid increase was unusual when New York real estate was rebounding from recession, and credited Kushner for finding stellar tenants.
In a statement, Kushner Cos. President Laurent Morali said the property’s value increased sharply “for a simple reason: the building’s dramatic turnaround. We had a vision for the property when we purchased it that no one else had, and are proud to say that we executed on it.”
Kushner’s company took out $370 million in new loans in October 2016, giving it $74 million more than the purchase price a year earlier. Along with $285 million from Deutsche Bank, Kushner’s firm received $85 million from SL Green Realty, where Kushner had once worked as an intern. SL Green spokesman Rick Matthews said the deal made sense because the building has been mostly leased, giving it “increased value.”
The Deutsche Bank loan was delivered just before the bank — which has long been under investigation by federal and state authorities — agreed to pay a $7.2 billion U.S. penalty in December for mortgage securities fraud in its packaging of residential mortgages. The bank also paid a $425 million New York state fine in January for failing to properly track large transfers from Russia.
Democrats on the House Financial Services Committee wrote in their March 10 letter that because “press reports indicate” the Justice Department is continuing to investigate the money- laundering case, they are “concerned about the integrity of this criminal probe” in light of Trump’s “ongoing conflicts of interest with Deutsche Bank.” Bloomberg News has reported that the Justice Department has requested records related to money laundering from Deutsche Bank as part of a probe.
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http://www.rawstory.com/2010/09/disney-monsanto-discovered-blackwaters-hidden-clients/
on list: Royal Caribbean, Deutsche Bank, Chevron
Almost three years ago exactly — Sept. 17, 2007 — a cadre of guards from the security firm then known as Blackwater shot and killed 17 Iraqis at a public plaza in Baghdad.
The company, long in the public eye, has been known for brutal tactics and as a mercenary for the US State Department in countries where the US has boots on the ground. What hasn’t been known, however, is that the same company was handling intelligence ops for publicly-traded US companies.
Atop the list is Monsanto, the biotech giant, who The Nation’s Jeremy Scahill revealed Wednesday accepted a proposal through a Blackwater subsidiary which “offer[ed] to provide operatives to infiltrate activist groups organizing against the multinational biotech firm.”
Monsanto doesn’t stand alone. Through a network of 30 subsidiaries and shell corporations, Blackwater-linked entities provided “intelligence, training and security services” to a cache of major multinational firms, including: Monsanto, Chevron, the Walt Disney Company, Royal Caribbean Cruise Lines, Deutsche Bank and Barclays, according to documents Scahill obtained.
Blackwater’s owner and founder, Erik Prince — who has himself been linked to the CIA — helped train companies through two other firms he controlled: Total Intelligence Solutions and the Terrorism Research Center.
Perhaps unsurprisingly, no one responded to requests for comment.
Monsanto topped the list of firms using Prince’s services, Scahill writes.
“According to internal Total Intelligence communications, biotech giant Monsanto—the world’s largest supplier of genetically modified seeds—hired the firm in 2008–09,” the reporter writes. “The relationship between the two companies appears to have been solidified in January 2008 when Total Intelligence chair Cofer Black traveled to Zurich to meet with… Monsanto’s security manager for global issues.”
“After the meeting in Zurich, Black sent an e-mail to other Blackwater executives…. saying that Wilson “understands that we can span collection from internet, to reach out, to boots on the ground on legit basis protecting the Monsanto [brand] name…. Ahead of the curve info and insight/heads up is what he is looking for.” Black added that Total Intelligence “would develop into acting as intel arm of Monsanto.” Black also noted that Monsanto was concerned about animal rights activists and that they discussed how Blackwater “could have our person(s) actually join [activist] group(s) legally.” Black wrote that initial payments to Total Intelligence would be paid out of Monsanto’s “generous protection budget” but would eventually become a line item in the company’s annual budget. He estimated the potential payments to Total Intelligence at between $100,000 and $500,000. According to documents, Monsanto paid Total Intelligence $127,000 in 2008 and $105,000 in 2009.
….In an… e-mail to The Nation, Wilson confirmed he met Black in Zurich and that Monsanto hired Total Intelligence in 2008 and worked with the company until early 2010. He denied that he and Black discussed infiltrating animal rights groups, stating “there was no such discussion.” He claimed that Total Intelligence only provided Monsanto “with reports about the activities of groups or individuals that could pose a risk to company personnel or operations around the world which were developed by monitoring local media reports and other publicly available information. The subject matter ranged from information regarding terrorist incidents in Asia or kidnappings in Central America to scanning the content of activist blogs and websites.” Wilson asserted that Black told him Total Intelligence was “a completely separate entity from Blackwater.”
Walt Disney?
The Walt Disney Company hired Total Intelligence and TRC to do a “threat assessment” for potential film shoot locations in Morocco, with former CIA officials Black and Richer reaching out to their former Moroccan intel counterparts for information. The job provided a “good chance to impress Disney,” one company executive wrote. How impressed Disney was is not clear; in 2009 the company paid Total Intelligence just $24,000.
And Deutsche Bank?
Total Intelligence and TRC also provided intelligence assessments on China to Deutsche Bank. “The Chinese technical counterintelligence threat is one of the highest in the world,” a TRC analyst wrote, adding, “Many four and five star hotel rooms and restaurants are live-monitored with both audio and video” by Chinese intelligence. He also said that computers, PDAs and other electronic devices left unattended in hotel rooms could be cloned. Cellphones using the Chinese networks, the analyst wrote, could have their microphones remotely activated, meaning they could operate as permanent listening devices. He concluded that Deutsche Bank reps should “bring no electronic equipment into China.” Warning of the use of female Chinese agents, the analyst wrote, “If you don’t have women coming onto you all the time at home, then you should be suspicious if they start coming onto you when you arrive in China.” For these and other services, the bank paid Total Intelligence $70,000 in 2009.
Prince, now the owner of Blackwater successor Xe Services, has his eyes on another target: the Democrats.
He’s now writing a book alleging that officials in the Clinton and Obama administrations “approved of his most sensitive and controversial operations,” according to a report by veteran intel reporter Jeff Stein published in *The Washington Post* earlier this month.
The Post‘s Jeff Stein cited two unnamed sources who say Erik Prince, the founder of Blackwater, is hurrying to sell his company before he can go public with a book that takes aim at the Democratic Party. One of the sources told Stein that Prince and his friends “think this will destroy the Democratic Party in the elections.”
The source, who is described as having a “business relationship with Xe,” said Prince had “given his people three weeks to complete the sale of the company and the book will be released then,” in time for the November elections.
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Big Bank Receives Adorable Mini Fine
Reuters | Posted 02.18.2013 | Business
Read More: Deutsche Bank, Video, Deutsche Bank Fined, Deutsche Bank 2012, Deutsche Bank Fraud, Reuters, Big Bank Fine, Bank Fine, Business News, Big Banks, Business News
By Jed Horowitz Dec 19 (Reuters) - A U.S. regulator fined Deutsche Bank Securities $1.25 million and censured it for overstating the ...
Read Whole Story
Deutsche Bank To Pay $550 Million In Tax Shelter Fraud Case
Posted 05.25.2011 | Business
Read More: Deutsche Bank, Deutsche Bank Fraud Investigation, Justice Department's Tax Division, Deutsche Bank Fraud, U.S Tax Losses, Business News
NEW YORK (AP, By LARRY NEUMEISTER) - Federal authorities say Deutsche Bank has agreed to pay more than $550 million to resolve a federal tax shelter f...
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Senate Probes Goldman, Deutsche Bank For Mortgage Meltdown Fraud
Wall Street Journal | By JOHN D. MCKINNON | Posted 05.25.2011 | Business
Read More: Deutsche Bank Mortgage, Senate Probe Banks, Goldman Sachs Fraud, Deutsche Bank Fraud, Senate Investigation, Goldman Sachs Mortgage, Senate Probe Meltdown, Mortgage Meltdown, Mortgage Market Meltdown, Business News
WASHINGTON -- A Senate panel has subpoenaed financial institutions, including Goldman Sachs Group Inc. and Deutsche Bank AG, seeking evidence of fraud...
Read Whole Story
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Deutsche Bank's $10-Billion Scandal - The New Yorker
www.newyorker.com/magazine/2016/08/29/deutsche-banks-10-billion-scandal
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The Kings of the Desert · The Bank Robber · Ed Caesar
Amost every weekday between the fall of 2011 and early 2015, a Russian broker named Igor Volkov called the equities desk of Deutsche Bank’s Moscow headquarters. Volkov would speak to a sales trader—often, a young woman named Dina Maksutova—and ask her to place two trades simultaneously. In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented. Usually, the order was for about ten million dollars’ worth of the stock. In the second trade, Volkov—acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands—would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros. Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself.
At first glance, the trades appeared banal, even pointless. Deutsche Bank earned a small commission for executing the buy and sell orders, but in financial terms the clients finished roughly where they began. To inspect the trades individually, however, was like standing too close to an Impressionist painting—you saw the brushstrokes and missed the lilies. These transactions had nothing to do with pursuing profit. They were a way to expatriate money. Because the Russian company and the offshore company both belonged to the same owner, these ordinary-seeming trades had an alchemical purpose: to turn rubles that were stuck in Russia into dollars stashed outside Russia. On the Moscow markets, this sleight of hand had a nickname: konvert, which means “envelope” and echoes the English verb “convert.” In the English-language media, the scheme has become known as “mirror trading.”
Mirror trades are not inherently illegal. The purpose of an equities desk at an investment bank is to help approved clients buy and sell stock, and there could be legitimate reasons for making a simultaneous trade. A client might want to benefit, say, from the difference between the local and the foreign price of a stock. Indeed, because the individual transactions involved in mirror trades did not directly contravene any regulations, some employees who worked at Deutsche Bank’s Russian headquarters at the time deny that such activity was improper. (Fourteen former and current employees of Deutsche Bank in Moscow spoke to me about the mirror trades, as did several people involved with the clients. Most of them asked not to be named, either because they had signed nondisclosure agreements or because they still work in banking.)
Viewed with detachment, however, repeated mirror trades suggest a sustained plot to shift and hide money of possibly dubious origin. Deutsche Bank’s actions are now under investigation by the U.S. Department of Justice, the New York State Department of Financial Services, and financial regulators in the U.K. and in Germany. In an internal report, Deutsche Bank has admitted that, until April, 2015, when three members of its Russian equities desk were suspended for their role in the mirror trades, about ten billion dollars was spirited out of Russia through the scheme. The lingering question is whose money was moved, and why.
Deutsche Bank is an unwieldy institution with headquarters in Frankfurt and about a hundred thousand employees in seventy countries. When it was founded, in 1870, its stated purpose was to facilitate trade between Germany and other countries. It soon established footholds in Shanghai, London, and Buenos Aires. In 1881, the bank arrived in Russia, financing railways commissioned by Alexander III. It has operated there ever since.
During the Nazi era, Deutsche Bank sullied its reputation by financing Hitler’s regimeand purchasing stolen Jewish gold. After the war, the bank concentrated on its domestic market, playing a significant role in Germany’s so-called economic miracle, in which the country regained its position as the most potent state in Europe. After the deregulation of the U.S. and U.K. financial markets, in the nineteen-eighties, Deutsche Bank refreshed its overseas ambitions, acquiring prominent investment banks: the London firm Morgan Grenfell, in 1989, and the American firm Bankers Trust, in 1998. By the new millennium, Deutsche Bank had become one of the world’s ten largest banks. In October, 2001, it débuted on the New York Stock Exchange.
Although the bank’s headquarters remained in Germany, power migrated from conservative Frankfurt to London, the investment-banking hub where the most lavish profits were generated. The assimilation of different banking cultures was not always successful. In the nineties, when hundreds of Americans went to work for Deutsche Bank in London, German managers had to place a sign in the entrance hall spelling out “Deutsche” phonetically, because many Americans called their employer “Douche Bank.”
In 2007, the bank’s share price hit an all-time peak: a hundred and fifty-nine dollars. But as it grew fast it also grew loose. Before the housing market collapsed in the United States, in 2008, sparking a global financial crisis, Deutsche Bank created about thirty-two billion dollars’ worth of collateralized debt obligations, which helped to inflate the housing bubble.
In 2010, Deutsche Bank’s own staff accused it of having masked twelve billion dollars’ worth of losses. Eric Ben-Artzi, a former risk analyst, was one of three whistle-blowers. He told the Securities and Exchange Commission that,had the bank’s true financial health been known in 2008, it might have folded, as Lehman Brothers had. Last year, Deutsche Bank paid the S.E.C. a fifty-five-million-dollar fine but admitted no wrongdoing. Ben-Artzi told me that bank executives had incurred a tiny penalty for a huge crime. “There was cultural criminality,” he said. “Deutsche Bank was structurally designed by management to allow corrupt individuals to commit fraud.”
Scandals have proliferated at Deutsche Bank. Since 2008, it has paid more than nine billion dollars in fines and settlements for such improprieties as conspiring to manipulate the price of gold and silver, defrauding mortgage companies, andviolating U.S. sanctions by trading in Iran, Syria, Libya, Myanmar, and Sudan.
Last year, Deutsche Bank was ordered to pay regulators in the U.S. and the U.K. two and a half billion dollars, and to dismiss seven employees, for its role in manipulating the London Interbank Offered Rate, or libor, which is the interest rate banks charge one another. The Financial Conduct Authority, in Britain, chastised Deutsche Bank not only for its manipulation of libor but also for its subsequent lack of candor. “Deutsche Bank’s failings were compounded by them repeatedly misleading us,” Georgina Philippou, of the F.C.A., declared. “The bank took far too long to produce vital documents and it moved far too slowly to fix relevant systems.”
In April, 2015, the mirror-trades scheme unravelled. After a two-month internal investigation, the three Deutsche Bank employees were suspended. One was Tim Wiswell, a thirty-seven-year-old American who was then the head of Russian equities at the bank. The others were Russian sales traders on the equities desk: Dina Maksutova and Georgiy Buznik. Afterward, Bloomberg News suggested that some of the money diverted through mirror trades belonged to Igor Putin, a cousin of the Russian President, and to Arkady and Boris Rotenberg. The Rotenberg brothers own Russia’s largest construction company, S.G.M., and are old friends of Vladimir Putin. They are on the U.S. government’s list of sanctioned Russians, which was compiled in response to Putin’s aggression in Ukraine. According to the U.S. Treasury, the Rotenbergs have “made billions of dollars in contracts” that were awarded to their company by the Russian state, often without a transparent bidding process. (Last year, S.G.M. was awarded a contract worth $5.8 billion to build a twelve-mile bridge between Russia and Crimea.)
In June, 2015, with pressure from shareholders intensifying over the mirror trades and other scandals, the co-C.E.O.s of Deutsche Bank, Anshu Jain and Jürgen Fitschen, announced that they would resign. They were replaced by John Cryan, whose remit was to clean up the bank. That September, he announced the impending close of all investment-banking activity in Russia. When the Moscow investment bank shut down, in March, the remaining employees threw a “going out of business” dinner at a restaurant near the office. By the end of the evening, bankers were dancing on the bar.
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Corruption Currents: Deutsche Bank's $10 Billion Scandal - Risk ... - U.S.
blogs.wsj.com/.../2016/08/22/corruption-currents-deutsche-banks-10-billion-scandal/
Aug 22, 2016 - Deutsche Bank's Russian desk helped move $10 billion offshore through a ... A daily roundup of corruption news from across the Web. We also ...
Bribery, corruption and fraud - Deutsche Bank Corporate ...
https://cr-report.db.com/2015/en/conduct/.../bribery-corruption-and-fraud.html
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Seven Ex-Deutsche Bank Managers Guilty in C02 Tax-Fraud Case ...
www.bloomberg.com/.../seven-ex-deutsche-bank-managers-convicted-in-c02-tax-fra...
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Deutsche Bank Fraud - Huffington Post
www.huffingtonpost.com/news/deutsche-bank-fraud/
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Banks cull accounts in fight against corruption - Financial Times
https://www.ft.com/content/123550f6-16d7-11e6-9d98-00386a18e39d
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'Enhanced Repos' the Latest Corruption Exposed at Deutsche Bank
www.larouchepub.com/pr/2016/161006_enhanced_repos.html
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bne IntelliNews - Deutsche Bank Russia boss "to retire" amid bribery ...
www.intellinews.com/deutsche-bank-russia-boss-to-retire-amid-bribery-probe-98840/
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Fresh corruption scandal engulfs Deutsche Bank - EUobserver
https://euobserver.com/economic/122404
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The Moral Crisis Behind Deutsche Bank's Russia Scandal - The ...
www.the-american-interest.com/.../the-moral-crisis-behind-deutsche-banks-russia-scan...
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