27 Mar 2019
Kazakhstan’s BTA Bank JSC has filed a lawsuit accusing a New York real estate developer of helping to launder tens of millions of dollars through a Trump-branded property and other U.S. businesses.
The complaint, filed Monday in the Southern District of New York, alleges that wealthy Kazakh businessman Ilyas Khrapunov worked with longtime Trump ally Felix Sater in the mid-2000s to launder a portion of the $4 billion purportedly stolen from the bank a decade ago by its former chairman and Khrapunov’s father-in-law, Mukhtar Ablyazov.
Sater helped Khrapunov invest the stolen funds in an allegedly fraudulent Port Washington, NY-based medical startup, a Syracuse, NY-based mental health facility and a Cincinnati-based shopping mall, despite knowing that a United Kingdom court had issued a worldwide freezing order on any funds linked to Ablyazov, according to the complaint.
The pair also laundered more than $3 million as down payments for three units in the Trump SoHo project, which Sater and his firm Bayrock LLC were helping to develop, BTA said.
Sater, who is scheduled to testify this week in a closed door meeting of the U.S. House Judiciary Committee, characterized BTA’s allegations as “baseless,” according to Bloomberg, which first reported on the lawsuit Monday.
Ablyazov, who was convicted in absentia by a Kazakh court in 2018 for purportedly ordering the murder of BTA President Erzhan Tatishev, has repeatedly denied allegations against him, claiming that they are politically motivated and stem from his ongoing feud with Nursultan Nazarbayev, Kazakhstan’s head of state until his resignation earlier this month.
According to BTA’s lawsuit, Ablyazov’s alleged embezzlement came to light in the wake of the 2008 global recession, when the bank defaulted on most of its more than $10 billion in loans received from Credit Suisse, Morgan Stanley, Royal Bank of Scotland and others.
Under the direction of Ablyazov and facing mounting pressure to repay its debts, BTA began financing real estate projects in Russia and Ukraine and loaned out large sums to suspicious offshore companies, according to the lawsuit and a 2009 story by The New York Times. The billions of dollars in BTA loans disappeared and Ablyazov fled to London following the institution’s collapse, the bank said.
With the aid of his son-in-law, Ablyazov later funneled nearly $440 million to accounts at the now-defunct FBME Bank before laundering the money in various investments, BTA said. The U.S. Treasury Department deemed FBME a “primary money laundering concern” in 2014 for its purported role in helping organized crime groups and others hide their illicit wealth.
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