DEALS & DEALMAKERS

Judge unseals $250M tax fraud case involving Trump projects


  • BY REW
  • • JULY 14, 2016



A Manhattan judge has just unsealed documents in a civil tax fraud case connected to Donald Trump’s real estate projects. The lawsuit points to an alleged conspiracy to launder $250 million of profit from projects such as Trump SoHo in New York City. It named Felix Sater, a former Trump senior adviser who has an earlier conviction for stock fraud, Sater’s firm Bayrock Group and law firms Kramer Levin, Roberts & Holland and Duval & Stachenfeld as defendants.

“This is an important case because it not only exposes how Bayrock, while developing Trump SoHo in New York, Trump International in Fort Lauderdale, and Trump Camelback in Phoenix in association with Mr. Trump, took advantage of Delaware secrecy to arrange to siphon most of the profits out of the country untaxed, it also exposes how major law firms were willing to facilitate it,” said Frederick Oberlander, one of the lawyers representing the State’s claim.

Trump is currently considered a material witness and has not been found culpable. However, state representatives said that new information “may significantly change that calculus.”

“Mr. Trump gave his consent to the transaction after receiving a full set of documentation which made clear that without it the deal would not go through.

The extent of his involvement and any culpability will become clear in the course of the case. At this time, it seems that he benefited indirectly as a partner alongside Sater and Bayrock,” said attorney Richard E. Lerner.

The suit claims that Bayrock tried to avoid paying $100 million dollars in state and federal income taxes.

The company was said to have done so by bringing in a foreign partner that they hid behind a Delaware shell company. This allowed Bayrock to disguise the profits given to the foreign partner as debt repayments to a US lender.

The lawsuit been kept under seal since it was filed. It is now before New York State Supreme Court Judge James d’Auguste.

Trump himself is facing a separate lawsuit in New York State over Trump University. The case, which started in 2013, accused Trump of defrauding people through real estate seminars that cost thousands of dollars to attend. That lawsuit unfolded as a federal lawsuit was being argued in California. That case became controversial because of Trump’s racially-charged comments against US District Court Judge Gonzalo Curiel.

http://rew-online.com/2016/07/14/jud...rump-projects/
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