Trump’s Mafia-linked Advisor Felix Sater Kept Millions From His Crime Victims With FBI’s Help
Recently unsealed federal court records reveal that former Trump Organization senior advisor Felix Sater landed an illegal, sweetheart deal on sentencing from the Eastern District of New York’s federal judges and prosecutors in 2009.
It is still unclear why his cooperation agreement was extended for many years by the feds, even after they knew that Sater was violating the terms of his cooperation by committing further acts of fraud.
What is entirely clear, is that Felix Sater’s sentencing violated multiple federal laws that require notice to victims and cash restitution for their losses.
Federal prosecutors and the sentencing judge, I. Leo Glasser, illegally allowed him to keep the proceeds of a multiple mafia-linked, major financial felony racketeering scheme, with full knowledge of the situation.
That’s because his federal probation officer was instructed not to ask Sater the whereabouts of his ill-gotten gains, or about skimming millions from Bayrock’s victims, who thought they were buying the Trump brand and had no idea, it was being peddled by a financial felon.
However, we do know for certain that Felix Sater knew he owed restitution to his victims because he agreed to pay them back in writing as part of his plea deal, as this newly unsealed, redacted passage of court record about his pre-sentencing report for major white-collar crime highlights.
One of Felix Sater’s co-conspirators in a massive Wall Street pump-and-dump scheme — a man named Gennady Klotsman — blew the whistle on Sater’s felony conviction to the New York Times in 2007.
Klotsman was a co-equal in Sater’s stock pump-and-dump scheme run from the Trump Offices at 40 Wall Street (and amazingly also a witness to his first felony, a brutal, unprovoked beating).
Gennady Klotsman also testified as a cooperating witness against 19 other mobsters but got the worst end of the deal.
For his role in Sater’s crimes, Gennady Klotsman was sentenced to pay $40 million in victim restitution in addition to 6 years in jail many years prior, just as Sater should’ve been sentenced in 2009 under the ‘joint and several liability’ provisions of the federal racketeering law, whereby each member of a criminal racket is considered equally liable for damages. In the end, Klotsman landed in a Russian prison for running a 2010 diamond heist, and the Kremlin desperately wishes to trade him to America for imprisoned notorious arms dealer Viktor Bout.
Just as a judge has no power to go against the black letter of the law, such as mandatory minimum sentencing laws, they cannot ignore two federal laws compelling notice to victims, their opportunity to be heard in court at sentencing hearings, and mandatory restitution by criminals to their victims.
In Felix Sater’s case, Judge Glasser was obligated to comply with the Mandatory Victims Restitution Act (MVRA) and with the 2004 Crime Victims Rights Act, which mandates that courts give crime victims proper notice and the right to be heard at sentencing.
Sater’s 1998 plea deal was arranged by top federal prosecutor Andrew Weissmann, who in 2010 remarked that “I’ve seen guilty pleas under seal. I’m not sure I’ve ever seen sentencing under seal,” when Texas prosecutors arranged one for the Mexican cartel boss who founded the bloody Zetas gang. Weissmann is better known these days for his current role as a prosecutor in Special Counsel Mueller’s Russia probe.
But a secret sentencing hearing also happened in New York for Felix Sater.
Judge Glasser had zero discretion, obligated by the law to impose a restitution order of $40 million, but instead, he illegally abdicated his judicial responsibilities.
Sater’s secret conviction on a secret court docket led to a virtually secret sentencing 11 years after the fact, and it was all sealed, and kept under seal by the full force of the federal government acting outside the laws Congress wrote.
Attorney General Loretta Lynch was the Eastern District of New York’s US Attorney during the fight to keep Sater’s records sealed.
She was forced to personally answer about Sater’s unusual sentencing to Senator Orrin Hatch (R-UT) in sworn testimony (page 142) during her 2013 confirmation hearings.
Ultimately, Lynch deflected the questions about Sater’s unusual sentencing, even in writing, claiming national security interests.
Amazingly, Felix Sater’s father Michael Sater aka Michael Sheferovsky also obtained a sweet plea deal with the federal government, which he entered into just a couple of years after his son’s cooperation agreement was signed.
Sater’s father is a known Russian mafia associate of Semion Mogilevich but seems to have had a smaller portfolio of crimes than the son.
But he too didn’t have to pay restitution because the court agreed when the prosecutors argued that his victims were either dead or also criminals while ignoring the MVRA’s requirement to pay restitution to the rightful heirs of the deceased.
Michael Sater’s records were only unsealed eight years after his sentencing to probation, and fourteen years after originally entering into a plea bargain to tell the FBI about mob activities, including his 2006 sentencing hearing transcript.
It appears that Sater’s father perfected the son’s method of becoming a cooperating witness to abscond with the proceeds of a crime — and stay out of jail — by strategically snitching, then getting prosecutors and judges to keep it all secret.
While we do not know if Michael Sater committed more crimes while cooperating with the FBI, none have surfaced since then.
However, Federal Judge I. Leo Glasser’s sentencing of Felix Sater to a small fine and no restitution very plainly violated the Constitutional separation of powers between Congress, with the Judiciary acting in concert with the Executive Branch’s Department of Justice and FBI agencies to evade the law.
If the FBI wanted to pay Felix Sater millions for his cooperation, they should’ve used their budget to compensate his victims, or asked Congress for an appropriation to do so.
Instead, Felix Sater’s victims funded a secret government program built on his activities, which we, the public, know virtually nothing about, except that the secrecy enabled him to go from a 60 million dollar fraud, on to something much, much larger with Donald Trump as a knowing co-conspirator from 2008 onwards.
New York federal judges throw the First Amendment to the wind
A group of New York federal judges abandoned ample case law, precedents and the public’s First Amendment right to view court dockets in the Sater case.
In their zeal to hide records which can be obtained elsewhere, they accidentally revealed their own cover-up.
The last relevant redaction highlights applied by Judge Chen to Sater’s case show the federal court system’s urgent efforts to stymie the First Amendment rights of attorneys Richard Lerner and Fred Oberlander, who uncovered the web of secrecy surrounding Donald Trump’s business partner.
In effect, Sater was permitted to ‘make crime pay’ by the FBI, Department of Justice and a federal judge who violated the black letter of the law believes “Richard Roe” — that is, Fred Oberlander — the party who first sought to unseal these records. “Justice Brandeis said that sunshine is the best disinfectant of all,” says Oberlander, “and today the sun is shining a little brighter on the activities of Felix Sater and his enablers.”
“It’s a bedrock principle of law that once something is made public,” attorney Richard Lerner told me, summarizing the case law from his 10,000-word article in Law360.com by LexisNexus about court secrecy, “it can’t be sealed later, and kept secret by a court.”
“Period.”
This means that Judge Chen shouldn’t have attempted to redact the material used in this filing, but Felix Sater’s attorney Robert S. Wolf celebrated her censorship activities. Wolf told me by email:
“The 2nd Circuit Court of Appeals upheld Judge Pamela Chen’s earlier decision which was adverse to the media outlets and journalists and continued to keep everything sealed that the government and Mr. Sater requested to remain sealed including his Pre-Sentence Report.”
Federal judges even ordered Oberlander and Lerner not to tell Congress about the secret proceedings with Sater — an unheard of abrogation of their First Amendment rights — which has kept judicial and prosecutorial lawbreaking from the only other branch of government capable of checking the first two.
“Throughout the case against Felix Sater — at the request of his attorneys and federal prosecutors — judges have rubber-stamped their demands inexplicably,” says attorney Richard Lerner, who gave up a lucrative law partnership to pursue this case, and whose efforts led to the initial unsealing of Sater’s record by the Supreme Court. “The Second Circuit and Eastern District federal judges ordered public information to be buried forever, and for me to never discuss his organized crime racket.”
“If I speak out,” says Lerner, “the judges have threatened to jail me.”
Oberlander is still similarly threatened by the heavy hand of the Eastern District of New York’s apparently unlawful demands for secrecy in court, but he continues to fight for full transparency.
“No matter what remains to be unsealed in the future,” says Oberlander who was gagged by federal judges when he attempted to tell Sater’s story to The Daily Beast. He says:
“The American public always wins when truth triumphs over deceit and openness triumphs over secrecy.”
Felix Sater’s spectacularly unusual secret criminal proceeding raises the specter of an obstruction of justice racket operating in the New York federal court system.
Judges have no legal authority to abrogate the black letter of the law as set down by Congress, and federal agencies like the FBI or CIA have no lawful mechanism to deliver stolen funds to cooperators, no matter how important their information is deemed to be.
However, that is precisely what happened with Felix Sater, who agreed to pay restitution to his victims in a written agreement, but instead got to keep the proceeds of his crime, and to go out and steal more with Donald Trump’s brand and family real estate company as his partner.
“We know that Sater is another Whitey Bulger of financial crimes already,” Yale global justice fellow and New York attorney James S. Henry told me, “he really has been profiting from all of these crimes, right up to the minute.”
Part three of this three part series:
