Posted in: Europe

A Tale of Two Russias

By | December 23, 2017

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It’s the ‘70s, and you’ve taken the B train to Brighton Beach, Brooklyn and now find yourself transported to the Soviet Union without having paid for airfare. You see old Russian women standing in scarves, selling potato pierogies, and yelling at you in Russian. You find Russian bookstores, pharmacies, groceries, and restaurants that serve up borscht and lard on black bread. You sit down in one of these restaurants—Cafe Arbat, a local hotspot sheltered underneath the train tracks—and find yourself amidst big-bellied Russian men in leather jackets and caps, playing cards, smoking and discussing their various shenanigans. Many of these men helped establish the Russian mob in the United States.

Throughout the last decades of the 20th century, as key figures fell by murder or imprisonment, the flood of Russian emigres produced a constant supply of new mobsters that filtered in with the crowds. Many such mobsters and businessmen found their shelter in the properties of the Trump organization. In exploring the various ties several Russian mobsters had with the Trump organization in the past three decades, new questions arise about the extent and the implications of President Donald Trump’s connection with Russia. We may find answers by looking back to the ‘90s, to Brighton Beach with its Russian gangsters crowded around dimly-lit tables, smoking cigarettes and eating caviar.

Organized Crime Grows Up

The collapse of the Soviet Union and the emergence of a market economy in Russia paved the way for rampant corruption and illegal activity in Russia’s new capitalist government and economy. Rapid privatization and price liberalization gave Russian oligarchs the perfect opportunity to step in and take over Russia’s private sector. The collapse of an organized, functional government gave the oligarchs significant autonomy and power to go about their schemes. Many eventually stepped into official governmental and political positions themselves.

Now that the oligarchs commanded both economic and political power, organized crime and the state became inherently linked through the oligarchy. A strong, connected, and rather official Russian mafia network came into being. Then-president Boris Yeltsin even admitted that Russia had become a “mafia state.” As the new and improved mafia blossomed and gained strength, it expanded across the Atlantic the free and lucrative market of the United States.

Organized crime members from Moscow, Odessa, Kiev, and other major cities stationed their partners in New York, Miami, and Los Angeles to expand their interests globally. Feeding off both the Russian and American market, a mobster of a very different nature came about––one who knew how to operate in a global economy. These new, hybrid mobsters had their warm, homey stations in Brighton Beach that reminded them of their lives back in the Soviet Union. Across the East River in Manhattan, many also owned million-dollar condos in Trump Tower.

Cleaning Dirty Money

Our tale begins with David Bogatin, who in the ‘80s was involved in one of the largest gasoline bootlegging schemes in American history. Despite having left Russia with $3 in his pocket, he soon personally bought five luxury condos in Trump Tower, for the price of six million dollars. Those apartments often sat empty and unoccupied, as they were employed as covers to turn Bogatin’s “dirty money into clean money,” according to the New Republic

What Bogatin did wasn’t unique; it was actually a trend popular among Russian mobsters. Ivankov, another prominent Brighton Beach mobster, also bought a condo in the Trump Tower. Seva Kaplan, a Russian journalist and radio host at Davidson Radio, attributed the Trump organization’s popularity among Russians to its acceptance of “anonymous buyers” in an interview with the HPR. Kaplan explained that “the [New York] skyline gradually became the ruble’s laundromat,” a seemingly legitimate place to invest mob-connected money.

In 2013, Vadim Trincher was arrested in New York City for his involvement with an international racketeering and gambling ring. Trincher owned a condo on the 63rd floor of Trump Tower.  The entire operation was said to have been run under the protection of Russian mafia don Alimzhan Tokhtakhounov, who’d been infamously indicted a decade earlier for having conspired to fix the ice-skating competition in the 2002 Winter Olympics. This same Tokhtakhounov was a guest judge in none other than Trump’s 2013 Miss Universe pageant in Moscow.

Turning Dirty Money into Trump Money

The most notable of the money-cleansing schemes linked Trump directly to the world of Russian mobsters in New York. Two companies, the Sapir Organization and Bayrock, came together to finance the building of Trump Soho, a modern, luxury hotel in one of New York City’s hippest areas in 2002. Trump was promised 18 percent from the deal in exchange for his label.

The Sapir Organization was led by now-deceased billionaire Tamir Sapir and his son Alex Sapir. Tamir, a Georgian immigrant, came to New York in the ‘70s and earned his living as a taxi-cab driver. Through various Soviet connections, Sapir began selling electronics. He used his earnings from the electronics business to invest in oil contracts in Russia, and later went into the real-estate business in Manhattan. His past and the concrete sources of his wealth are murky and muddled in scandals. In 2010 he was arrested under the laws of the Endangered Species Act aboard his yacht decorated with exotic animals.

The other company in the scheme, Bayrock, was founded by Russian immigrant Tevfik Arif in 2002 and allegedly financed by laundered  money. Felix Sater, a major partner in Bayrock was the most questionable figure in this partnership. In 1991, he stabbed a fellow Wall Street broker with a margarita glass in a bar. After serving a year in prison, Sater got involved in a $40 million “pump and dump” stock fraud scandal. In order to avoid imprisonment, Sater became an informant for the FBI. As a majority shareholder in Bayrock working out of Trump SoHo, Sater continued to launder millions using his investments as a protective shield.  

It all went downhill when a Bayrock insider, Jody Kriss, sued the company in 2008 for its alleged criminal activities. Kriss claimed that, “Donald was always in charge” in relation to the Bayrock company. This leads us to wonder, how much Trump truly knew about the under-workings of Bayrock. Ultimately, Bayrock broke apart in 2010 when Arif was busted for heading a prostitution ring, and Trump Soho was foreclosed and resold. As for Trump, he made a $3 million dollar profit from the dissolution.

The Making of a Mafia State, from Russia to America

Felix Sater of Bayrock had a childhood friend, Michael Cohen, who later became Trump’s personal attorney. In 2015, the release of leaked emails revealed conversations between Sater and Cohen that hinted at a political agenda. Sater wrote in an email to Cohen, “I will get all of [Vladimir] Putin’s [sic] team to buy in on this, I will manage this process … I will get Putin on this program and we will get Donald elected.” Perhaps Sater and Cohen saw something beyond financial schemes in their relationships with Trump—they were entering what looked more like the oligarchical territory of Russia. These statements were made by Sater to Cohen in 2015, at a time when election-talk and campaign planning was in full swing. Whether their statements turned out to be true or not, the fact that they were discussed in a circle so close to Trump is disconcerting.

Indeed, “there was a clear attempt to interfere by Putin himself in the presidential election” and “Trump himself has been bizarrely, conspicuously not only silent but actually complimentary about the the Russian president,” according to Calder Walton, a post-doctoral fellow at Harvard’s Kennedy School. The investigations into collusion between the Trump campaign and the Russian government during the 2016 election are ongoing and have not yet produced any damning evidence. However, one could see why Trump and his Russian acquaintances might get along. In the words of Kaplan, Trump “fits a profile of a Russian oligarch: greedy for money, power and celebrity status.”

Image Credit: David Hawgood/Wikimedia Commons

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