A Guardian investigation has established a series of overlapping ties and relationships involving alleged Russian money laundering, New York real estate deals and members of Trump’s inner circle. They include a 2015 sale of part of the old New York Times building in Manhattan involving Kushner and a billionaire real estate tycoon and diamond mogul, Lev Leviev.
The ties between Trump family real estate deals and Russian money interests are attracting growing interest from the justice department’s special counsel, Robert Mueller, as he seeks to determine whether the Trump campaign collaborated with Russia to distort the outcome of the 2016 race. Mueller has reportedly expanded his inquiry to look at real estate deals involving the Trump Organization, as well as Kushner’s financing.
Kushner will go before the US Senate intelligence committee on Monday in a closed session of the panel’s inquiry into Russian interference in the election in what could be a pivotal hearing into the affair.
Leviev, a global tycoon known as the “king of diamonds”, was a business partner of the Russian-owned company Prevezon Holdings that was at the center of a multimillion-dollar lawsuit launched in New York. Under the leadership of US attorney Preet Bharara, who was fired by Trump in March, prosecutors pursued Prevezon for allegedly attempting to use Manhattan real estate deals to launder money stolen from the Russian treasury.
The scam had been uncovered by Sergei Magnitsky, an accountant who died in 2009 in a Moscow jail in suspicious circumstances. US sanctions against Russia imposed after Magnitsky’s death were a central topic of conversation at the notorious Trump Tower meeting last June between Kushner, Donald Trump Jr, Trump campaign manager Paul Manafort and a Russian lawyer with ties to the Kremlin.
Donald Jr and Manafort have been called to testify before the Senate judiciary committee on Wednesday, at which they are certain to face questions about the Trump Tower encounter.
Two days before it was due to open in court in May, the Prevezon case was settled for $6m with no admission of guilt on the part of the defendants. But since details of the Trump Tower meeting emerged, the abrupt settlement of the Prevezon case has come under renewed scrutiny from congressional investigators.
Four Russians attended the meeting, led by Natalia Veselnitskaya, a lawyer with known Kremlin connections who acted as legal counsel for Prevezon in the money laundering case and who called the $6m settlement so slight that “it seemed almost an apology from the government”. Sixteen Democratic members of the House judiciary committee have now written to the justice department in light of the Trump Tower meeting demanding to know whether there was any interference behind the decision to avoid trial.
Constitutional experts are also demanding an official inquiry. “We need a full accounting by Trump’s justice department of the unexplained and frankly outrageous settlement that is likely to be just the tip of a vast financial iceberg,” said Laurence Tribe, Harvard University professor of constitutional law.
Separately, the focus of investigators on Trump family
finances stem from the vast flow of Russian wealth that has been poured
into New York real estate in recent years. As Donald
Trump Jr put it in 2008, referring to the Trump Organization:
“We see a lot of money pouring in from Russia.”
Among the overlapping connections is the 2015 deal in which Kushner paid $295m to acquire several floors of the old New York Times building at 43rd street in Manhattan from the US branch of Leviev’s company, Africa Israel Investments (AFI), and its partner Five Mile Capital. The sale has been identified as of possible interest to the Mueller investigation as Kushner later went on to borrow $285m in refinancing from Deutsche Bank, the German financial house that itself has been embroiled in Russian money laundering scandals and whose loans to Trump are coming under intensifying scrutiny.
Court documents and company records show that AFI was cited in the Prevezon case as a business partner of the defendants. In 2008, Prevezon entered a partnership with AFI in which Prevezon bought for €3m, a 30% stake in four AFI subsidiaries in the Netherlands. Five years later, AFI tried to return the money to the Russian-owned company, but it was intercepted and frozen by Dutch authorities at the request of the US government as part of the Prevezon money-laundering investigation.
In Manhattan, Leviev’s firm also sold condominiums to Prevezon Holdings from one of its landmark developments at 20 Pine Street, just a few blocks from Wall Street.
Real estate brochures describe the lavish interior decor of the condominiums, replete with bathrooms bedecked in stone and exotic woods, and boasting “the ultimate in pampering; a sybaritic recessed rain shower”. The 20 Pine Street apartments that Leviev sold to Prevezon were later frozen by US prosecutors seeking to block the flow of what they alleged to be money stolen from the Russian treasury and laundered through New York real estate.
Prevezon’s 20 Pine Street apartments and €3m in assets were all released as part of the settlement in May 2017.
The Guardian contacted both Kushner and Leviev for comment, but they did not immediately respond.
The pursuit of Prevezon Holdings for alleged money laundering took on enormous political significance as it unfolded. For the prosecutors, it was a test case over suspicious Russian money flows designed to show the US was serious about going after money launderers. For the Russians, it was an opportunity to push back against stringent US sanctions that had long infuriated the Kremlin.
In court documents, US prosecutors accused Prevezon and its sole shareholder, Denis Katsyv, of participating in the laundering of proceeds of the vast tax fraud that stole $230m from the Russian treasury and moved it out of the country in chunks. Prevezon was alleged to have received some of the fraudulent spoils through a network of shell companies, hiding the money by investing in Manhattan real estate including the Leviev condominiums in 20 Pine Street.
Prevezon and Katsyv have consistently denied any involvement in money laundering and have dismissed the lawsuit as “ill-conceived”. In a statement released at the time of the settlement, they said they had “no involvement in or knowledge of any fraudulent activities”.
Magnitsky discovered the massive tax fraud, said to be one of the largest in Vladimir Putin’s Russia, in 2007. After he blew the whistle on the scam, he was arrested by the same officials whom he had accused of covering up the racket and imprisoned, dying in jail having been denied medical treatment.
Magnitsky’s death led to a political backlash in the US that in turn spawned tough sanctions on Russia, known as the Magnitsky Act. Russian individuals associated with the lawyer’s demise and other human rights abuses were banned entry to the US.
Veselnitskaya not only acted as Prevezon’s Russian counsel in the money-laundering case, she also was a leading lobbyist against the Magnitsky sanctions. She raised the subject prominently at the meeting in Trump Tower with Don Jr and Kushner, though according to Veselnitskaya the president’s son-in-law left after 10 minutes.
By the time of the Trump Tower meeting, Veselnitskaya was already personally acquainted with Russia’s powerful prosecutor general, Yuri Chaika, and her lobbying against the Magnitsky sanctions had drawn significant attention in government circles.
“Natalia’s main role was coordinating, including regular coordination with Chaika, whom she knew personally,” said a source acquainted with the Prevezon case.
Veselnitskaya told the Guardian: “My meeting with Trump’s son was a private meeting; nobody in the government had anything to do with it.” She declined to answer a follow-up question about whether and how she knew Chaika.
Jamison Firestone, the founder of the Russian law firm that employed Magnitsky at the time that he exposed the fraud, said that Veselnitskaya clearly intended to use the Trump Tower meeting to lobby against the Magnitsky sanctions. “They really made it a state priority to get rid of these sanctions,” he said.