UPDATE: Since this story was published, the owner of the building in deal involving Felix Sater, has been identified as Andrey Rozov, a Russian developer involved in negotiations with Donald Trump in 2015 to build Trump Tower Moscow. Below is the original story published before Rozov was revealed as the mystery owner.
In 2017 I stumbled across an intriguing scoop — real estate filings showing that Felix Sater was involved in a 2015 Manhattan real estate deal with a Russian-born NYC accountant named Ilya Bykov. A colleague shared research with me showing links Bykov had to: 1) Prevezon companies related to the money laundering scheme uncovered by Sergei Magnitsky, 2) Larisa Markus who was convicted of embezzling $2 billion from Russia’s Vneshprombank, and, 3) Parason Inc., a company identified by the OCCRP as part of the Russian Laundromat. Last week The Guardian reported on Prevezon and Markus in a story that revealed that Ilyas Bykov has worked for Russian billionaire Aras Agalarov.
Donald Trump has repeatedly said he has nothing to do with Russia. One example that the statement is false is that Aras Agalarov paid almost $20 million to partner with Trump to host the Miss Universe pageant in Moscow in 2013. The Agalarov-Trump relationship continued through the presidential election, when Aras Agalarov, his son/singer Emin and publicist Rob Goldstone were involved in arranging a June 9, 2016 Trump Tower meeting attended by Donald Trump Jr., Paul Manafort and Jared Kushner with several Russians who were promising ‘dirt’ on Hillary Clinton. One meeting attendee was Ike Kaveladze, an executive at Aras Agalarov’s company Crocus Group.
Last month Buzzfeed reported that a few days after the June 9, 2016 meeting in Trump Tower, Aras Agalarov wired $19.5 million to the U.S. through BVI-based Silver Valley Consulting. The Guardian story revealed that in May 2016, shortly before the Trump Tower meeting, Aras Agalarov’s accountant Ilya Bykov set up Delaware registered Silver Valley Consulting, which was related to the $19.5 million transaction reported by Buzzfeed.
With the new reporting on Aras Agalarov’s accountant Ilya Bykov, and his connection to Prevezon and the Vneshprombank fraud case, it’s intriguing that in 2015 Bykov was also affiliated with Felix Sater as they represented the same anonymous shell company in a New York City real estate deal. There is a mystery regarding who they represented, and there’s no indication the deal is connected to the Trump-Russia investigation, nor any evidence of wrongdoing.
However, Felix Sater was involved in the NYC real estate deal in December 2015, the same month he was negotiating the Trump Tower Moscow deal with Michael Cohen on behalf of Donald Trump. The NYC real estate deal concluded with a sale that was $8 million (over 20%) above the purchase price a year earlier. Following is information on this newly reported real estate transaction involving Felix Sater and Ilya Bykov, and expanded context on their backgrounds and business networks.
(Note that Sater did not respond to several requests for comment for this story and I was not able to reach Bykov. The information reported is all from open source data cited in links which are highlighted in blue.)
One striking result of the Trump-Russia collusion investigation has been exposure of a vast network of politicians, billionaire oligarchs and mafia-connected businessmen with a proclivity for laundering money through shell companies and real estate deals. Trump is the quintessential real estate mogul with shady connections, the sort exemplified by his former business partner and ex-felon Felix Sater. Now, property documents reveal Felix Sater worked alongside a Russian-born NYC accountant who is connected to several significant Russian money laundering cases — and to Aras Agalarov who, like Sater, is a central figure in the Trump-Russia story.
At the end of 2015, Felix Sater and Trump’s then lawyer Michael Cohen were discussing a deal to put a Trump Tower in Moscow. “Our boy can become president of the USA and we can engineer it,” Sater wrote in an email. “I will get all of Putins team to buy in on this, I will manage this process.” That same month Sater also represented the owner of a midtown Manhattan office building at 22 West 38th Street, in a sales transaction worth $43.5 million. Sater signed the sales deed as a representative of 22 West 38th Street Associates, LLC. In prior financial transactions that year the building owner was represented by Russian-born New York City accountant Ilya Bykov.
Fluent in English and Russian, Ilya Bykov was born in Moscow and moved to New York City in 1979. He became a citizen in 1985, and in 1986 graduated from New York University and established his accounting company in the financial district of Manhattan where his current and prior office addresses connect to companies involved in several Russian money laundering cases.
For decades Bykov has represented many famous Russian clients including model Irina Shayk, musician Igor Krutoy, fashion designer Valentin Yudashkin, and billionaires Oleg Baibakov and Alexander Lebedev who owns the London Evening Standard and The Independent in the U.K., and 49% of Russian newspaper Novaya Gazeta. Bykov has helped his clients purchase real estate at the Plaza Hotel, the Time Warner Center, and other prime locations.
In 2011, Bykov told reporters from The Seattle Times that his Russian clients “have the money and they always want the best in everything. Most of these people are buying pied-a-terres and it’s quite common that the person would buy a luxury apartment in New York and a condo or penthouse in Miami.”
In 2010 Ilya Bykov represented Igor Krutoy (aka Igor Kroutoi), a famous Russian composer, in his search for an apartment in the Plaza Hotel and helped provide legal representation for Krutoy to purchase a mansion in South Hampton. Krutoy is close friends with Emin Agalarov who performed at Trump’s Miss Universe contest in Moscow in 2013, which Krutoy also attended and where he was photographed with Donald Trump.
In 2010 Krutoy started discussions with the Trump Organization and Ivanka Trump about developing an entertainment complex and Trump hotel in Riga, Latvia. In 2014, as part of a major criminal inquiry in Latvia, the government’s anti-corruption bureau made inquiries into Krutoy’s business deal and contacted the FBI for assistance. According to the Guardian, Latvian investigators examined secret recordings in which Trump was mentioned by a suspect. The Latvian real estate deal with Igor Krutoy revealed the FBI was looking into Trump’s business deals earlier than previously known. Krutoy, who was not accused of any wrongdoing, has continued to work with Ilya Bykov, registering one of his companies as recently as April 2017 at Bykov’s Protax office address.
The Organized Crime and Corruption Reporting Project, a consortium of investigative organizations based in Eastern Europe, tracked billions of dollars pumped out of Russia in what is known as the Russian Laundromat, and found that $8.3 million was received in 2014 by Delaware corporation Parason Inc. The shareholders, directors, and officers of Parason are not disclosed, but OCCRP reported that the address for Parason was the office address of Ilya Bykov.
By coincidence, the building where Bykov’s company has been located since 2011, was previously owned by Kushner Companies and its partner, CIM Group, from June 2013 to March 2016.
Prevezon Money Laundering Case
In 2008 Russian auditor Sergei Magnitsky was arrested and later died in prison, after an investigation for Bill Browder’s investment advisory company Hermitage Capital led Magnitsky to accuse the Russian government of sanctioning the takeover of three Hermitage companies, which then reclaimed $230 million in “overpaid taxes.” Some of the refunded tax money was allegedly laundered through Cyprus-based Prevezon Holdings, Ltd. and used to purchase stakes in four Dutch subsidiaries of Africa Israel Investments (AFI), owned Lev Leviev, an ally of Putin. Leviev was also a business partner with Jared Kushner and in October 2015 sold a $295 million stake in the Old New York Times Building to Kushner Companies.
According to the complaint filed by the U.S. Attorney for the Southern District of New York, from 2009 to 2011 some of the allegedly laundered funds were used by Prevezon companies to purchase eight New York City properties, including five units at 20 Pine Street, owned by the U.S. subsidiary of Leviev’s AFI.
Some of the Prevezon companies have addresses c/o Gabriella Volshteyn, a Brooklyn-based lawyer, who represents Prevezon on all of the NYC real-estate transactions. And according to NY State Division of Corporations records and ACRIS real estate records many Prevezon companies are also listed at the old and new address for Bykov’s business.
According to the recent story in the The Guardian:
“During an interview earlier this year, Bykov first suggested that the Prevezon he worked with was a different company using a similar name, which was “selling some electronics.” But he later confirmed his firm “provided bookkeeping and tax services for a short period of time” for the Prevezon pursued by the US government.”
The Prevezon companies had appeared in the 2013 complaint alleging money laundering filed by former U.S. District Attorney Preet Bharara, which was dismissed in a 2017 settlement, in which Prevezon did not admit guilt. Bharara was fired by Trump in February 2017, shortly after taking office. A year later, Prevezon still has not paid their settlement, but in a March 2018 court filing agreed to pay using escrowed funds from the seizure and sale of the NYC properties.
Bloomberg reported in September that, while the Prevezon case was settled, a separate criminal investigation into the laundering allegations was underway.
The lawyer Natalia Veselnitskaya, who represents Denis Katsyv, the owner of Prevezon Holdings Ltd., attended the July 2016 meeting in Trump Tower with Donald Trump, Jr., Jared Kushner and Paul Manafort. Ike Kaveladze, who works for Aras Agalarov, also attended the meeting with Veselnitskaya.
Bykov has denied any involvement in Prevezon’s alleged wrongdoing.
Vneshprombank $2 Billion Embezzlement
Ilya Bykov has had a significant business relationship with Larisa Markus who was sentenced by Russian authorities to nine years in prison for embezzling over $2 billion.
Since 2008, Larisa Markus, who co-owned Russia’s Vneshprombank, set up companies through Bykov’s company that were allegedly used to launder bank money through New York real estate. Vneshprombank was considered a “VIP bank,” holding accounts of important officials like Sergei Ivanov (former Chief of Staff of the President), Sergey Shoigu (Minister of Defense), Dmitry Kozak (Deputy Prime Minister), and Rosneft, Rosneftgas, Transneft, the Russian Orthodox Church, and the Russian Olympic Committee.
In December 2015 — the same month as the sale of the West 38th Street building that Bykov and Sater had represented — Russia’s central bank reported a 187.4 billion ruble ($2.3 billion) “hole” in the accounts of Vneshprombank. On December 22, Larisa Markus was arrested by Russian authorities. Her brother, Georgy Bedzhamov, who co-owned the bank, fled Russia, and was arrested in Monaco in April 2016. The next month he was released on bail; the paper Novaya Gazeta reported that Russian oligarch Dmitry Rybolovlev, who resides in Monaco, helped obtain his release. Monaco announced it would refuse an extradition request from Russia, and Bedzhamov became a fugitive. In May of 2017, his sister was sentenced in a Moscow court to nine years in prison.
Bykov, who was appointed as the manager of Markus’s U.S.-based business affairs, has continued to transact real estate deals on behalf of Markus even after her arrest and conviction. Bykov was part of an unsuccessful October 2017 court motion to block Russian investigators from looking into the banking transactions associated with Markus’s properties. The motion was argued by lawyer Marlen Kruzhkov, who was involved with Ilya Bykov in the 22 West 38th Street building deal, where his name appears on the 2014 purchase deed.
In another coincidence, another law firm representing Vneshprombank in the same case has a connection to Trump: Bruce Marks and his firm Marks & Sokolov LLC also represented the Donald J. Trump for President Campaign.
Given Bykov’s vast network of Russian clients, from celebrities to billionaires to convicted felon Larisa Markus, it may not be surprising that his path crossed with ex-felon and former Trump associate Felix Sater.
An enigmatic character, Felix Sater was born in the Soviet Union and at the age of eight moved to Brighton Beach, Brooklyn where his father allegedly had mafia ties. After a bar fight at the age of 27, Sater served jail time, and a few years later, after opening an investment firm, he was charged with racketeering and money laundering. Sater avoided jail by serving for ten years as an informant, providing the FBI with information on members of the Italian mafia, La Cosa Nostra, and Stinger missiles on the loose in Afghanistan.
In 2003, Sater became an executive of the Bayrock Group, a development and investment company founded two years earlier by Kazakh businessman Tevfik Arif. The company began developing Trump Soho in 2007. There has been extensive coverage of Sater and his work with Trump and the Bayrock Group and, in recent months, special counsel Robert Mueller’s investigation has been reportedly examining the financing of the 46-story hotel condominium for possible money laundering.
While Trump had claimed in a 2013 deposition that he didn’t even know what Sater looked like, as recently as 2010 Sater — who had resigned from Bayrock in 2008 — occupied an office just two floors beneath the Trump Organization in Trump Tower, he had a Trump email address and business cards that called him “SENIOR ADVISOR TO DONALD TRUMP.”
Trump has insisted he has had no business dealings with Russia. But in 2005 the Trump Organization had an exclusive one year deal with Bayrock and Felix Sater to explore building a Trump Moscow Tower. In 2013, when Trump visited Moscow for the Miss Universe pageant, he had discussions with Aras Agalarov about building a Trump Tower in Moscow. And in December 2015 Felix Sater and Trump’s ex-lawyer Michael Cohen were “pursuing a plan to develop a massive Trump Tower in Moscow.”
According to Michael Cohen, the 2015 project (similar to the previous ones) was never realized. But during that time frame, Sater did close a different real estate deal in New York City.
Sater, Bykov and 22 West 38th Street Associates, LLC
The same month that Felix Sater was urging Trump to come to Moscow, records show that he and Ilya Bykov represented the same company, which was simultaneously finalizing the $43.5 million sale of a midtown Manhattan office building.
A year prior, in December 2014, the company “22 West 38th Street Associates, LLC” purchased a 12-floor office building on West 38th Street in New York City’s Garment District for $35.35 million. The 2014 purchase deed filing was signed by Ilya Bykov for 22 West 38th Street Associates, LLC.
When 22 West 38th Street Associates, LLC sold the building for $43.5 million in December 2015 to Manhattan real estate investment firm Dalan Management, the sales deed was signed by Felix Sater. In one year, the company Bykov and Sater both represented, and its mystery owner, made an estimated $8 million or 22% increase over the purchase price.
The seller of the 22 West 38th Street building was represented by Ron Solarz and Nataliya Stelmakh at Eastern Consolidated and Elena Borokhovich of OneWorld Property Advisors.
An article in The Real Deal noted that the seller for 22 West 38th Street was “an affiliate of Alvin Jacobson Realty.” However, Alvin Jacobson Realty had sold the building to 22 West 38th Street Associates LLC in the prior transaction in December 2014.
In 2013 when Donald Trump was in Moscow for the Miss Universe pageant, he was in discussions with Aras Agalarov about building a Trump Tower in Moscow:
The elder Mr. Agalarov had been talking with Mr. Trump about building a Trump Tower in Moscow as part of a $3 billion real estate project involving hotels, a shopping center and office space.
Then in 2015, Felix Sater and Michael Cohen pursued discussions about a Trump Moscow deal. Two of Trump’s business partners who had been involved with discussions about a Trump Tower in Moscow — Felix Sater and Aras Agalarov — both had business interactions in 2015 and 2016 with accountant Ilyas Bykov.
There is no indication that Bykov has any connection to Trump or to any part of the Trump-Russia investigation or that he is involved in any wrongdoing.
The beneficial owner of the company, 22 West 38th Street Associates LLC, represented by Bykov and Sater may be connected to one of the many Russian-related clients Bykov has worked with previously. One thing is clear — this newly uncovered NYC real-estate deal provides a revealing example of how anonymous shell companies can mask the identities of beneficial owners — many based in other countries, and many who keep their identities secret to hide the flow of money into the United States.
End note: I found the deal through an image posted by TradedNY and assumed that Felix Sater’s name was listed because it was on the sales deed — not because he was the seller (although he is presented as the seller in the image).