Dispatch November 17, 2017

Global Witness Report: Trump Ocean Club, Money Laundering, and the Russian Mafia

Today, Global Witness, a London-based non-profit focused on exposing corruption, released a report finding that Donald Trump made millions of dollars from a deal licensing his name to a development in Panama that was used to launder drug money from drug cartels. While Trump may not have deliberately sought to benefit from this criminal activity, Global Witness finds that he “seems to have done little to nothing to prevent this.” The report also finds that some of the Trump Ocean Club investors were allegedly linked to the Russian Mafia, and it seems as though Trump’s “willful blindness” may have landed him in bed with illicit Russian money.

The Trump Ocean Club appears to have been built for the purpose of laundering money — and the Trump Organization seems to have looked the other way, ignoring many ‘red flags’.

  • According to Alexandre Ventura Nogueira, one of the principal brokers responsible for a reported third to half of the units sold, “most of his clients never intended to live in the Trump Ocean Club.” NBC reported that, even years after its opening, “the Trump Ocean Club appeared to be largely empty, with virtually no one in the restaurants at night. The hallways were consistently empty. The lights were off in many of the units after dark.”
  • These, according to Adam Davidson, are clear hallmarks of a project built not for the purpose of generating long-term profit, but primarily to launder money.  Discussing similar Trump Organization projects in Azerbaijan and Georgia on Slate’s “Trumpcast,” Davidson said, “They don’t seem like they were anything like a real business, and as one money-laundering expert explained it to me, that’s usually the biggest giveaway, because money laundering is the profit.”
  • The Trump Organization doesn’t seem to have cared: According to Nogueira, “Nobody asked me: Who are the customers? Where did the money come from?” Panama has been regarded as a hotbed for money laundering for years, and omission of these questions signals “willful blindness,” or intentional avoidance of knowledge that may later prove incriminating. Davidson describes “willful blindness” as “either knowing that you’re breaking the law or it’s so obvious that not knowing was a deliberate act” when it comes to money laundering.

The Global Witness report reinforces Trump’s long history of doing business with Russians, including those tied to organized crime.

  • Ventura Nogueira, the broker, claimed that “50 percent of his buyers were Russian,” and he later learned that some of these individuals were allegedly linked to the Russian Mafia. In fact, several of Nogueira’s real estate sales people were from the former Soviet Union, suggesting the Russian buyers were intentionally targeted.
  • In interviews with NBC and Reuters, Nogueira suggested that Ivanka Trump, who was extensively involved with the Panama project, was aware he was selling to the Russian buyers.
  • Trump met with some of these Russian investors in person, posing for a photo Andrey Bogdanov and his associate, Ivan Kazanikov, at the inauguration ceremony for Trump Ocean Club. Bogdanov and Kazanikov have no known links to Russian organized crime, but Monte Friesner, a “convicted money launderer and former Central Intelligence Agency contractor” who reportedly knew the men, indicated that he believed they may have used their Panama-based business to launder money (reports do not indicate that any formal charges have been filed against the two men.) The report indicates that Kazanikov was interviewed by Global Witness, during which he described managing investments and indicated that he and Bogdanov “still own property in [Trump Ocean Club].” The report does not include a comment from either man regarding the allegations of money laundering.
  • Bogdanov and Kazanikov bought at least six units worth nearly $4 million in Trump Ocean Club. Bogdanov is reportedly the former director of a Russian bank that allegedly lost its operating license due to “its failure to observe anti-money laundering laws,” although there is no indication that Bogdanov himself was personally implicated in that case.

The Trump Organization’s ties to money laundering schemes have made it vulnerable to leverage.

  • In addition to linking Trump Ocean Club units to Russian organized crime, the report illustrates how David Helmut Murcia Guzman, a convicted Colombian money launderer pursued by Preet Bharara and sentenced in the US in 2010, had invested in Trump Ocean Club units.
  • Global Witness concluded that Murcia Guzman’s investment in the Trump Ocean Club “laundered the proceeds of narcotics trafficking, and that Donald Trump was one of the beneficiaries.” It should be noted that Ivanka Trump has not yet responded to the Global Witness report, and the Trump Organization has released a statement distancing itself from the project and denying any relationship with Ventura Nogueira.
  • If Trump failed to act on the knowledge that the units may have been used to launder money, this would have opened the Trump Organization up to leverage.
  • Trump has a record of working with individuals allegedly connected to organized crime, including the infamous Trump SoHo collaboration with Felix Sater. When this record is combined with the recent report, it reinforces a pattern of questionable partnerships that could have left him and his organization vulnerable to blackmail.