Posts

Money Laundering Part 3 of 5

The video below is the third segment in our explanation of money laundering. We discuss the “layering” phase, where crooks try to throw investigators off their trail by moving their money around the world and back in a series of bogus transactions.

Click here if you’d like to know more about who RAGEPATH is and what we’re about. If you support our mission to expose public corruption, please consider making a small donation. Every little bit helps!

Money Laundering – Part 2 of 5

Below is the second part of our video explainer series on money laundering. We look in greater detail at the first step of the money laundering process, “placement.” Basically, this is how criminal first get their money from a crime scene into a bank:

Click here if you’d like to know more about who RAGEPATH is and what we’re about. If you support our mission to expose public corruption, please consider making a small donation. Every little bit helps!

Intro to Money Laundering – Part 1 of 5

Here at RAGEPATH, we’ve learned that there’s a mismatch between people’s interest in money laundering and the information available to understand it clearly. So, we’ve worked pretty hard to put together the following video explainer, aimed at giving you basic literacy about what money laundering is, how people do it, and why it’s a crime.

Click here if you’d like to know more about who RAGEPATH is and what we’re about. If you support our mission to expose public corruption, please consider making a small donation. Every little bit helps!

Our thanks to the following, who helped produce these videos:

Producer/Post Production by S.D.
Production Coordination by J.C.
Music Direction and Original Music by David R.
Camera by Chris R.
Gaffer by Luka M.
Written and Presented by Geoff A.
Logo and Typography by Volunteers
Project Management by S.A.

RAGEPATH Filed an Official Ethics Complaint Today

Today, RAGEPATH submitted a formal sworn complaint to the California Fair Political Practices Commission regarding Assemblymember Cristina Garcia’s financial disclosures and campaign finance reports.

The complaint details six apparent violations of the California Political Reform Act. Each pertains to possibly inaccurate or incomplete documentation of Ms. Garcia’s financial interests or her campaign finances.

The potential violations we have identified could be quite serious. They include: (1) the undisclosed gift of an entire apartment building worth more than $400,000 (California law prohibits gifts larger than $250); (2) loans of $180,000 from out-of-state residents backed in part by real estate that Ms. Garcia acquired for free during an election campaign; and (3) the use of campaign funds to pay for stays in out-of-state luxury hotels on trips with no clear campaign purpose.

It is our hope that Ms. Garcia will be able to provide further information that shows no violations of California law have occurred. We further hope that Ms. Garcia will be able to provide the public with a clearer picture of her campaign and personal finances.

At RAGEPATH, we believe that public office is a sacred trust and that public officials are rightfully called upon to place that trust above their personal interests. We believe that elected officials should be held to an even higher standard than private citizens, one that reflects both the values and the concerns of the citizenry that has chosen them to serve as representatives.

California law imposes a duty of transparency and disclosure on elected officials, because a complete and accurate understanding of our representatives is necessary for us, as citizens, to give our informed consent and to prevent conflicts of interest.

We consider today’s request for an investigation to be all the more necessary because local newspapers suffering economic duress often lack the resources and headcount to provide the level of scrutiny that we, as citizens, need of our elected officials. For too many Californians, inadequate local media coverage combines with low voter engagement to deliver inevitable candidates who have not been properly vetted.

We, as citizens, have the power and the duty to step up and provide that scrutiny when nobody else can or will.

Ms. Garcia is one of 120 state legislators in California, all of whom should be held to the highest standards of conduct. There can be no accountability without transparency. We encourage California residents – indeed, residents of any state – to demand transparency and accountability from their elected officials at all levels of government – from their local City Council chamber all the way to the Oval Office.

Official statement regarding Cristina Garcia

RAGEPATH is the research project of a nonprofit established in 2017, called the Public Research and Education Project (PREP). PREP’s mission is to scrutinize the record of public officials, especially those who have not been vetted by a competitive election process.  

We are opposed to corruption, the abuse of power, the victimization of others, and the impunity of public officials. We oppose these things wherever we find them, regardless of party affiliation.

PREP is a registered California non-profit. The politicians we investigate are powerful and frequently retaliate against their accusers, so it is especially important that we protect the identities of those we work with.

Cristina Garcia is an elected official from an uncompetitive district in an area of Los Angeles that has been plagued by past corruption scandals. Garcia has not had a credible opponent for the past several election cycles, nor has she received the same level of scrutiny that politicians in hotly contested elections receive. This class of public officials is of especial interest to PREP, because the possibility for unchecked corruption is highest where public scrutiny is lowest.

It is not our place to tell the story of Cristina Garcia’s victims. They are telling their own stories, and they deserve to be heard. The story here is not, “Who has asked questions about Garcia’s conduct?” The real story is,What was Garcia’s conduct?”

The recently published news accounts about that matter reflect the stories of real people. Those stories have been verified by professional reporters working for established and reputable news outlets. These factual accounts have been subjected to multiple levels of verification and corroboration. If you have legitimate journalistic questions about the allegations against Garcia, we suggest you speak with the victims who have come forward publicly or the attorneys retained to represent them.

PREP’s investigations are ongoing. It would be unwise to comment on the details of unfinished research. If we confirm credible evidence of wrongdoing, we will bring that information to the public. Until that time, we will provide no further comment.

Trump and the Elephant-Hide Wall Coverings

Trump’s administration has recently proposed lifting a ban on the import of elephants killed as sport trophies. Suddenly, endangered species have become a major political issue. As of this writing, Trump had issued a policy reversal by Tweet. The full effect of Trump’s tweet is not yet clear. There seems to be confusion about whether the things Trump does on Twitter are “really happening” or not.

Trump’s sudden concern for elephants is inconsistent with his documented history of cruelty to animals. As elephants faced extinction in 1989, Trump was using their hides to coat the walls and floors of rooms in his properties. Trump’s sons have controversially engaged in the sport-hunting of endangered African species, including elephants. One of Trump’s Russian business associates once pled guilty to smuggling endangered animal carcasses into the United States. The prosecutor who approved the plea deal is now a member of Trump’s Cabinet.

Cruelty to Animals

Trump is scheduled to pardon a Thanksgiving turkey later this week, which may be his first documented act of mercy towards an animal. In over a year of full-time research, I haven’t yet found an instance of Trump showing kindness or empathy toward an animal (the kind treatment of people has been pretty rare also).  I have come across deeply troubling anecdotes, though.

Walls and Ceilings Covered In Elephant Hide

I first discovered allegations of Trump using elephant-hide wall coverings in a letter to the editor of the Miami Herald from June of 1989. The reader had written in to express indignation at a television news segment that had casually featured “elephant hides used as wall-coverings” in the lobby of Trump Tower. I’m still working to verify that claim and find the original source.

Confirmation of Trump’s use of elephant-hides for interior decor can be found in a 1989 Miami Herald article about visitors regaled by a trip to Trump’s yacht.  The article noted that “even the richest of millionaires was impressed by the elephant-skin ceiling in the movie theater” aboard the yacht. At the time Trump was cladding his walls with their hides, the population of African elephants was plunging dramatically. To stem the mass slaughter of elephants, the United States banned the import of elephant parts in 1990.

Slaughtering Endangered Animals for Sport

While I have not yet “strongly verified” claims of Trump coating his walls in elephant hides, I soon found more recent (and widely known) photographs of Trump’s sons killing various endangered African animals (elephants included) for sport. (GothamistMarch 13, 2012)

Exposure of the photographs prompted Trump to publicly defend his sons, noting they’re hunters and donate the meat of the animals they kill to  “the local tribes.”

It’s unclear to me where this tribe of African villagers subsisting off the donated kills of wealthy safari hunters lives.  If you spend too long listening to Trump, even the most outlandish things begin to seem plausible, so please take a few moments to wrap your head around the staggering implausibility of the Trumps’ official defense of their conduct. Slaughtering cheetahs for sport would be a convoluted approach to the policy problem of rural hunger in Africa. Nearly any child between the ages of 7 and 10 could explain quite clearly why hunting big-game cats for meat is wrong. 

Doing Business with a Smuggler of Endangered Animal Carcasses

Craziest of all, however, is that the international trade of endangered animal parts actually ties in directly with Trump’s Russian business associates. Trump once had a business partner named Tamir Sapir (who passed away in 2014). The relationship between Trump and Sapir goes back a long way and is pretty complicated. But to keep it simple, let’s point out that Sapir was a key partner in Trump Soho, a big Trump-branded development in New York City that is controversial. Two of Trump’s children were nearly indicted for their role in the building’s development and their business partners have been credibly accused of money laundering.

During all of the other sketchiness and fraud going on at Trump SoHo, Tamir Sapir was caught with a yacht full of endangered animal carcasses. Officials reportedly discovered “barstools upholstered with python … skins, seven carved elephant tusks, … a zebra-skin-lined children’s bed, and a cigar box wrapped in elephant hide.” The billionaire pled guilty in 2009 and was punished with a fine of $150,000. The prosecutor in Sapir’s case, Alex Acosta, is now Trump’s Secretary of Labor.

That NYC cab driver turned billionaire has pleaded guilty to charges that he violated the Endangered Species Act by attempting to import 29 rare dead animals into the US aboard his yacht. You may recall Tamir Sapir as the Georgian man who rose from immigrant hack to Russian oil and real estate tycoon, ultimately buying the city’s most expensive townhouse across from the Metropolitan Museum for $40 million in 2006. But Florida Customs officers who peered inside his yacht in 2007 know him better as a dealer in dead endangered wildlife.

According to the Post, Fish and Wildlife Service investigators confiscated the following items: Barstools upholstered with python and anaconda skins, seven carved elephant tusks, hides of jaguars, tigers and zebras, a fully stuffed and mounted lion, a cigarette holder made from python skin, a zebra-skin-lined children’s bed, and a cigar box wrapped in elephant hide. Speaking to reporters, US District Attorney Alex Acosta said, “Personally, I think these items are rather creepy items. And I would not want them in my house, but some people like them and are willing to buy them. The reason laws exist is because there is a market.”

(Gothamist, May 15, 2009)

Summary

So, to recap what we know so far:

(1) Trump doesn’t have a good track record on caring for animals.

(2) Trump has a past history of importing endangered animal parts.

(3) Trump’s sons have gone to Africa to kill endangered animals for sport.

(4) One of Trump’s business partners admitted to illegally importing endangered animal parts.

(5) Trump’s Administration has proposed loosening restrictions on the import of endangered animal parts.

 

Iran Sanctions Good for Trump Business Partners

The Trump Administration has been trying to break a deal with Iran lately. Under the deal, Iran doesn’t try to develop nuclear weapons. In return, America doesn’t impose some economic sanctions on Iran.

It’s hard to understand what Trump is thinking. Why would we encourage Iran to resume developing nuclear weapons, just so that we can put sanctions back on them?

Normally, the purpose of sanctions is to create economic pain that will force another country to change its policies. But Iran has already abandoned its nuclear program! Undermining American progress on the denuclearization of Iran just to reimpose sanctions seems like a case of putting the cart before the horse.

So, why the eagerness to reimpose sanctions on Iran, when they’re not actually developing nuclear weapon capacities?

One of the side effects of sanctions is that they create demand for money launderers. Sanctions separate bad people from their money. If the bad people want to get their money back, they need to turn to money launderers, who will make the money look like it’s clean and no longer covered by sanctions.

Does Donald Trump have business partners who have been accused of helping Iran circumvent sanctions? Yes. Does Donald Trump have business partners who have profited from the sale of weapons to the Iranian regime? Yes.

There are at least six clear examples that I know of:

  1. Trump earned at least $5.3 million from business partners in Azerbaijan who have been accused by United States diplomats of laundering money for the Iranian Revolutionary Guard.
  2. Trump’s Russian business partner in Toronto partially owned a subsidiary of Russian arms manufacturer Rosoboronexport, which sold weapons to the Iranian and North Korean regimes and participated in an Azerbaijani money laundering operation.
  3. Trump was once the New York City landlord for a state-owned Iranian bank that was accused by American officials of financing Iran’s nuclear program and terrorist activities orchestrated by the Iranian Revolutionary Guard.
  4. Trump once had extensive business ties with a company run by the Crown Prince of Dubai, a province of the United Arab Emirates that played an active role smuggling nuclear components and other sanctioned goods into Iran.
  5. Trump had multiple business dealings with Adnan Khashoggi, the arms dealer who helped broker the Iran Contra arms swap, in which the Reagan Administration secretly traded weapons to Iran to secure the release of American hostages.
  6. Trump partnered with the Silk Road Group on development projects in Georgia and Kazakhstan, a company that controlled a joint-venture project in the Iranian oil sector that was later targeted by sanctions.

As far as I’m aware, Trump’s connections to Iranian business interests haven’t all been reported out together in a single integrated way.  A lot of these cases are frustratingly complex and difficult to explain. Unfortunately, that’s how money laundering is supposed to work. You move a pile of dirty cash around through a bunch of shell companies until people become so confused that they give up trying to figure out where it all started from. But despite its complexity, the overall record is clear. Trump has consistently profited off business with partners who were involved in circumventing sanctions on Iran.

Calling All Junior Mystery Solvers

Today I found something totally unexpected in a San Diego Courthouse. It’s also totally strange. I’d like to enlist your help explaining what I’ve found. Click here now to see the case file while your eyes are still fresh!

It appears to be a debt collection action by Fred C. Trump that somehow turned into bench warrants and a police manhunt for an elderly couple who owed Trump slightly over $1,000. The entire case is deeply unusual. I’ve never seen anything like it. Several people hanging out with me in the basement of the San Diego Hall of Justice this afternoon agreed it seems most unusual.

So let’s do a quick walk-through of the weird. First, let’s look at the amount of money at stake. Even by the standards of 1982, a debt of $1,310.10 wasn’t huge.

Next, pay close attention to the address of his attorney. For a two-bit collection action in San Diego, Trump hires an attorney with an office in Beverly Hills. That’s 100 miles north of San Diego and some of the priciest real estate in America. This doesn’t look like a cheap attorney.

OK, so next Fred Trump’s presumably high-priced attorney asks the court to schedule a hearing about issuing a “writ of execution” against Sam and Betty Tobias. But they don’t come to the hearing. So the judge issues a bench warrant for their arrest. I’ve seen a lot of collection actions in my career. I’ve never seen them pushed this far.

Now take a look at the arrest warrant itself. Police are searching for a 75-year-old retiree with a receding hairline and a 9 year old car. To arrest him (and his wife!) over a $1,300 debt owed to a landlord 3,000 miles away.

The final filings were barely legible on microfilm (and even less legible after printing and scanning). But they’re an account by the marshal of his unsuccessful efforts to apprehend our fugitives.

This case is one of the dozens of bizarre things you find when you start looking into Trump. Unfortunately, I don’t have enough time or money (yet!) to chase down every lead. I’ve given several of my most promising leads to journalists and I’m working on several by myself.

Would you like to try your hand at running this one down? Can you find evidence that would help to explain Fred C. Trump’s motives for launching such a punitive cross-continental quest for such a small sum of money? If so, please send me an email at ragepath.project@gmail.com explaining your theory and the evidence that supports it. No attachments, please.

RAGEPATH: A New Hope

I want to thank everyone for all the support you have shown for RAGEPATH and its mission. Your recent outpouring of support has saved this endeavor.

One week ago, the RAGEPATH project was on its last legs. I have been working full-time since mid-November to research business entities controlled by Donald Trump that were inadequately vetted during the 2016 campaign. During that time, I have made a lot of shocking finds and I have attracted generous support. As we entered August, however, I was planning to dissolve the project by the end of the month due to a lack of sufficient resources to continue. The recent outpouring of support that has followed in the wake of Politico‘s profile on independent research efforts into Trump has allowed us to change those plans.

Researchers like me help journalists by chasing down leads and figuring out which of the many possible stories that could be told are well-substantiated and which tantalizing clues will lead to an empty rabbit hole. I’m the first step in a long process of bringing stories to light. My professional industry — opposition research — has arisen to fill a void left behind by the hollowing out of America’s newsrooms. Under ordinary circumstances, that means we only get to investigate the stories that someone has a vested financial interest in exploring. I’ve dedicated myself to my Trump research at my own expense because it seemed to be a matter of significant public concern that too few resources were dedicated to exploring.

When I was planning to cease operations, I devised a “triage list” of my best findings. The stories on that list struck a balance between high significance in light of current events and comparatively less work to “finish.” For the past several weeks, I have made a concerted effort to share those findings with some very talented investigative journalists. Many of the projects ranked highest on my “triage list” have been entrusted to competent hands.

In the past week we have received enough financial support to extend our project through at least the end of October. Your support has also given me the ability to visit some public record archives that are likely to contain highly relevant information that has not previously come to light. I will first head down to Los Angeles, where Trump has had several bizarre financial arrangements over the past thirty years. I will then travel to a second jurisdiction of concern, where we believe there are valuable but vulnerable records which should be preserved.

I can’t thank you all enough for supporting my work. I’ve given my all to this because I feel it is so important. In the past few weeks it felt like I’d hit the mat and was down for the count. Then, suddenly, a roar of support has given me new energy and helped me to rise back up — wobbly but determined to resume the fight.

I’m still working to revise my project scope in light of the changed circumstances. Many of you have reached out to volunteer services, provide tips, contribute funds and request further info on my findings. Check out our support page if you still want to help. It will take some time to figure out what I can realistically achieve within the confines of this new set of resources. I will update you all with my plans when that process is complete.

Thank you. God bless America.

-Geoff

Weird Money In, Weird Money Out

Trump received a suspiciously generous mortgage from Hong Kong investors in July of 1994 that saved his troubled Riverside South development from bank foreclosure. The exact same month, Trump’s brother Robert used companies that Donald partially owns, to invest millions of dollars in a family of overseas companies that would be defunct within three years. Was Trump paying overseas investors to lend him money?

Trump lived off one-time cash infusions

One of the strangest observations about Donald Trump’s cash flow comes from a 1995 analysis by New Jersey casino regulators.  The report noted that all Trump’s significant sources of cash flow “appear to be one-time occurrences and do not represent continuing sources of funds.” The report also noted that Trump’s cash flow problems were likely to grow in the future, because the end of a 1990 agreement with his lenders meant “debt service on the replacement debt must now be serviced with cash.” Despite finding Trump’s cash flow had underperformed projections, his major potential income streams were heavily leveraged, and his projected cash requirements were likely to only grow, regulators opined that he would be solvent enough to continue operating his casinos because he had “demonstrated an ability to adjust cash-flow requirements when necessary.”

Right there, in a nutshell, is the problem of Donald Trump’s finances. They don’t make sense. He’ll spend millions of dollars on enterprises that lose money, but somehow there’s always cash around when he needs it.

That explains why a growing number of observers have reached the conclusion that Trump is engaged in some kind of money laundering operation. It would appear that Trump controls some level of assets held entirely “off the books.” When he needs cash in America, he pays a foreign intermediary to loan it to him.

Trump bailed out by generous Hong Kong lenders

The starkest example of this can be seen in 1994. During this period, Donald Trump was still laboring under an Operating Agreement he had reached with his banks after bankrupting several companies he controlled and defaulting on billions of dollars in loans. Trump had maintained control over Riverside South, a large parcel of undeveloped rail yards that Trump and his father had been trying to develop since the early 70s. The property, which yielded no income, was also heavily mortgaged.

By summer 1994 it looked like Trump would be forced to default on the loans and surrender the property to his bankers. Suddenly, a mysterious group of Hong Kong investors swooped in to buy up Trump’s distressed $210 million mortgage at a steep discount of only $90 million. The new investors gave Trump generous terms, allowing him to keep 30% equity, operational control, and an open line of credit to finance development.

They seemed to come out of nowhere — a powerful group of Hong Kong billionaires who appeared in June to revive Donald J. Trump’s troubled Riverside South project with millions in cash and a promise to finance the multibillion-dollar development. […] The $2.5 billion project had been languishing until the arrival of the Hong Kong investors, who purchased Mr. Trump’s $250 million debt on the land for $90 million and made a commitment to finance the construction of Riverside South. (New York Times, August 29, 1994)

Trump’s Brother Sent Millions Abroad, No Return

Why would RAGEPATH think that this $90 million from Hong Kong was actually Trump’s money? Well our suspicions start with a publicly-traded company called Management Technologies that spent $12.8 million to buy four companies called “Winter Partners” based in New York, London, Singapore and Hong Kong from someone in Zurich.

 On July 14, 1994, the  Company acquired Winter Partners Limited, Winter  Partners,  Inc,  (subsequently renamed MTi Abraxsys Systems, Inc), Winter Partners Pte Limited (subsequently  renamed   MTi   Abraxsys   Systems   Pte Limited),   and    Winter    Partners    (HK)   Limited (subsequently  renamed   MTi   Abraxsys   Systems  (HK) Limited)  from  Winter   Partners  Holding   AG.    The companies, hereafter referred  to as  the WP companies, formed the international  banking software  division of Winter Partners, a Zurich, Switzerland based company. The Company  paid  a  total  of  $12,800  for  the WP companies. The Company financed the acquisition through a combination  of cash  from its  own  resources, short   term borrowings and proceeds from new share issuances. (Management Technologies, Annual Report, Fiscal Year 1995)
 Management Technologies was in turn closely tied to Donald Trump’s brother, Robert. According to the company’s public filings, the company had several insider transactions with Robert Trump, including hiring financial consultants designated by Robert Trump in July of 1994.
 Item 12.  Certain Relationships and Related Transactions [...] Robert S. Trump, Gerald Franz, Midland & Associates [...] the Company also agreed to place the sum of $100,000 in an escrow account with  its counsel for the specific purpose of repayment  of the $50,000 loan  made by Mr.  Franz and  for  payment by  the  Company under  a  joint marketing agreement with Financial Performance Corp., a software company of which  both Messrs. Franz  and Trump are  affiliates. The  funds  in  the  escrow  account  have  been   disbursed  as determined by Mr.  Franz, in  his sole  discretion, including  a $40,222.15 payment made to Mr. Franz. [...]  As a consequence  of a  transaction with  Midland Associates,  a general partnership in which Mr. Trump is a partner, in  July of 1994, the Company entered into a financial  consulting agreement with Mr. Gerald Franz to perform financial  consulting services, and agreed to pay Mr. Franz or his designee a fee in  the sum of $60,000. (Management Technologies, Annual Report, Fiscal Year 1995)
In the exact same month, another company called Midland Associates filed four UCC statements indicating that loans had been extended to each of the Winter Partner companies purchased by Management Technologies.  Each of those UCC statements, signed by Robert Trump, indicated that the loans were secured against all future accounts receivable earned by the companies. The size of the loans is not disclosed in the UCC financing statements (one, two, three, four).

We know from Donald Trump’s 2015 Financial Disclosure that he was a 25% owner of Midland Associates at the outset of his presidential campaign. The remainder of the company was owned by Trump’s family members.

We also know from Trump’s 2015 Financial Disclosure that he had been a partner in Midland Associates continuously from 1968. This would mean that Donald Trump owned at least 1/4 of the money that was pumped into Winter Partners through Midland Associates.

After the transaction, Winter Partners went on to lose slightly more than $13 million and was closed down as a total loss by Management Technologies in 1997, following its insolvency and liquidation.
 Winter Partners was acquired in July of 1994 in an acquisition transaction that included Abraxsys, Inc., Abraxsys Pte and Abraxsys HK. The Company paid a total of $12,800,000, and incurred certain additional costs of approximately $325,000.  [...] In the years ended April 30, 1995, 1996 and 1997, Winter Partners incurred losses of $5,038,147, $6,070,311 and $1,954,026, respectively. No dividend was paid to Management Technologies, Inc. in conjunction with the liquidation of Winter Partners.  Accordingly, at April 30, 1997, the Company's apportioned investment in, and advances to,  Winter Partners are valued at zero. (Management Technologies, Annual Report, Fiscal Year 1997)

So what’s the deal here? Is this a staggeringly stupid investment by Donald Trump’s brother, who purchased several foreign-controlled companies with one company, then loaned them an undisclosed sum secured against all their future earnings with another company, only to lose his entire investment?

Or is it a simple payment to someone overseas that may have financed the loan Donald Trump received in the exact same month these payments were made?

We admit it’s possible that these transactions were completely unrelated. We think there is enough evidence that these transactions were interrelated that the burden of skepticism should lie with those arguing they are not.  We’d welcome evidence that proves our conclusion wrong.