The Trump SoHo was a troubled project from its inception, as two Soviet-born developers envisioned a residential tower in a Manhattan neighborhood that did not allow such buildings. They signed on Trump as a minority partner in the mid-2000s to capitalize on his popularity, driven by his TV show “The Apprentice.”
The controversies have been widely publicized – including a criminal investigation – but it has not been disclosed until now that the Trump SoHo units were bought overwhelmingly by cash-paying shell companies.
Secretive sales generated $110 million between 2010 and 2013, records show. The buyers were largely LLCs with names such as 3002 Trump Soho Condo and Soho 3211 that were formed just weeks or days before buying a unit.
One real estate lawyer, Martin Jajan of Manhattan, handled more than half of the secretive sales, records show. As the buyers’ representative, Jajan signed deeds of transfer, created the shell companies and listed himself as the agent for the shell companies. The transactions provide little or no clues about the actual buyers – with a few exceptions.
On four of the deeds, the LLC listed Moscow addresses, which were crossed out with a pen. The address of Jajan’s Manhattan law office was written in their places.
Another three units were bought by a former oligarch from Kazakhstan with money he allegedly stole from the former Soviet republic, according to a California lawsuit filed in 2014 by Kazakhstan’s largest city, Almaty. The lawsuit says that a former mayor of Almaty, Viktor Khrapunov, and his family stole hundreds of millions of dollars in city assets during his tenure between 1997 and 2004, fled to Switzerland in 2007 and began buying property in New York City and California to launder the money.
The still-pending lawsuit says Khrapunov and his relatives bought three Trump SoHo units for $3.1 million in cash through newly formed LLCs in April 2013. Records show the LLCs sold all three units within a year or two at a slight loss. Khrapunov has denied any wrongdoing and says he is being persecuted for political reasons.
Jajan did not respond to requests for comment. In a 2014 New York magazine article, Jajan said it’s not uncommon for him to buy for clients he’s never met, and that a lot of his work involves setting up entities such as LLCs for buyers to avoid estate taxes, potential lawsuits, and public exposure.
The Trump SoHo sales alarmed Ross Delston, a Washington, D.C., lawyer and money laundering expert who has consulted for the Justice Department.
“The circumstances of the sales and the fact that three of the properties were allegedly related to money laundering in Kazakhstan raise questions about the process by which units were sold in the Trump SoHo,” Delston told BuzzFeed News. “Having 77% of the transactions to anonymous buyers raises the probability that there are red flags for money laundering and other financial crime.”
Trump did not develop Trump SoHo or sell its units. But as an 18% owner, Trump stood to profit from the 46-story tower and promoted the building so vigorously that some early purchasers accused him, his son Donald Jr., his daughter Ivanka, and others in a 2010 lawsuit of exaggerating the number of sales to boost prices.
The Manhattan District Attorney investigated the activity of Donald Jr. and Ivanka at the Trump SoHo in the early 2010s and brought no charges, according to news reports. Trump, abandoning his public posture of not settling lawsuits, agreed to refund $2.8 million in deposits to six purchasers, according to a news article.
The Trump SoHo deal was canceled in November, and the building is now called the Dominick Hotel and Spa.
Source : https://www.buzzfeed.com/thomasfrank/secret-money-how-trump-made-millions-selling-condos-to