The Making of Donald Trump (18 page)

In addition to whatever stolen goods fencing or drug dealing Cinque may have been involved with in Manhattan, he established a Midwest connection when he became executive director of the American Academy of Restaurant & Hospitality Sciences in Milwaukee around 1985. The group described its honors as “the Academy Awards of the Restaurant Industry.” A number of well-known restaurants declined to hang these honors on their walls, especially after word got around that the way to get an award might just involve a $1,000-dollar initiation fee and annual dues of $495. Later, the headquarters moved to Cinque’s Central Park South apartment, rebranded as the American Academy of Hospitality Sciences.

After Trump announced his campaign for president, questions about his association with Cinque arose again. Cinque declined to accept calls from reporters. The academy’s lawyer threatened to sue anyone who made mention of Cinque’s criminal history.

Trump employed a different tactic.
He told the Associated Press that he hardly knows Cinque. They have posed together many times in many places. The former “Joey No Socks” says he’s attended Trump’s Mar-a-Lago New Year’s Eve party in Palm Beach fourteen years in a row. And what of the fact that Trump was listed on the academy website as “Ambassador Extraordinaire” and trustee just weeks before announcing
his presidential bid? Trump said it was meaningless, that he had never attended a board meeting.
As for his children and employees being trustees, Trump said, “I don’t know that anybody goes.” After reporter Hunter Walker of
Yahoo News
asked about that connection, the academy took down that portion of its website.

And what about all those awards? Does Trump have any concerns that his signature is engraved next to that of a convicted felon? What standards does Trump apply in accepting awards, especially considering renowned Manhattan restaurants like Le Cirque and Le Bernardin decline to put the plaques on their walls?

“
If a guy’s going to give you an award, you take it,” Trump said. As for Cinque’s criminal history, he said, “You don’t tend to look up his whole life story.”

“Joey No Socks” was not the only man with a criminal past and shady business practices with whom Trump associated himself again and again in the years just before his 2016 run for the White House. There was also a convicted stock swindler who once served time in prison for driving the stem of a margarita glass into the face of another man in a Lower Manhattan bar.

M
oments after Donald Trump delivered his profanity-laced remarks on the virtues of revenge in Loveland, Colorado, in 2005,
Rocky Mountain News
real estate reporter John Rebchook interviewed him briefly about projects he was known to be considering in Denver.

Rebchook also questioned Trump’s nattily dressed traveling companion, who had stood backstage during the tirade. He said his name was Felix H. Satter, and he made it a point to carefully spell it out with two
Ts
.

Before Trump, his wife, and Satter got into a limo for the hour-long ride to Denver, Satter said Trump would be visiting the Denver Union Station redevelopment site. Satter obviously had an intimate familiarity with Trump’s intentions—only the day before, Trump had said he had no plans to inspect the site. At the time, Rebchook thought nothing of the way the man spelled his last name. All he knew was that Satter was closely associated with Trump’s plans in Denver.

“Satter’s”
name appears with just one
T
in a host of places. There’s the deed to his home, for example. It is also spelled with only one
T
on New York State court papers from his 1991 felony conviction for stabbing a man in the face with the stem of a margarita glass.

The name Sater with one
T
also appears on federal court papers in a $40 million organized crime stock swindle he confessed to in 1998, a scheme that benefitted him as well as the Genovese and Gambino crime families. The stock swindle involved fake stock brokerage firms using high-pressure tactics to get naïve people to buy worthless shares from Sater and his mob friends.

The extra
T
, Sater later explained, was his attempt to conceal his past from people making simple Internet searches where his criminal history would be easily spotted. No doubt, Sater was also less than eager to have people in banking and real estate investments figure out that his father was a reputed Russian mob boss in Brooklyn.

Any effort to obscure his past ended in 2007, when real estate reporter Charles V. Bagli wrote a long
New York Times
article detailing Sater’s criminal history and other dealings.
Donald Trump, the Trump Organization, and Alan Garten (the general counsel) have all said that they check people out before doing business with them—a standard practice in business and a vital one for deals involving large amounts of money borrowed from banks and individual investors. Yet, until Bagli’s article appeared, Trump and his lawyer said they had been unaware of Sater’s criminal history.

Instead of severing ties with Sater, however, Trump continued to associate with him.

Sater worked for Bayrock, an investment firm involved in Trump SoHo, a luxury high-rise in Lower Manhattan, as well
as a luxury high-rise on Florida’s Atlantic Coast that was to be called Trump International Hotel and Tower Fort Lauderdale. The Florida project failed.

Curiously, Sater had no job title at Bayrock, whose offices were in Trump Tower.

When Sater left Bayrock, he moved into the Trump Organization suite of offices, also in Trump Tower. In 2010, three years after Bagli’s article appeared, Sater was issued business cards by the Trump Organization. His title was “Senior Adviser to Donald Trump.”

When people who had made advance purchases of condominiums in the high-rise found out about Sater’s past, they filed a 2009 lawsuit against Trump and others. One of the issues was an alleged failure to be candid and forthright about who Sater was. The buyers asserted that failing to disclose Sater’s criminal connections upfront was a violation of the duty to inform them of every material fact that could influence their decision to invest or walk away.

The suit (one of two over that project) also alleged that the whole high-rise endeavor was a classic bait-and-switch con job fostered with false advertising. The investors claimed that they had bought in only because Trump was the developer. It was supposed to be a quality Trump property, and they were willing to pay a premium price to invest in a building bearing the Trump brand. They later found out Trump had only licensed his name.

The civil racketeering suit also accused Sater of siphoning millions of dollars out of the project, harming the buyers while simultaneously hiding the proceeds from tax authorities. It was an accusation with more than a hint of the stock swindle that Sater had participated in, which the FBI said had benefitted him, the Genovese and Gambino crime families, and others.

Joe Altschul, a Fort Lauderdale lawyer representing seventy-five of the early Fort Lauderdale buyers, said his clients would never have deposited millions of dollars for their apartments had they known about Sater’s criminal history. “
Purchasers had a right to know who they were dealing with,” Altschul said. “It’s bad enough that they prop up Donald Trump as the developer, but then you find out it’s not Trump but a convicted felon who had already been charged in financial shenanigans.” According to Altschul, had Sater’s past been disclosed, his clients “wouldn’t have touched this deal.”

Trump, under oath in the Fort Lauderdale lawsuit, expressed a different view, saying the failure of the project was actually a boon to the buyers. “
On this one, they got very, very fortunate that they didn’t put their money down, that they didn’t buy the units and that would have been worth a fraction of what they were [worth] when they signed at the all-time high in the market,” Trump explained.

Lawyers for the buyers noted that other Fort Lauderdale–area condo projects at that time were completed and had done just fine.

The 2009 lawsuit involving Trump International Hotel and Tower Fort Lauderdale happened to coincide with the sentencing for Sater’s stock swindle. Sater had pled guilty in secret in 1998. Many of the court records of that case remain sealed in the federal courthouse in Brooklyn. For a file to remain largely sealed after almost two decades was so unusual that a retired federal judge, the
Miami Herald
, and others went to a higher court to get the records opened. It took a United States Supreme Court order to finally unseal some of the Brooklyn files in 2012.

Among the files that were finally made public was Sater’s guilty plea to a felony charge in 1998. The files also included his 2009 sentencing—no jail time. Despite Sater’s violent
criminal past, he got probation plus a $25,000 fine. Aside from the relatively insignificant fine, there was no requirement that Sater pay back a cent of his ill-gotten gains.

There is every indication that the extraordinarily lenient treatment resulted from Sater playing a get-out-of-jail free card. Shortly before his secret guilty plea, Sater became a freelance operative of the Central Intelligence Agency. One of his fellow stock swindlers, Salvatore Lauria, wrote a book about it.
The Scorpion and the Frog
is described on its cover as “the true story of one man’s fraudulent rise and fall on the Wall Street of the nineties.”
According to Lauria—and the court files that have been unsealed—Sater helped the CIA buy small missiles before they got to terrorists. He also provided other purported national security services for a reported fee of $300,000. Stories abound as to what else Sater may or may not have done in the arena of national security.

Without a doubt, Trump continued to be involved with Sater in business. In 2009, when the Trump SoHo opened in Lower Manhattan, video cameras captured Trump, microphone in hand, extolling the virtues of the project. Two men stood with him. One was Felix Sater.

Yet when the Associated Press asked about Sater in 2015, Trump said, “Felix Sater, boy, I have to even think about it.” Earlier, under oath in videotaped testimony in the Florida case, Trump said he would not recognize Sater if he were in the room.

Other statements Trump has made under oath make it clear he knew about Sater’s involvement with the CIA. The real problem for Trump—and what prompted him to distance himself from Sater—was liability for civil fraud in the Fort Lauderdale real estate litigation. The stronger the connection that the buyers in the failed project could establish between
Trump and Sater, the greater the damages they stood to collect from Trump.

Trump making money from deals, and then distancing himself from individuals he was involved with in those deals, was not limited to the lawsuit over the failed Fort Lauderdale project. As we shall see, it also came up in litigation over deals in Hawaii, Mexico, and Tampa.

T
he sales pitches urged investors to get in early to reap the biggest profits. The Trump Organization, Donald himself, and two of his grown children announced that, along with a firm called Irongate and some other West Coast partners, they would soon transform a sleepy little spot on the Pacific coast—only a dozen miles from the California border—into the next hot Mexican vacation spot by building the Trump Ocean Resort.

The
trump.​com
website listed Punta Bandera (which means “tip of the flag”) as a “Trump Portfolio” property, one of thirty-three Trump Organization projects in “development” around the globe. A video and brochures touted the twin waterfront towers that would soon go up. Two of Trump’s children flew to San Diego to mingle with would-be buyers.

“We are developing a world-class resort befitting of the Trump brand,” Ivanka said in a video, between pictures of the Pacific Ocean, the beach, and renderings of the planned waterfront
apartments. “We’re really creating northern Baja as the new Cabo, as the new resort destination.” She was referring to Cabo San Lucas, the once-quiet Mexican fishing village at the southern tip of the Baja peninsula, which, following the construction of waterfront hotels, now bustled with American tourists.

“This is a deal with my brother and, of course, our father, with the whole strength of the Trump Organization that we are extraordinarily bullish on,” Ivanka continued. “Proximity to San Diego makes this a tremendous investment.”

Trump himself appeared in the video as an authority on luxury development, saying, “I am very, very proud of the fact that when I build I have investors that follow me all over. They invest in me, they invest in what I build and that is why I am so excited about Trump Ocean Resort.”

Prospective buyers were given a frequently asked questions sheet. One question: “Tell me more about the Developers, the Trump Organization and Irongate?”

Ivanka Trump told sales reception attendees that she was so impressed with the project that she was buying one of the apartments herself. She chitchatted with prospective buyers, saying that once they became neighbors she just might drop in to borrow some sugar. Her brother Donald Jr. also told prospective buyers he was buying his own pad.

The Donald Trump name and the assurances of his children attracted prospective buyers aplenty. Many paid a $5,000 deposit for an “Exclusive Priority Reservation Agreement,” required just to hear a sales pitch at the Grand Hyatt in downtown San Diego. That payment was fully refundable to anyone who decided not to take advantage of the opportunity.

The prospect of getting in early on a transformative project, and one in which buyers might run into next-generation
Trumps, was so attractive to some people that they were neither put off by nor dubious of the high-pressure sales tactics. Much later, three people who had made exclusive priority reservations complained that they were given five minutes to buy or walk. That didn’t even give them enough time to read the terms of their purchase contract, much less consult a lawyer. They signed, writing checks totaling more than $200,000. Some buyers later said they put their life’s savings into their eagerly anticipated new homes by the sea. They came to regret being so hasty and so trusting.