Earlier this spring, the government was poised to take a Russian real estate firm to court for using Manhattan real estate to launder money stolen from Russian taxpayers. But just two days before the trial was due to start, the Justice Department abruptly settled the case for barely a fraction of that company’s illicit loot. Now, the Democrats on the House Judiciary Committee want to know if there’s a connection between that deal and Donald Trump Jr.’s attempt to get dirt on Hillary Clinton from the Kremlin.
During his tenure as U. S. Attorney for the Southern District of New York, Preet Bharara was well known for taking on financial crime. Remember, this is the same guy who sent Bernie Madoff to prison for 150 years. He appeared to have another career-maker in the works in 2013, when he announced a civil forfeiture suit against Prevezon Holdings, a major Russian real estate company owned by Denis Katsyv, son of former Moscow vice-governor Pyotr Katsyv. Prevezon was suspected of buying prime apartment and office space in Manhattan with some $230 million in tax returns fraudulently obtained by corrupt Russian officials.
Bharara was getting ready to take the case to trial when the White House abruptly fired him in March. On May 12–just two days before the case was slated for trial in Manhattan federal court–Prevezon agreed to pay $5.9 million to the government without any admission of wrongdoing. By comparison, had the case gone to trial, Prevezon potentially faced having to cough up over $250 million–the stolen tax refunds, plus some $20 million in real estate, as well as bank accounts used to hide the stolen refunds. With interest, the bill could have reached half a billion dollars.
Even though Prevezon wound up paying less than three percent of the money it helped hide from the Russian people, the government tried to spin this as a win. Acting U. S. Attorney Joon Kim pointed out that Prevezon coughed up three times the proceeds that could be directly traced from the tax refund fraud to Prevezon coffers, as well as 10 times the amount that could be directly traced to the real estate properties. In contrast, the Katsyvs’ law firm estimated that the settlement was roughly equivalent to the costs of the prosecution, and claimed it was a tacit admission that the government “shouldn’t have brought the case.”
There matters stood until Wednesday, when House Judiciary ranking member John Conyers of Michigan and his Democratic colleagues noticed the name of Denis Katsyv’s main defense counsel–Natalia Veselnitskaya. For those who don’t know, this is the Kremlin-connected lawyer who met with Donald Jr., Jared Kushner, and Paul Manafort in June 2016 on the supposed premise that she would be bringing damaging information–or kompromat, as it’s called in Russia–about Hillary Clinton.
Apparently Conyers and his buddies smelled a fish decaying in the moonlight, because they sent a “what the hell is going on here?” letter to Attorney General Jeff Sessions. Read it here.
? BREAKING: All 17 @HouseJudDems Demand Answers on DOJ Settlement of Fraud Case Handled by Russian Lawyer Who Met With @DonaldJTrumpJr
— House Judiciary Dems (@HouseJudDems) July 12, 2017
? BREAKING: All 17 @HouseJudDems Demand Answers on DOJ Settlement of Fraud Case Handled by Russian Lawyer Who Met With @DonaldJTrumpJr.
2/2 pic.twitter.com/NfjF0uc3u7
— House Judiciary Dems (@HouseJudDems) July 12, 2017
The letter, signed by all 17 Democrats on the committee, notes that Veselnitskaya would have come to Trump Tower sooner than June, but was tied up in court defending Denis Katsyv. It also notes that the tax refund fraud was uncovered in 2007 by Sergei Magnitsky, a dissident Russian lawyer. Magnitsky’s rutal death in 2009 led to the passage of the Magnitsky Act, a bipartisan law that blacklisted a number of Russian officials suspected in his death. Veselnitskaya has been actively involved in the effort to repeal that law.
Under the circumstances, the House Judiciary Dems suspect that the Prevezon trial and Veselnitskaya’s chat with three of the Trump campaign’s senior advisers may be connected–leading to the prospect that Sessions’ DOJ “may have settled the case at a loss for the United States in order to obscure the underlying facts.” Accordingly, they want Sessions to provide all materials related to the settlement decision, as well as any details of Veselnitskaya’s involvement.
More tellingly, they also want to know if Donald Sr., any White House staffers, Trump family members, or Trump campaign staffers had any contacts with the Justice Department related to this case. They also want to know if Sessions discussed the case with Donald Jr., his younger brother Eric, or anyone else on the transition team after Sessions was tapped as Attorney General. They also want to know if Sessions discussed the case with the Kremlin’s now-former ambassador to the United States, Sergey Kislyak.
Lest you think that this is mere windmill-tilting, by most accounts Prevezon was losing bigly in the run-up to the trial. The government had won a bid to admit evidence from a Russian criminal case, while Prevezon lost a motion for summary judgment.
Seen in this light, settling a major fraud case for not even a fraction of the suspected amount of ill-gotten gains just two days before trial makes absolutely no sense. Moreover, one of the lawyers for the defense was involved in an attempt to funnel Kremlin-flavored opposition research (read: kompromat) to the Trump campaign.
Either scenario by itself would demand that Sessions and Trump explain themselves to the American people. Both together? For the umpteenth time, we find ourselves asking questions that no one in any self-respecting democracy should have to ask about anyone, anytime, anywhere.
(featured image courtesy the Office of President-Elect Trump, available under a Creative Commons BY-SA license)
