Russian elites invested nearly $100 million in Trump buildings
MIAMI/MOSCOW – During the 2016 presidential campaign, Donald J.
Trump downplayed his business ties with Russia. And since taking
office as president, he has been even more emphatic.
“I can tell you, speaking for myself, I own nothing in Russia,”
President Trump said at a news conference last month. “I have no
loans in Russia. I don’t have any deals in Russia.”
But in the United States, members of the Russian elite have
invested in Trump buildings.
A Reuters review has found that at least 63 individuals with
Russian passports or addresses have bought at least $98.4 million
worth of property in seven Trump-branded luxury towers in
southern Florida, according to public documents, interviews and
corporate records.
The buyers include politically connected businessmen, such as a
former executive in a Moscow-based state-run construction firm
that works on military and intelligence facilities, the founder
of a St. Petersburg investment bank and the co-founder of a
conglomerate with interests in banking, property and electronics.
People from the second and third tiers of Russian power have
invested in the Trump buildings as well. One recently posted a
photo of himself with the leader of a Russian motorcycle gang
that was sanctioned by the United States for its alleged role in
Moscow’s seizure of Crimea.
The Reuters review of investors from Russia in Trump’s Florida
condominium buildings found no suggestion of wrongdoing by
President Trump or his real estate organization. And none of the
buyers appear to be from Putin’s inner circle.
The White House referred questions from Reuters to the Trump
Organization, whose chief legal officer said the scrutiny of
President Trump’s business ties with Russia was misplaced.
“I can say definitively that this is an overblown story that is
media-created,” Alan Garten said in an interview. “I’ve been
around this company and know the company’s dealings.”
The tally of investors from Russia may be conservative. The
analysis found that at least 703 – or about one-third – of the
owners of the 2044 units in the seven Trump buildings are limited
liability companies, or LLCs, which have the ability to hide the
identity of a property’s true owner. And the nationality of many
buyers could not be determined. Russian-Americans who did not use
a Russian address or passport in their purchases were not
included in the tally.
The review focused on Florida because the state has a large
concentration of Trump-branded buildings, and determining the
ownership of properties is easier there than in some other
states. The resort town of Sunny Isles Beach, site of six of the
seven Trump-branded Florida residential towers, stands out in
another way: The zip code that includes the Sunny Isles buildings
has an estimated 1,200 Russian-born residents, among the most in
the country, U.S. Census data show.
The Trump organization advertises all seven Florida buildings on
its website as it pursues similar branding deals around the
world. Exactly how much income Trump has earned from the
buildings is unclear.
Six of the seven properties were the product of an agreement the
New York property magnate struck in 2001 with father-and-son
American developers Michael and Gil Dezer. The six buildings
operated by the Dezers in Sunny Isles would bear Trump’s name
under a licensing agreement.
In an interview, Gil Dezer said the project generated $2 billion
in initial sales, from which Trump took a commission. Dezer
declined to say how large a commission, citing confidentiality
agreements. Garten, the Trump Organization’s chief legal officer,
said Trump’s income was a mix of flat fees and percentages but
declined to disclose them.
Edgardo Defortuna, a leading Miami developer, estimated that
Trump likely made between one percent and four percent in initial
sale commissions, based on the standard fees paid on similarly
branded projects. If so, Trump stood to reap a total of $20
million to $80 million in Sunny Isles.
Trump receives no commission on subsequent sales in all seven of
the Florida residential towers.
He continues to make money from one of the six Sunny Isles
buildings, however, according to disclosure forms Trump filed in
the 2016 U.S. presidential race. The disclosure form states that
Trump received between $100,000 and $1 million from a business
called Trump Marks Sunny Isles I LLC. Dezer said these funds came
from the Trump International Beach Resort, a hotel and
condominium complex.
Trump reported no income on his disclosure form from his seventh
Florida property, the Trump Hollywood in the city of Hollywood.
How much he has made over the years from that property’s 200
units is unclear. BH3, an investment fund which took over 180
units in a foreclosure sale, paid Trump a licensing fee of
$25,000 for each unit, according to Daniel Lebensohn, a principal
at the fund. If the remaining 20 units generated the same fee,
Trump’s take would have been $5 million. Garten declined to
confirm Trump’s commission.
Informed of the Reuters analysis of Trump’s Russian condo
investors, two Democratic opponents of the president, Sen. Ron
Wyden (D-OR) and Rep. Adam Schiff (D-CA), renewed their calls for
greater disclosure of his finances.
“While the president has denied having invested in Russia, he has
said little or nothing about Russian investment in his businesses
and properties in the United States or elsewhere,” said Rep. Adam
Schiff, ranking Democrat on the House Intelligence Committee.
“This should concern all Americans and is yet another reason why
his refusal to release his tax returns should be met with
considerable skepticism and concern.”
Sen. Richard Burr (R-NC) and Rep. Devin Nunes (R-CA), the
Republican chairs of the Senate and House intelligence
committees, declined to comment.
Schiff, as well as two U.S. intelligence officials and one former
senior law enforcement official who spoke on condition of
anonymity, said the Russian government sometimes directs funding
at prominent individuals in the United States and Europe in hopes
of improving their perception of Russia. Reuters found no
evidence of such an effort with Trump. Garten, the Trump
Organization’s chief legal officer, scoffed at the idea.
“This is politics at its worst,” he said.
Russian elite
The glimpse inside the condominium dealings offers a look at how
the wealthy in Putin’s Russia use foreign property to stow cash.
One wealthy Russian buyer was Alexander Yuzvik. In 2010, he and
his wife bought unit 3901 of Trump Palace in Sunny Isles for $1.3
million, according to Florida property records. The three-bedroom
apartment has 2,100 square feet and panoramic views, according to
an online real estate listing.
From 2013 to 2016, Yuzvik was a senior executive at Spetstroi, a
state-owned company that has carried out construction projects at
military facilities.
The Spetstroi website says the firm was involved in construction
projects at the Moscow training academy of the FSB, Russia’s
primary civilian intelligence service and successor of the KGB.
Spetstroi also did construction work in the administrative
building of the general staff of the GRU, Russia’s military
intelligence service.
In a statement sent to Reuters, Spetstroi said Yuzvik worked
there until he stepped down in March 2016.
Employees of some state-owned Russian companies are typically
required to disclose their assets and income. Yuzvik and his wife
filed a declaration for 2013. In that declaration, which is
publicly available, they list only assets inside Russia. The
Florida condo isn’t included.
Yuzvik could not be reached for comment.
Andrey Truskov, another Trump condo owner, is a founder and
co-owner of Absolute Group LLC, a holding company involved in
wholesale electronics, banking and property development, with
projects in Moscow, London and New York. The wholesale electronic
business is the biggest in Russia, an Absolute representative
told Reuters. The company does not disclose its financial
results.
Truskov bought apartment 1102 in the Trump Hollywood building for
$1.4 million in 2011. The three-bedroom, 3.5-bath unit is 3,100
square feet, according to online real estate listings.
In a telephone interview, Truskov confirmed that he purchased the
Trump Hollywood unit. He said the Florida apartment was the same
price as a three-room apartment outside Moscow at the time, and
Florida was a nice place to have a property. He said the purchase
was a personal decision that had no connection with his business.
Several wealthy buyers were from Moscow and St. Petersburg, the
country’s two largest cities, according to interviews in Russia,
Florida public records and the Bureau Van Dijk company database
Orbis. Among them: Alexey Ustaev, the founder and president of
St. Petersburg-based Viking Bank, one of the first private
investment banks established in Russia after the fall of
Communism.
A donor to orphanages and chess clubs in St. Petersburg, Ustaev
has received awards from the Russian Sports Ministry and the St.
Petersburg chamber of commerce for his banking and
charitable work, according to his biography on the bank’s
website.
In 2009, Ustaev bought unit 5006, a 3-bed, 3.5-bath apartment in
the Trump Palace complex in Sunny Isles, for $1.2 million in
cash, according to Florida public records. Two years later,
Ustaev bought another apartment, a penthouse unit, this time in
the nearby Trump Royale condominium development, for $5.2
million.
In an email reply to questions, Ustaev said he purchased the
properties in the Trump buildings for private use, but declined
to comment on his family’s U.S. business. “I am living in Russia,
I am working in Russia, and going abroad only for business
purposes or vacations,” he said.
Many of the Russian buyers were from the country’s provinces. One
is Oleg Misevra, a wealthy coal magnate and former traffic police
commander whose company’s main assets are in the Pacific island
of Sakhalin in Russia’s Far East. He has caught Putin’s eye: At a
2010 regional meeting of Putin’s United Russia party, Putin
praised Misevra’s work and held a lengthy question and answer
session with him.
A corporation Misevra controls, Swiss Residence Aliance Inc,
purchased Penthouse #1 in Trump Hollywood for $6.8 million in
2010. The six-bedroom duplex is 8,200 square feet and boasts
12-foot ceilings, according to real estate listings. Misevra did
not respond to requests for comment.
Some of these Russian buyers appear to have done well in America.
Another local politician, Vadim Valeryevich Gataullin, bought an
apartment for $3.5 million in the Trump Hollywood. He did the
deal through a company registered in Florida called VVG Real
Estate Investments LLC. Five years later, Gataullin sold the
apartment for $4.1 million to a Delaware-based limited liability
company whose owner is not identified in state records.
In early 2012, Gataullin bought a second apartment in the same
building, unit 2701, for $920,000, according to Florida records.
Several months later, Gataullin sold the apartment for $1.1
million to a couple from Venezuela, property records show.
Gataullin is from the semi-autonomous Russian Republic of
Bashkortostan, an oil-producing region in the foothills of the
Ural Mountains. The son of a deputy regional prosecutor, he was a
deputy in the regional parliament from 2013 until 2015.
As a member of the regional parliament, he was required to
declare his income and assets under Russian federal law,
according to a representative of the Bashkortostan regional
parliament. A copy of the income declaration Gataullin filed for
in 2013, when he was still owner of the second Trump unit,
contains no mention of the apartment.
Gataullin did not respond to messages sent to his company in
Bashkortostan.
More recently, Gataullin has been actively investing in the Miami
area. His VVG Real Estate has spent at least $28 million on
property in Broward County between 2012 and 2016. It also bought
and sold six properties in Miami Dade County between 2015 and
2016 for a total profit of $238,400, property records show.
VVG is also the registered licensee on a small motel close to the
beach in Hollywood. An employee there told Reuters that Gataullin
“appears and disappears like a ghost” and was currently in
Russia. A secretary at Gataullin’s holding company in Russia told
Reuters on March 17 that he is not in Russia.
The American experience has been a mixed one for some of the
Trump buyers. Among them is Pavel Uglanov, a businessman who
served as a deputy minister for industry and energy in the
regional government of Saratov, in central Russia, from 2010 to
2011.
Uglanov bought unit 3704 of Trump Hollywood in Hollywood,
Florida, for $1.8 million in 2012. He sold the 3-bed, 3,395
square foot apartment for $2.9 million two years later.
Back in Russia, Uglanov made unsuccessful runs for the Saratov
city assembly in 2006 and 2011, the second time as a member of
Putin’s United Russia party. After leaving his deputy
ministership in 2011, Uglanov told his then-wife, Anastasia, they
were moving to Florida.
Anastasia said in an interview in her Miami apartment that her
ex-husband never told her why. “I don’t know what goes on in a
man’s head,” she said.
In Miami, Uglanov opened a gas station, called Niko Petroleum.
When that business struggled, he sold it. He then started a
charter boat business and a trucking firm. They struggled, too.
Uglanov did not have connections in the United States like he did
in Russia and he didn’t understand how Americans do business, his
ex-wife said.
Last August, Uglanov posted a photograph of himself on his
Facebook page posing alongside Alexander Zaldostanov, leader of
the “Night Wolves” biker gang. The Wolves, and Zaldostanov
personally, were made subject to U.S. financial and travel
restrictions. The U.S. government said gang members stormed a
Ukrainian government naval base and a gas facility during
Russia’s annexation of Crimea.
An aide to Zaldostanov did not respond to questions from Reuters.
The group, in interviews in Russian media, has denied storming
the base and the gas facility.
Zaldostanov has had multiple meetings with Putin, according to
the Kremlin’s website. The Russian president awarded Zaldostanov
the country’s “medal of honor” in 2013.
In a phone interview late last month, Uglanov confirmed the Trump
apartment purchase. He said it was a personal matter and declined
to answer questions. “Basically, my private life is not your
business,” he said.
The rainmaker
For Dezer, Trump’s American partner in Sunny Isles, the six
buildings have been a win for his family, the Trumps and Sunny
Isles.
Trump visited the sites at least four times as the buildings –
including a hotel – were constructed and promoted between 2001
and 2011, according to Dezer and former employees of Dezer’s
company. Trump had approval over the look of the buildings and
apartments, Dezer said.
“His people were very much involved in quality control and
construction,” Dezer said. “They were down here once every
quarter checking on us, the progress. They wanted to see we were
making money.”
In 2008, when the housing market crashed, buyers defaulted on 900
Trump apartments, according to Dezer. Dezer said he worked hard
over the coming years to pay back creditors. Until those 900
apartments were sold off, Trump did not earn any money for them,
he added.
Foreign buyers bought into the Trump buildings as the developers
dropped their prices after the crash, according to Dezer and
local realtors. The majority of these buyers were from South
America, with a smaller percentage of Russians and other former
Soviet nationals.
Tanya Tsveyer, a realtor whose Russian clients have bought in the
Trump buildings, described her customers as primarily business
people, including several with investments across the United
States and Russia.
“They bought in the Trump because they liked how the buildings
fit their lifestyle,” she said, referring to the Russians.
By early 2011, the Trump buildings had started to turn a profit,
according to Dezer. He invited Trump to a mortgage burning
ceremony to celebrate Dezer’s paying off the project’s $475
million dollar mortgage. Dezer recalled Trump telling him that he
planned to run for president.
At the party, Dezer, his father and Trump gleefully set flame to
a stack of mortgage documents, applauded by a crowd of tenants
from the Trump buildings and local business people. A video of
the event shows Trump smiling, joking and working the crowd.
“I was with Michael Jackson when he had the hair burned with the
Pepsi, and it was a disaster,” Trump told revelers, referring to
the time the pop superstar’s hair caught fire during the 1984
filming of a Pepsi commercial. “I am sitting next to that
friggin’ fire, and if my hair goes, I am out of business.”
Dezer and Trump got help selling the condos from Elena Baronoff,
who immigrated from the Soviet Union in the 1980s. Baronoff, who
grew up in Uzbekistan, had been active in Soviet cultural
associations. In Miami, she soon began bringing Russian tour
groups to Miami.
Gil Dezer’s father, Michael, recruited Baronoff to work alongside
the Dezer corporation. She traveled to Moscow, St Petersburg,
France and London to bring in Russian buyers, according to Dezer,
selling apartments to them for between $1 million and $2 million.
Baronoff was diagnosed with Leukemia in 2014 and died a year
later.
“She was huge, she was big for them,” Dezer said, referring to
Russian buyers. “No one has filled her shoes.”
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Russian elites invested nearly $100 million in Trump buildings
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