On Feb. 3, long-time Trump associate Felix Sater filed a cross-complaint in a New York federal court. The complaint alleges that Russian and Kazakhstan-connected individuals and entities conducted “a shadow intelligence operation of Sater and Trump for the purpose of manufacturing information to harm Donald Trump politically,” including by providing Christopher Steele a PowerPoint presentation riddled with lies Steele later fed to the FBI.
Sater’s cross suit comes nearly three years after the City of Almaty, Kazakhstan, and BTA Bank filed suit against Sater, two of the companies he owned, a former business associate, and that associate’s LLCs, in City of Almaty, Kazakhstan v. Sater.
In that lawsuit, filed in May 2019, Almaty and BTA Bank alleged that Sater and the other defendants helped Mukhtar Ablyazov, the former chairman of the BTA Bank, and Viktor Khrapunov, the former mayor of the City of Almaty, launder money the duo had stolen from the plaintiffs. In the case, the plaintiffs sought recovery of millions of dollars in stolen funds, based on claims of fraud, conspiracy, unjust enrichment, and conversion.
While that case has been pending in a federal district court in New York since spring 2019, on Thursday Sater filed for the first time counterclaims against Almaty and BTA Bank. In yesterday’s filing, Sater also added the Republic of Kazakhstan and Arcanum (Asia) Ltd. as parties.
In his lawsuit, Sater claimed that in June 2015, BTA Bank, Almaty, and Kazakhstan, referred to as the Kazakh Parties throughout the court filing, entered a “confidential assistance agreement” or “CAA,” in which they agreed to pay Sater (through his company, Litco) $100,000 per month, plus a percentage of the funds recovered, for Sater’s help in recovering assets stolen by Ablyazov.
The CAA, however, was merely a “guise,” Sater alleged, with Arcanum and the Kazakh Parties instead conspiring “to leak false and defamatory information about Sater to media outlets including ABC News.” “This was part of a concerted effort to falsely (and absurdly) portray Sater, a longtime business partner of Donald Trump, as a Russian agent and Kremlin stooge,” the lawsuit alleged.
Until January 2021, Sater had no reason to know that Arcanum and the Karakh Parties were working against Sater and Trump, according to the lawsuit. It was only then, when the FBI released the 302 interview summary of the FBI’s interview with Steele, that Sater claimed he learned the truth.
In the 302 summary of the FBI’s September 18, 2017, interview of Steele, the agents reported that Steele said that his firm Orbis “was involved in some Kazakhstan-related” work and “some of the material from that work obviously falls within the bounds of the Special Counsel.”
Here, Steele said he “was working on a Kazakh-related project involving an individual by the name of Ablyazov, embezzlement from BTA Bank, pyramid schemes, and connections to Felix Sater and Trump Soho.” According to the interview summary, “Steele said that they want RICO up and running in the United States.”
The agents then noted that “Steele brought along a PowerPoint presentation from the company Arcanum explaining the Sater connection.” The 302 summary added that “this information was slated to be provided to the US Department of Justice and the FBI as it involves a corrupt American official.”
Shortly after Sater became aware of the FBI 302 interview summary of Steele, Sater retained co-counsels John Snyder and Tom Sima in the spring of 2021. According to Snyder, Sater retained the two New York attorneys because they had previously handled sensitive matters involving Kazakhstan and because Sima speaks fluent Russian and has 20 years of experience and contacts in Kazakhstan.
The FBI 302 interview summary of Steele was a “real eye-opener,” Snyder said in an interview, with Sater claiming in his lawsuit that he “was shocked to learn that the Kazakhs [Parties] and Arcanum engaged him under the CAA in bad faith.”
“From the beginning, Arcanum (a private intelligence firm staffed by former officials from the Clinton administration,” Sater alleged, “and their attorneys Boies Schiller (a Democratic Party law firm) intended to use the CAA as a pretext for gathering intelligence against Sater, with the intent of harming Donald Trump’s presidential campaign.”
Sater further alleged that after he learned of the FBI 302, he “investigated further and learned that the Kazakh plot against Sater was coordinated by Karim Massimov, Chairman of the Kazakh KGB and his henchman Kenes Rakishav.” Both “Massimov and Rakishev were actively seeking influence with American politicians” during this time, according to the lawsuit.
The complaint continued: “In 2016, they believed that they would be rewarded for helping the Hillary Clinton campaign (who was considered certain to win the election) by smearing Sater and Trump.” Their “effort to curry favor with prominent American politicians included,” according to Sater, “lavishing money on Hunter Biden, who called Rakishev a ‘close friend.’”
In the middle of 2021, the complaint then explained, Sater “reached out to the Kazakhs [parties] to discuss the FBI 302 and Arcanum’s plot against Sater and Trump.” The parties then proceeded to engage in mediation and settlement discussions, until, according to Sater, unrest in Kazakhstan led to Massimov’s arrest and Rakishev fleeing the country. At that point, Sater learned the Kazakhs were walking away from settlement negotiations.
With his attempts to resolve his differences with the Kazakhs Parties and Arcanum privately stalled, Sater resorted to filing the present lawsuit, according to yesterday’s filing, which set forth five separate claims.
In Count I, Sater alleged Aranum defamed him when it drafted a PowerPoint and other communications that falsely claimed: that Sater was involved in embezzlement from BTA Bank; that Sater was involved in pyramid schemes; that Sater was involved in official U.S. corruption; that Sater committed misconduct with respect to the Trump SoHo project; that Sater had committed RICO violations; and that Sater, a married man, was “involved” with Ablyazov’s daughter.
Count II charged the Kazakh Parties with controlling and directing the activities of Arcanum, including its preparation of the PowerPoint presentation about Sater, which Arcanum then provided to Steele, with the intention that Steele then submitted it to the FBI.
The third count alleged a breach of fiduciary duty claim against Arcanum and the Kazakh Parties. Here, Sater argued he “had a confidential relationship with Arcanum, the Kazakh Parties, and their counsel Boies Schiller,” and that “Arcanum, the Kazakh Parties, and their counsel Boies Schiller had a duty to maintain confidentiality with respect to information supplied by Sater.” Sater then alleged that “Arcanum and the Kazakh Parties breached their fiduciary duty by obtaining information from Sater on false pretenses, then disseminating such confidential information (together with false information) to Christopher Steele and others.”
Sater’s fourth claim alleged a “Fraudulent Misrepresentation” count against Arcanum and the Kazakh Parties. This cause of action was premised on these defendants “falsely represented their purpose and objective,” to “gain access to confidential information about Sater, his contacts around the world, his dealings with Donald Trump, and many other subjects.”
“This fraudulently obtained information was weaponized against Sater and Trump,” the complaint then alleged, adding, “as evidenced by the fact that Arcanum assembled a dossier on Sater, which was turned over to Christopher Steele and the FBI.” “The same information was then leaked to ABC News,” according to the complaint.
The fifth and final claim alleged a breach of professional ethics against Arcanum and the Kazakh Parties. It was premised on the defendants’ allegedly fraudulent concealment of “the fact that the Kazakh KGB, Arcanum, and Boies Schiller were conducting an opposition research project against Sater and Trump, . . .”
In an email comment received yesterday evening, Matthew L. Schwartz, a partner at the law firm of Boies Schiller Flexner and counsel for BTA Bank and the City of Almaty, Kazakhstan, said, “Felix Sater’s filing is nothing more than conspiracy theories and desperation dressed up like a lawsuit.” “Before it was filed,” Schwartz continued, “we explained in excruciating detail why it is factually, legally, and ethically baseless—including being contradicted by Sater’s own sworn testimony.” The BTA Bank and City of Almaty attorney added that they are “confident that the court will see through his tactics.”
Schwartz and his legal team will need to file formal responses to Sater’s lawsuit, which will surely elaborate on this theme. But, in addition to BTA Bank and Almaty, the newly sued third-party defendant Arcanum, once properly served, will also need to answer the complaint.
Given that Steele’s 302 interview summary states that the former MI6 agent presented the FBI with “a PowerPoint presentation from the company Arcanum explaining the Sater connection,” what Arcanum has to say in response will be fascinating to see.
Likewise fascinating to watch will be the media’s response to Sater’s lawsuit and his claim that the Kazakhstan players were seeking to interfere in the 2016 election to benefit Hillary Clinton, as well as the allegations of corruption Sater levies against Hunter Biden.
Something tells me, however, that there will be less coverage of Sater now that he isn’t seen as a way to destroy Trump.
Margot Cleveland is a senior contributor to The Federalist. She is also a contributor to National Review Online, the Washington Examiner, Aleteia, and Townhall.com, and has been published in the Wall Street Journal and USA Today.
Cleveland is a lawyer and a graduate of the Notre Dame Law School, where she earned the Hoynes Prize—the law school’s highest honor. She later served for nearly 25 years as a permanent law clerk for a federal appellate judge on the Seventh Circuit Court of Appeals. Cleveland is a former full-time university faculty member and now teaches as an adjunct from time to time.
As a stay-at-home homeschooling mom of a young son with cystic fibrosis, Cleveland frequently writes on cultural issues related to parenting and special-needs children. Cleveland is on Twitter at @ProfMJCleveland. The views expressed here are those of Cleveland in her private capacity.