You are what you associate with…
The Chumph isn’t the only crook in the family.
Throw a dart at a map of the world and there’s a solid chance it will land near a spot where a Trump family business has allegedly gotten caught up in a money laundering scheme.
There’s Panama, where the Trump Ocean Club is said to have washed dirty cash for Russian gangsters and South American drug cartels. There’s Azerbaijan and the Trump Baku, where the money allegedly being laundered was said to belong to Iran’s Revolutionary Guard. And of course, there’s the Trump Soho in Manhattan, a magnet for money from Kazakhstan and Russia, and a property that one former executive on the project now calls “a monument to spectacularly corrupt money-laundering and tax evasion.”
In each of those cases, the Trump Organization has denied any wrongdoing and has sought to distance itself—and the Trump family—from the property, saying they merely licensed the Trump name. But as it turns out, it’s not just Trump-branded real estate developments that perhaps have attracted the wrong kinds of money.
Thanks to an overlooked filing made in federal court this past summer, we can now add a jewelry business to the list of Trump family enterprises that allegedly served as vehicles to fraudulently hide the assets of ultra-rich foreigners with checkered backgrounds. In late June, the Commercial Bank of Dubai sought—and later received—permission to subpoena Ivanka Trump’s now-defunct fine jewelry line, claiming its diamonds were used in a massive scheme to hide roughly $100 million that was owed to the bank, according to filings at the U.S. District Court for the Southern District of New York.
High-end real estate is a common vehicle for money laundering, in part because, until recently, the industry was effectively exempt from many of the laws that prevent laundering through other types of assets, such as the “Know Your Customer” laws that apply to banking. But diamonds, too, hold an important place in the money launderer’s toolkit. Mountains of dirty money can be converted into tiny diamonds, which are easy to store or smuggle across national boundaries, and convert back into cash when the opportunity arises.
The Trumps are not the only Western business owners whose ventures have been tied to alleged money laundering and fraud schemes, but they are the only ones who are also in charge of American foreign policy, making the entanglements—and possible points of leverage—that arise from such ventures matters of national security.
Ivanka Trump launched Ivanka Trump Fine Jewelry roughly a decade ago, partnering with a young real estate and diamond heir named Moshe Lax. It was her first independent business venture. She licensed her name for use by Madison Avenue Diamonds, which did business under Trump’s name in exchange for royalties. Trump also owned an equity stake in the business for an unspecified period. Around the time they were going into business together, Lax introduced Trump to Jared Kushner, the man who would become her husband, at a luncheon for real estate heirs he convened in Midtown Manhattan.
Trump and Lax set up a flagship boutique on Madison Avenue and publicly showered praise on each other, but the partnership eventually soured. Lax has been accused of all kinds of wrongdoing, from stiffing creditors to extortion, in numerous lawsuits, some of them related to Ivanka Trump Fine Jewelry and some of them unrelated.
Trump terminated her relationship with Lax late last year, and according to the Trump Organization, Lax still owed her money as of August. Meanwhile, the defunct diamond line is getting dragged into court proceedings like this latest Dubai case, which alleges a plot by the family of prominent Emirati oil traders named the Al-Saris.
A decade ago, the high-flying Al-Saris controlled a multibillion-dollar oil-trading empire, but then hit a rough patch, reportedly becoming mired in legal battles over unpaid bills and sanctions imposed in 2012 on the family’s firm, FAL Oil, for selling oil to Iran.
Apparently strapped for cash, the Al-Saris are alleged to have borrowed over a $100 million from the Commercial Bank of Dubai. They defaulted on the debt and, according to court documents, proceeded to hide their assets in a network of shell companies, through which they bought diamonds and Las Vegas real estate. In addition, to Ivanka’s line, the bank—which filed a fraud suit in 2014—says the Al-Saris purchased diamonds from Jacob Arabo—better known as “Jacob the Jeweler”—for the same purpose. As “Jacob the Jeweler,” Arabo became famous as a diamond dealer to the stars (he was sentenced to 30 months in prison in 2008 for lying to investigators about Detroit’s “Black Mafia Family” drug trafficking ring).
In this new case, the Commercial Bank of Dubai has not accused the jewelry line or Arabo of any wrongdoing. Arabo’s business did not respond to requests for comment, nor did FAL oil, the Al-Sari- owned enterprise at the center of the dispute. Lawyers for the Dubai bank, which is being represented in New York by Mayer Brown LLP, declined to comment.
Josh Raffel, a White House spokesman who fields Ivanka-related inquiries, did not respond to questions about the subpoena request, nor did Alan Garten, the general counsel of the Trump Organization.
The attempt to subpoena the jewelry business has so far escaped public notice, likely in part because court documents name only “Madison Avenue Diamonds”—the corporate entity that was registered to do business as “Ivanka Trump Fine Jewelry”—and do not mention the Trump name. Though Trump has since cut all ties to Madison Avenue Diamonds, the timeline of the underlying case suggests any alleged transactions would have taken place when the company was still doing business as Ivanka Trump Fine Jewelry.
As a practical matter, such a subpoena request—from the Commercial Bank of Dubai—now potentially injects the business dealings of the first family into a vicious legal fight between Arab world power players at a time when the Trumps are also using the power of the presidency to influence the region….