ANOTHER VERDICT AGAINST FELIX SATER WARNS COMPLIANCE OFFICERS TO ALWAYS REMEMBER THAT SEALED CRIMINAL FILES FOR COOPERATING INDIVIDUALS EXIST, AND CAN HURT YOU OR YOUR CLIENT OR BANK

I see that the Russian-American career criminal, FELIX SATER f/k/a Felix Mikhailovich Sheferovsky, has had a multimillion dollar verdict entered against him in SDNY. While we have previously covered Sater's sordid career on our blog, it is more important that compliance officers remember that his $40m criminal conviction, in EDNY, was sealed by the US Attorney there, due to his extensive cooperation with law enforcement.

That sealed file, therefore not available to compliance officers and lawyers conducting due diligence, was responsible for Sater being approved for a Florida building project where he later defrauded a number of victims; had the criminal case been public knowledge, and it should have been, he would not have had the opportunity to commit fraud.

Unfortunately, our Department of Justice, as a matter of policy, often chooses to protect the guilty when they have something to offer, acts which conceal criminal records, and which can result in subsequent damage to innocent third parties. I understand the reason, but that doesn't mean I have to like or approve it. 

Sater was at one time an adviser to Trump on the Trump Moscow project

There's an important lesson here for compliance officers; while we generally search for criminal convictions during due diligence, look also for any major arrests that don't seem to have an outcome available to you, have sealed pleadings galore in the file, or are completely not available to you on PACER or state records. Your target may be enjoying the protection of the criminal justice system, and if so, govern yourself according on your recommendations. Watch this issue, it can badly burn your or your client or your bank.