Becoming A Spy
1997 - 1998
It was September of 1996 when State Street collapsed. We know Felix traveled to Russia in 1996 per his own interviews in recent years; it’s just unclear exactly when during 1996 this travel happened. Felix traveled there to look into a telecommunications deal with AT&T and ended up being recruited as an asset by the Defense Intelligence Agency (DIA). He was also asked by formidable-looking Russians not to look at the telecom deal he went there to look at, but instead was asked to join them in a different telecom deal.
Need to insert quote from Skullduggery podcast interview here.
When the Soviet Union collapsed, Russia and other Soviet states became later referred to as a Wild Wild West period. It was briefly following this initial collapse Sater was friends with Evgeny Shmikov, a former Russian intelligence officer, and making acquaintances with other ex-KGB and ex-GRU contacts.
Sater had experience with Wall Street, he was from America, he could speak perfect Russian, and he could sing Russian songs with these former Russian intelligence and military officers. It’s no surprise the DIA would pick up on the fact Sater could get closer to these guys than they could ever hope to get in 20 years.
As Sater explained it in the Buzzfeed The Asset article from 2018, he “went to Russia to work on telecommunications deals with AT&T and others.” He states one night he was at dinner with a group of Russians in Moscow and introduced to a man named Milton Blane, an American defense contractor. He says Blane followed him into the restroom and asked for his phone number and wanted to meet the following day. Sater recounts the story in this way, saying, “Blane explained that he worked for the DIA and that some of the people Sater had been dining with were high-level Russian intelligence agents. ‘You’re in with a group who could deliver,’ Sater recalls Blane telling him. Blane, Sater said, asked him to work as an asset, intelligence lingo for a confidential source, but warned, ‘I want you to understand: If you’re caught, the USA is going to disavow you and, at best, you get a bullet in the head.’”
Anthony Cormier and Jason Leopold, both Buzzfeed journalists who broke the story, expressed some skepticism from two longtime intelligence officers who said this approach by Blane would have been “unorthodox, - recruits wouldn’t usually be told they would be disavowed, and a counterintelligence investigation would normally have taken place to ensure Sater wasn’t working for an enemy.” But they also acknowledge in the article Sater’s ability to speak perfect Russian and business contacts, as well as access to Russian military officials “would have made him a prime recruitment target for any US intelligence agency in Moscow.”
The 5K1 letter (made public in 2019) stated, “In an effort to build a reserve of good will for the imminent prosecution he was to face in America, Sater contacted United States intelligence officers overseas and offered to provide them with information concerning Afghanistan’s Northern Alliance,” the letter said. “During the spring and summer of 1998, Sater traveled to Central Asia where he gathered and passed on information to United States sources about the Northern Alliance’s desire to resell Stinger missiles to the United States government as well as information about the Taliban and Osama bin Laden, among other things. Sater contacted the FBI during this period and kept agents apprised of his activities overseas.”
It was January of 1998 when the NYPD received a call from the manager of a storage facility who was cleaning out a storage bin after its owners did not respond to several delinquency notices for overdue rental payments. The manager had found several loaded guns and documents related to White Rock/State Street and revealed Sater’s role.
According to the Bloomberg article from November 1998, a “Marina Shap” didn’t pay the rent on “her” locker at a Manhattan Mini-Storage in the SoHo section of New York. They explain a manager opened the bin and found “two 9-millimeter pistols, a 12-gauge shotgun,” and per the FBI’s own court filing, “various documents in a box and gym bag.” It was the documents which got the FBI’s attention, specifically the Russian organized crime squad. The FBI explained the numerous documents told a tale of “stock manipulation and money laundering.” Bloomberg reported more than 30 foreign shell companies and bank accounts being involved “to launder the proceeds from illegal stock sales during 1994 and 1995.”
The Bloomberg article specifically named Gennady “Gene” Klotsman and Felix Sater, writing they “ran a now-defunct micro-cap brokerage, White Rock Partners & Co. which later changed its name to State Street Capital Markets.” They reported both men were charged with stock manipulation and money laundering.
According to the later public release of the 5K1 letter (in August of 2019), this is when Sater received news in Russia the FBI was seeking him out for his role in the stock fraud scheme. According to the letter, “In an effort to build a reserve of goodwill for the imminent prosecution he was to face in America, Sater contacted US intelligence officers overseas [through lawyer Robert Wolf] and offered to provide them with information concerning Afghanistan’s Northern Alliance.”
There is still a lot of confusion in the public sphere regarding how Felix Sater would have information regarding the Northern Alliance, Al Qaeda, etc. This avenue of intel is through Sater’s relationship with Russian intelligence, especially Evgeny Shmikov. Evgeny had a rapport with Massoud of the Northern Alliance. (More on this later.)
During the spring and summer of 1998, Sater traveled to Central Asia hunting down Stinger missiles for the Central Intelligence Agency (CIA).
In September of 1998, Felix traveled back to the United States and surrendered to the authorities at the FBI. By December, he would sign a cooperation agreement with Andrew Weissman.
It is important to understand the records uncovered in the gym locker which dropped the documents in the NYPD’s and then the FBI’s laps, were “largely indecipherable until Sater explained their contents.”
In 2019, Felix Sater was interviewed by Michael Isikoff of the Yahoo News podcast Skullduggery. During this interview, he spoke about being sent, er, asked to travel to Moscow to help Lord Charles Spencer Churchill check out the feasibility of a telecom deal a friend of his has invested millions in there.
Link to entire podcast interview here.
"I was sent, I was asked by a member of the Royal family , Lord Charles Spencer Churchill, was actually Winston's nephew and Diana.... He tells me that a friend of his invested like $10 million dollars in a telecommunications company in Russia... it was a time of opportunity in Russia. It was like the Wild West. Communism had just fallen." - Felix Sater
"His nickname was 'Nutty,' which helped distinguish him from a multitude of forbears also named Charles. He was a relative of Winston Churchill and Diana, Princess of Wales. And he was a Vanderbilt through his grandmother, American heiress Consuelo Vanderbilt, daughter of William Kissam and Alva Vanderbilt."
"In 1997, 1998, I was working on a telecommunications deal in Russia. Telecommunications in Russia was pretty much controlled by their GRU, which is their military intelligence arm. So I ran across all of these people." - Felix Sater
This is the explanation provided for why Felix came to be in Moscow in 1997 conversing and singing songs in Russian with Russian intelligence officers. It was this easy access he had to key people in Russia with the novelty of being an American, Russian-speaking businessman who understood Wall Street, which resulted in Milton Blane from Blane International Group recruiting him to work as an asset for the Defense Intelligence Agency (DIA).
"We have the ability of starting a telecommunications company that could be worth billions of dollars. You have to understand at that time calling to Russia was like $3 to $4 a minute, so there was a great opportunity to rent a transatlantic cable from AT&T and then resell it whether it was phone cards, selling private companies, um, basically, you know, like a private phone company, like an IDT. ANd I said sure, let's go, because I wasn't investing any money. And these guys told me we have everything, licensing, you know, we control the whole process here. I got very excited about it. It was a good opportunity. And eventually as I started dealing with a bunch of these guys, I came to the realization that they were all intelligence operatives, for the most part, or military guys. It was signal-intel. I didn't care. I didn't have any secrets they could beat out of me, so didn't matter to me. And then one day, we went to the baths.... very famous baths in Moscow.... The Russian baths are all about you know, drinking, and birch leaves, being beaten with birch leaves branches, and a very hot hot hot sauna, and then afterwards already thoroughly sauced, we decided to go on to dinner. There must have been 8,9,10, 12 guys, I don't remember the count, but it was all Evgeny and his buddies. And uh, an older American guy walks into the restaurant and Evgeny screams out, 'Hey, you two should get to know each other! You're both CIA!' Now, I laughed it off because basically to them everybody from America was CIA, because that's how they grew up. They grew up being worried about American spies and all of that. He says, you should meet this guy Milton Blane. Milton sits down but Milton happens to be a real spy! And these guys are. I'm the only one who's a kid from Brooklyn sitting at a table, a table full of Russian and American spies!"
This is the story of how Felix came to be working as an asset for the DIA before he even caught wind of being in trouble with the FBI for the stock fraud pump-and-dump scheme. Milton went on to ask Sater forhis number, arrange to meet him at an Irish pub popular in Moscow with the ex-pats.
This misconception in the media he continued doing all the work which will be laid out on this website to avoid doing jail time is not quite accurate when placed in the context of what the comparable sentences were for the other people involved in the fraud, along with the number of years he helped multiple intelligence agencies. There's no evidence anywhere available which backs up this claim if he hadn't cooperated with these agencies, he would have actually gone to jail for two decades. It is established he cooperated or worked as a spy from 1997 to "at least late 2017." (Source Buzzfeed News:The Asset)
"I meet him there. Literally within five minutes of showing up to meet him there, he says to me, you know, I work for the Defense Intelligence Agency and your country needs you. And before he got the words out of his mouth, I said I'm in! He said wait a second, you don't even know what you're in for. I said, well, you just said my country needs me, I'm in." - Felix Sater
Milton told him about a new Russian missile defense system they were concerned about in 1997, an anti-satellite system they worried could jam the United States radar-jamming capabilities, that they might be able to fly all the way to American cities jamming our defense capabilities. Felix proceeded trying to bribe Russian military operatives and get scientists and go to closed military cities to find him any information at all this Russian weapons system.
"Just to get rid of one fallacy, I did this to get out of jail. There's a legal term for that - it's called bullshit. When I came back in '98 and surrendered to the US government, voluntarily, and had gotten out of the stock scam business, voluntarily, I showed up and gave them Osama bin Laden's satellite phone numbers. I then proceeded to not only cooperate on my case, but teach them all the tradecraft on how to uncover stock fraud. I surrendered sometime at the end of '98. By the middle of '99 I knew I wasn't going to jail. Yet I continued working with them prior to sentencing for another ten years, and then after sentencing for another ten years. So the concept that I did this all to get out of jail is nonsense. I didn't do this to get out of jail. Yes, I certainly wanted the credit at sentencing time for the things that I did, but I wasn't worried because, listen, there were 19 defendants in my case, 15 of them didn't go to jail. So I wasn't exactly facing, you know, triple-life or anything like that to being with, and I can assure there's not one prosecutor in the United States that sends cooperators on a stock fraud case to hunt bin Laden. So, let's throw out this whole concept that I did it to get out of jail. I did not." - Felix Sater
He started working with the DIA on finding information for the anti-satellite system, and then began working with the CIA on finding Stinger missiles the Central Intelligence Agency were concerned would fall into the hands of al Qaeda to be used against US planes. When FBI Agent Leo Taddeo called Felix in Russia to let him know he was under suspicion for his role in the stock scam, this is when Felix returned to the United States and began his relationship of cooperation with the Federal Bureau of Investigation.
It is important to keep in mind when considering the facts of Mr. Sater's story, by the year 1998, he has already established relationships with three agencies: first the DIA, then the CIA, and then the FBI.
'The Case of the Gym Bag that Squealed' - Bloomberg, Nov 1998
Before Felix signs his cooperation agreement with the FBI in December of 1998, (signed by Andrew Weissman of the future Mueller team) Bloomberg published an article about the gym locker which was opened in Manhattan due to unpaid rental fees. Inside the locker were documents related to the pump-and-dump scheme. However, we know from the government's DOJ 5k1 letter regarding his cooperation (not made public for another two decades), these documents did not make much sense to the FBI until Felix explained to them what they meant as part of his cooperation.
The 5k1 letter is parsed through in more detail on this page, however here is an excerpt of this fact.
White Rock and State Street
Court case documents detail how the cooperation Felix provided to the FBI resulted in a domino effect which in effect brought down many players in both Italian and Russian organized crime. This section will be expanded further at a later date.
FBI Director Louis Freeh's Focus on Russian Organized Crime
This section will be expanded further at a later date.
Felix Sater's LinkedIn profile details his starting work for Regency Capital as far back as what would have been his time in Russia, January 1998. On LinkedIn, he listed it as Regency Investment Group but as you can see under his picture it is Regency Capital Group. It may be referred to as both. Note it is only within a year following the start of Regency, he's working with Bayrock and Tevfik Arif.
(His FBI cooperation agreement was signed December 1998, so his work with Bayrock began by the following month.)
Two of the names listed on the Regency Investment Group website are Sarah May and Alex May.
There is also a Sarah May with same phone number connected to a Welcome Home Realty in the Littleton, Colorado area.
Sarah May's LinkedIn profile has her listed as Managing Director of Regency Capital.
Sarah May appears to have started work with Regency August of 2016, so this was shortly following when discussions regarding Trump Tower Moscow with I.C. Expert, Andrey Rozov, and Michael Cohen ended.
Sarah's work with Welcome Home Realty, LLC started around June of 2010.
It is unclear how Sarah would have traveled the life path of working with Lockheed Martin on space and mechanical engineering tied to Orion/NASA efforts, and also gone into real estate. Yet that's what is reflected on her career outline.
The other person who is listed on the Regency website, Alex May, has similar background according to his LinkedIn profile. Notable difference being while he listed in his title Real Estate Investor, he doesn't have Regency listed out as Sarah does on her profile. Here's how his career profile reads:
This section will be updated/completed as soon as possible. Targeting Fall 2020 for completion.
It remains unclear how Sarah May and Alex May met Felix Sater and decided to join his real estate company, or real estate advising company?