Federal prosecutors in New York involved in the criminal investigation into Donald Trump’s social media company last year started examining whether it violated money laundering statutes in connection with the acceptance of $8 million (€5.6 million) with suspected Russian ties, according to sources.
Trump Media, which owns Trump’s Truth Social platform, initially came under criminal investigation over its preparations for a potential merger with a blank check company called Digital World that was also the subject of an earlier investigation by the Securities and Exchange Commission (SEC).
Towards the end of last year, federal prosecutors started examining two loans totalling $8 million wired to Trump Media, through the Caribbean, from two obscure entities that both appear to be controlled in part by the relation of an ally of Russian president Vladimir Putin, the sources said.
The expanded nature of the criminal investigation, which has not been previously reported, threatens to delay the completion of the merger between Trump Media and Digital World, which would provide the company and Truth Social with up to $1.3 billion in capital, in addition to a stock market listing.
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Even if Trump Media and its officers face no criminal exposure for the transactions, the optics of borrowing money from potentially unsavoury sources through opaque conduits could cloud Mr Trump’s image as he seeks to recapture the White House in 2024.
The extent of the exposure for Trump Media and its officers for money laundering remains unclear. The statutes broadly require prosecutors to show that defendants knew the money was the proceeds of some form of unlawful activity and the transaction was designed to conceal its source.
But money laundering prosecutions are typically based on circumstantial evidence and can be based on materials that show that the money in question was unlikely to have legitimate origins, legal experts said.
The first $2 million payment to Trump Media came in December 2021 when the company was on the brink of collapse after the planned merger with Digital World – that would have unlocked millions for the company – was delayed when the SEC opened an inquiry into whether the arrangement broke regulatory rules.
Trump Media needed a bridge loan to keep the company afloat. But it struggled to get financing until Digital World’s chief executive, Patrick Orlando, sourced a $2 million loan wired from Paxum Bank registered in Dominica, according to the wire transfer receipt reviewed by the Guardian.
The wire transfer identified Paxum Bank as the beneficial owner, although the promissory note identified an entity called ES Family Trust as the lender. Two months later, an unexpected second $6 million payment arrived in Trump Media’s account from ES Family Trust, the transfer receipt showed.
In both instances, Mr Orlando declined to provide details about the true identity of the lenders or the origin of the money to Trump Media executives, Trump Media’s since-ousted co-founder turned whistleblower Will Wilkerson recounted in an interview.
Though the two payments to Trump Media ostensibly came from two separate entities – first Paxum Bank and second ES Family Trust – the trustee of ES Family Trust, a person called Angel Pacheco, appears to have simultaneously been a director of Paxum Bank.
The Russian connection, as being examined by prosecutors in the US attorney’s office for the southern district of New York, centres on a part-owner of Paxum Bank – an individual named Anton Postolnikov, who appears to be a relation of Putin ally Aleksandr Smirnov.
Mr Smirnov, who heads the Russia-controlled maritime company Rosmorport, worked in the Central Office of the Russian government until 2017. Before that, Mr Smirnov was the First Deputy Minister of Justice of Russia until 2014, and for most of Mr Putin’s first two terms as president, Mr Smirnov served in the executive office of the president.
A spokesman for the justice department, the US attorney’s office for the southern district of New York and outside counsel for Trump Media declined to comment about the investigation. Rosmorport and Paxum Bank did not respond to requests for comment. – Guardian