Achi news desk-
Donald Trump’s social media company, Trump Media, managed to go public last week only after it was kept afloat in 2022 by emergency loans provided in part by a Russian-American businessman under scrutiny in an investigation federal insider trading and money laundering.
The former US president will earn billions of dollars – his share is currently valued at around $4bn – from the merger between Trump Media and Technology Group and the blank check company Digital World Acquisition Corporation, and parent company Truth Social took public .
But Trump Media almost fell short of the merger after regulators opened a securities investigation into the merger in 2021 and caused the company to burn through cash at an incredible rate as it waited to get the green light for its debut in the stock market.
The situation led Trump Media to take out emergency loans, including from an entity called ES Family Trust, which opened an account with Paxum Bank, a small bank registered on the Caribbean island of Dominica best known for providing financial services to the porn industry.
Through leaked documents, the Guardian has learned that ES Family Trust operates as a shell company for a Russian-American businessman named Anton Postolnikov, who co-owns Paxum Bank and has been the subject of a federal criminal investigation on the joint for years by the FBI. and the Department of Homeland Security (DHS) to merge Trump Media.
The existence of the trust was first reported by the Guardian last year. However, it was not known who controlled the account, how the trust was connected to Paxum Bank, and how the money was channeled through the trust to Trump Media.
The new details about the trust come from documents that include: Paxum Bank records showing Postolnikov had access to the trust account, the papers creating the trust showing a lawyer in St Petersburg, Russia as its settlor, and three years of the financial transactions of the trust.
The concern about the loans to Trump Media is that ES Family Trust could have been used to complete a transaction that Paxum itself could not.
Paxum Bank does not offer loans in the US as it does not have a US banking license and is not regulated by the FDIC. It appears that Postolnikov used the trust to borrow money to help save Trump Media – and the Truth Social platform – because his own bank could not arrange the loan.
Postolnikov, the nephew of Aleksandr Smirnov, an ally of Russian president Vladimir Putin, has not been charged with a crime. In response to an email to Postolnikov requesting comment, a lawyer in Dominica representing Paxum Bank warned of legal action for reporting the contents of the leaked documents.
There is also no indication that Trump or Trump Media had any idea about the nature of the loans beyond the fact that they were opaque, and neither the company nor its executives have been accused of wrongdoing. A Trump Media spokesperson did not respond to a request for comment.
But Postolnikov has come under increasing scrutiny in the criminal investigation into the Trump Media merger. Most recently, he has been listed on search warrant affidavits alongside several associates – one of whom was charged last month with money laundering on top of earlier insider trading charges.
Postolnikov and the trust
At the end of 2021, Trump Media was facing financial difficulties after the originally planned merger with Digital World was delayed indefinitely when the Securities and Exchange Commission opened an investigation into the merger, reported Will Wilkerson, co-founder and whistleblower whistle, which is a well-established Trump Media interview.
Part of the problem was that Trump Media struggled to get financing because traditional banks were reluctant to lend millions to Trump’s social media company in the wake of the Jan. 6 Capitol attack, Wilkerson said.
Eventually, Trump Media found some lenders, including ES Family Trust, but the sequence of events was curious.
ES Family Trust was established on 18 May 2021, according to its creation papers. Postolnikov’s “user” access to the account was “verified” on 30 November 2021 by a Paxum Bank manager in Dominica. The trust was funded for the first time on 2 December 2021.
Trump Media then received the loans from ES Family Trust: $2m on 23 December 2021, and $6m on 17 February 2022.
The loans came in the form of convertible promissory notes, meaning ES Family Trust would gain a large stake in Trump Media because it was offering the money in exchange for Trump Media agreeing to convert the principal loan into “shares of Stock of the Company”.
Curiously, the notes were never signed. But the investment in Trump Media proved huge: although only Trump Media can know exact figures, ES Family Trust’s stake in Trump Media is worth between $20m and $40m even after the sharp fall in share price the company as a result. from a bad earnings report.
The ES Family Trust account also appears to have benefited Postolnikov personally. As the criminal investigation into the Trump Media deal intensified towards the end of last year, the trust recorded several transfers to Postolnikov with the subject line “Partial Loan Return”.
In total, the documents showed that the trust transferred $4.8m to Postolnikov’s account, although $3m was inexplicably “reversed”.
(On 17 July 2023, Postolnikov received $300,000. On 17 October 2023, Postolnikov received $1.5m, before it was reversed the next day; later the same day, Postolnikov received another $1.5m, which was also reversed. On 19 October 2023, Postolnikov has received the $1.5m for the third time, which is the last time.)
The reason for the creation of the trust remains unknown. Apart from the money that went to Trump Media, the trust’s statements show that the trust invested money directly with only two other companies: $10.8m to Eleven Ventures LLC, a venture capital firm, and $1m to Wedbush Securities, a wealth management company.
The current status of ES Family Trust is also unknown. The trust’s address is listed as a residence in Hollywood, Florida. But, according to property website Redfin, the six-bedroom home appears to have been sold in December 2023.
The creation papers also contained something notable: a statement that if the original trustee – a Paxum employee named Angel Pacheco – stepped down from the role, his successor would be a certain individual named Michael Shvartsman.
Dispersed money laundering investigation
Last month, federal prosecutors charged Michael Shvartsman, a close associate of Postolnikov, with money laundering in a superseding indictment that charged him and two others in July with insider trading of Digital World shares. Shvartsman and his co-defendants pleaded not guilty.
At least part of the evidence against Shvartsman came from a confidential informant for the DHS, court filings show: in a March 2023 meeting with the informant and an associate, Shvartsman mentioned a friend who owned a bank in Dominica and gave bridge loans to Trump Media .
“[Shvartsman] He said that a friend of his owns a bank in the island of Dominica and that he would be able to provide banking services to the citizens of Russia and Ukraine if the [confidential informant] other clients had a need for that service,” the DHS report said.
“[Shvartsman’s associate] he told the [confidential informant] which he does not think the SEC would be able to pursue [Shvartsman] about his part in the investment but he mentioned that [Shvartsman] effectively providing ‘bridge funding’ to the company behind the Truth Social media platform,” he said.
The unredacted portions of the DHS report do not specify whether Postolnikov was the “friend” and what the “bridge funding” referred to — but the report left open the possibility that Shvartsman also had a role with the trust .
A lawyer for Shvartsman declined to comment on his client’s relationship with Postolnikov. A spokesman for the US attorney’s office for the southern district of New York also declined to comment.
It is unclear whether federal prosecutors are aware that Postolnikov supported Trump Media through the ES Family Trust. At the same time, the money laundering investigation surrounding the Trump Media merger and the scrutiny of Postolnikov appear to have increased in recent months.
The investigation into possible money laundering appears to have begun after Wilkerson lawyers Phil Brewster, Stephen Bell and Patrick Mincey alerted the US attorney’s office in the southern district of New York about ES Family Trust loans in October 2022.
Months later, in June 2023, the FBI expanded its investigation to work in conjunction with the Department of Homeland Security’s El Dorado task force, which specializes in money laundering, and its Foreign Profit and Corruption group, which targets corrupt foreign officials using US entities to launder illegal money.
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