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Apr 12, 2018

Trump’s mystery mansion

Co-produced with PRX Logo

In 2008, a small-time scam artist transferred a Beverly Hills, California, mansion to Donald Trump for $0. Reveal reporters Lance Williams and Matt Smith tried to figure out why. The people involved in the deal say it was all a mistake. Real estate experts have never seen anything like it. Join us for a stranger-than-fiction tale on this special Reveal podcast.

Dig Deeper

  • Read: A small-time scam artist gave Trump a mansion for $0. Why?

Credits

Matt Smith, Lance Williams,, Sukey Lewis, Andy Donohue, Cheryl Devall

Support for Reveal is provided by the Reva and David Logan Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, The John S. And James L. Knight Foundation, the Heising-Simons Foundation and the Ethics and Excellence in Journalism Foundation.

Reveal is a co-production of The Center for Investigative Reporting and PRX.

Transcript

Reveal transcripts are produced by a third-party transcription service and may contain errors. Please be aware that the official record for Reveal's radio stories is the audio.
Al Letson: From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson. Lance Williams is a reporter at Reveal. One day last year he was just minding his business out of the office when he got an intriguing tip.
Lance Williams: I was having lunch at a restaurant and at the next table was a guy I knew from California politics. He said, "He knew a guy who knew about a really unusual real estate deal down in Beverly Hills involving the future President. Did I want to know about it?"
Al Letson: Can I just say that that is like the most gumshoe hardcore news reporter story I've heard in a while?
Lance Williams: Well-
Al Letson: You're like classic.
Lance Williams: You never know where a story is going to come from and sometimes it's just you happen to be at a place and see a guy.
Al Letson: It's the kind of tip you just have to follow.
Lance Williams: He put us together and away we went.
Al Letson: Lance and his reporting partner, Matt Smith, started reviewing public documents. What they showed was that in 2008, future President Donald Trump, got a $10 million mansion in Beverly Hills for nothing. Then, he turned it around and sold it for 9.5 million a year later. I'm here with Lance and Matt to talk about what they found and what people close to the deal say went down.
Let's kind of set the scene and go back a little bit. 2007-2008, who is Donald Trump at this time? Because he's not a political candidate at this point. He's just Donald Trump the businessman, right?
Lance Williams: Well, he's the star of the Apprentice, which had been a huge hit when it began in the early 2000s. By 2007, the ratings were slumping and they decided to move it to L.A. hoping to get a boost. He was out here with his wife and new son living up on Mulholland Drive and he became kind of a man about town. He even got his star on the Hollywood Walk of Fame holding his little boy in his arms.
Donald Trump: That's Barron. He's strong, he's smart, he's tough, he's vicious, he's violent. All of the ingredients you need to be an entrepreneur. Most importantly, hopefully he's smart, because smart is really the ingredient. Barron, good luck.
Al Letson: He's vicious. I've never described my 10 month old ... Yeah, okay. He's in L.A. and knowing Donald Trump as we do, I imagine he's spending a lot of time in the Beverly Hills area.
Lance Williams: Well, he bought a mansion there in 2007 and he spent time at the Beverly Hills Hotel across the street. We know that Stormy Daniels, the exotic film star says that's where their liaison took place.
Al Letson: Matt, this property that we're looking at, that we're concerned about, is right across the street from that hotel in Beverly Hills, so this is a really upscale piece of land, right?
Matt Smith: Yeah, 100 yards exactly away from his favorite hotel. It's a big enough deal, this house is, that you can find videos on the internet. Beverly Hills, so it's palm trees-
Al Letson: Wow.
Matt Smith: Wide streets, and the house is actually big for the area. Big white house, you can fit a mega church inside it probably.
Al Letson: This thing is huge.
Matt Smith: Swimming pool, it's own tennis court that you could land a helicopter on. Inside is this sort of white 1980s make everything you can out of marble kind of sensibility. Everything white with sort of King Louie or Versailles-type touches, chandeliers.
Al Letson: Okay, so we've got this beautiful $10 million house. Donald Trump owns it, so what's the problem? Why are we looking at it? Because I imagine Donald Trump has big beautiful houses like this all over the country.
Matt Smith: Real estate deals can be complex, but this one was complex in ways that people we talk to have never ever seen.
Al Letson: Tell me how this deal gets started. Who owns this property and who'd they sell it to?
Lance Williams: Sure. It's Beverly Hills, so the house has a great pedigree. For a long time it was owned by the family of the dictator of Gabon, Omar Bongo. He sold it in ... Or that family sold it in '07 to Leonard and Selma [Fish 00:04:19]. They are millionaire real estate investors and also big time Republican political donors. They spent the night at the White House when George W. was there. They bought it, held it for a year, never lived in it, but had some parties there, and then moved to flip it.

 

Al Letson: They put it on the market and Donald Trump gets it?

 

Lance Williams: Yes, but not very directly at all. In the summer of 2008, the Fish's file a deed saying that they've sold the place to a guy called [Mocalus Gergus 00:04:53], an Egyptian pastor of a little tiny Baptist church. A man who makes $48,000 a year, an unlikely buyer for sure, and six weeks later Mr. Gergus flips it to a Trump shell corporation for no money. That's what the documents show.

 

Al Letson: The future President gets a big mansion for free, then what does he do with it?

 

Lance Williams: He flips it, like on reality TV.

 

Al Letson: All this seems really, I don't know, out of the ordinary. People involved with this deal, what do they have to say?

 

Lance Williams: We got the idea that this wasn't their favorite topic. We reached out to [Igor Korbatov 00:05:31], the seller's lawyer. We got no response until we went to the Beverly Hills School Board and spoke to his wife, who is President of the Board of Education, and the seller's daughter. After that, Mr. Korbatov said, "Gergus had been a prospective buyer, but the deal for the mansion fell through." Months later, when Trump bought the house, "The wrong deed was filed by mistake," he said. "Human error happens all the time," he said. Unfortunately, Mr. Korbatov ignored important questions.

 

How was the mistake discovered? How did Gergus, who had little money and a history of foreclosures and lawsuits, qualify to buy a $10 million home? How in the world was he persuaded to give up title to the mansion once his name was on the recorded deed? Now, a spokesman for First American Title Insurance said, "The company was to blame for the mistake," but he declined to answer questions. We interviewed a former escrow officer who worked on the deal, but couldn't remember it. She said, "She would never have approved filing the deed unless she had seen a sale's contract with Gergus' name on it and only after the money had been received."

 

Al Letson: There are some big red flags here. Let's take the first one, who's this Gergus guy?

 

Matt Smith: Mocalus Gergus is an Egyptian national who touts himself online as a major Middle East pop star. We couldn't find any good evidence of that. Has touted himself to parishioners at his small church he preached at as a major businessman on the side. That didn't seem to be true either.

 

Al Letson: The Trump organization declined to comment for this story, but how did the other people that are a part of this story, how did they respond to it?

 

Lance Williams: Well, Igor Korbatov is the son-in-law and the attorney for the Fish's. Over a period of a couple of months, he sent us several emails. The gisting was that they had prepared a deed to grant the place to Mocalus because he was a potential buyer, but that deal fell through, and so at closing to the Trump organization somebody pulled out this old signed deed and recorded that by mistake.

 

Al Letson: Okay, so I've bought a house before and when you buy a close, you go down to the title deed office, you sign all these papers, checks are exchanged, all that type of stuff. How do you make that kind of mistake? Because, I mean, there are people there that are paid to make sure that those type of mistakes don't happen.

 

Lance Williams: Sure thing. There are attorneys, agents for buyer and seller, a notary, and everybody's there, and everybody's getting paid good money to make sure, number one, that the buyer gets the house. In this case, the sellers and the title company both say, "Geez, we just accidentally filed the wrong deed."

 

Al Letson: Is that a possible explanation?

 

Lance Williams: Well, no. The lawyers we talked to, and some of them I talked to four and five times, they got sick of me calling up. They were laughing at me in the phone when I was saying, "Well, how could this have happened?"

 

Matt Smith: What we spent a good deal of time trying to figure out is how could you possibly make a mistake that gave away a massive mansion?

 

Al Letson: What's another possible explanation for this weird deal that really doesn't make any sense any which way you look at it?

 

Matt Smith: Well, the thing that just weighed on us more and more with passing months was the illusiveness of an explanation. If you have on implausible aspect of a deal, in this case, Mocalus Gergus walking through the door and having a deed written up in his name and filed, well, that's hard to believe. One in a million mistakes happen all over the world all the time, why did it take six weeks to correct it? We're not G-man, we can't get into wire transfers. We weren't able to get into the head of Mocalus Gergus. We just simply don't know what happened.

 

Lance Williams: We talked to many experts to try and figure this out. One was Ross Delston, a lawyer who consults with the International Monetary Fund on Financial Crimes. He said, "He couldn't make sense of the deal from the available information, but he thought it merits scrutiny."

 

Ross Delston: Lots of oddities, lots of unusual things here, and enough to get any law enforcement investigation or prosecutor quite excited about all of the anomalies that are found in this set of transactions.

 

Al Letson: Tell me, what's going on with the property now? Does Donald J. Trump still own it?

 

Lance Williams: No, he only held it for about 11 months and then flipped it, selling it for $9.5 million. By then, the market was in decline because of the economic crisis. Of course, the previous year's reported sale price was around 10, so that's a paper loss anyway.

 

Al Letson: What was it like to report on the story?

 

Lance Williams: Well, it was hard slogging. We took it as far as we could.

 

Al Letson: What is the broader significance of the story? I mean, what does it tell us about the man who is the President of the United States? Matt?

 

Matt Smith: Many of the stories coming out over the course of the past year and a half about Donald Trump's finances, stories like that in the New Yorker, certainly in the Washington Post, certainly in the New York Times about India, the Middle East, eastern Europe. This real estate deal doesn't seem right. Now we have one in the United States and we're trying to unpack it.

 

Lance Williams: It's one more exotic weird deal in his background. It helps inform you about who he is and where he came from.

 

Al Letson: We don't have all the answers yet on this deal. We do have more details in Lance and Matt's story on our website, RevealNews.org. If you know anything that can help them uncover more, get in touch with the reporters through our website, or leak to us securely at Leak.RevealNews.org.

 

Our lead producer for this podcast is Sukey Lewis. Cheryl Duval and Andy Donahue share the editing honors. Our production manager is Mwende Hinojosa. Our sound design team is the dynamic duo J. Breezy, Mr. Jim Briggs and Fernando, my man, yo, Aruda. They had help this week from the Catwoman Squad, Catherine Raymondo and Cat Shugnit. Our acting CEO is Christa Scharfenberg. Amy Pyle is our Editor in Chief. Our Executive Producer is Kevin Sullivan. Our theme music is by Comarado Lightning. Support for Reveal is provided by the Reva and David Logan Foundation, the John D. and Catherine T. MacArthur Foundation, the Jonathan Logan Family Foundation, the Ford Foundation, the Heising Simons Foundation, and the Ethics and Excellence in Journalism Foundation. Reveal is a co-production of the Center for Investigative Reporting and PRX. I'm Al Letson, and remember, there is always more to the story.