Trump's DWAC Stock Tanks: How A Trump Media Money Laundering Investigation Has Putin Undertones

Zinger Key Points
  • A SPAC to bring Donald Trump's media company public has faced several setbacks.
  • A newly reported investigation shows the media company was the subject of potential money laundering.

A SPAC merger to bring Donald Trump’s media company and social media platform public has faced delays and setbacks and remains up in the air getting approval.

A new report highlighted an investigation into the target company over money laundering.

What Happened: In October 2021, Trump Media & Technology Group announced a SPAC merger with Digital World Acquisition Corp DWAC. The news sent shares of the SPAC significantly higher on the details showing plans for a social media platform, video content and more media efforts by the former president.

The SPAC has faced a number of setbacks including merger vote delays and investigations by the U.S. Securities and Exchange Commission and federal grand juries.

A report on Wednesday from The Guardian linked the media company of the former president to money laundering allegations.

New York prosecutors investigated Trump Media about payments received that allegedly had ties to Russia. The investigation came alongside the company already being under criminal investigation.

The payments were two loans wired to Trump Media from the Caribbean for a total of $8 million and traced to entities that “appear to be controlled in part by the relation of an ally of Russian president Vladimir Putin.”

A $2 million payment in December 2021 came at a time when the merger needed cash to fight off delays. The investigation showed DWAC’s CEO Patrick Orlando sourced the $2 million loan wired from Paxum Bank, a company registered in Dominica.

In 2022, a $6 million payment came from ES Family Trust. Receipts revealed the ES Family Trust was listed as the lender on the original $2 million payment, which could connect the two companies.

Orlando declined to provide details on the identities of the lenders or the origin of the payments wired to Trump Media.

The investigation pointed to a Russian connection with Anton Postolnikov, named as a part-owner of Paxum Bank. Postolnikov is related to Aleksandr Smirnov, an ally of Russian President Vladimir Putin.

Smirnov is the head of Rosmorport, a maritime company controlled by the Russian government. Smirnov was previously a member of the executive office of Putin.

The payments of $8 million were part of a tip to regulators from a whistleblower. The whistleblower said Trump Media considered returning the money, but it made up a large amount of the $12 million in cash on hand and was significantly needed.

Several Trump Media executives including CEO Devin Nunes, who is a former Congressman, and Donald Trump Jr. were aware the $2 million payment was coming through and authorized it, though their knowledge of where the money came from is still being investigated.

Orlando is an SEC-licensed broker-dealer and was subject to anti-money laundering and “Know Your Customer” rules. Orlando arranged the $8 million in funding according to the investigation.

No charges have been filed at this time. Prosecutors would have to prove that the defendants knowingly accepted money from unlawful transactions and tried to hide it. Parties involved declined to comment to The Guardian.

Related Link: Trump SPAC Merger Has Provisions For Presidential Run, Prison Time 

Why It’s Important: The Guardian reported the investigation into money laundering could further delay the merger between Digital World Acquisition Corporation and Trump Media.

Since Russia invaded Ukraine in February 2022, the country has faced sanctions from the U.S. and companies and individuals linked to Putin have seen falling outs or investigations.

Trump announced a campaign to run for president in the 2024 election. The newly investigated ties between his media company and Putin could quickly become a talking point among his competition.

Trump served as the chairman of Trump Media at the time the payments were received. While the investigation didn’t pinpoint Trump's knowledge of the loans or where they came from, the whistleblower said the former president was interested in the funding.

The latest investigation puts another potential nail in the coffin of the SPAC merger still under investigation and has delayed its merger vote until September 2023. The reinstatement of Trump on Twitter and Facebook, investigations, delayed shareholder meetings, a rejected patent, and investors and executives exiting ties to Trump Media are among the many issues facing the merger. 

DWAC Price Action: Digital World Acquisition shares are down 4.23% to $12.69 on Wednesday versus a 52-week trading range of $12.65 to $74.84.

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Posted In: M&ANewsPoliticsSmall CapLegalGlobalTop StoriesSECGeneralDevin NunesDonald TrumpDonald Trump Jrmoney launderingPatrick OrlandoRussiaSPACsTrump MediaTrump Media & Technology GroupTRUTH SocialVladimir Putin
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