Two associates of President Donald Trump’s personal attorney Rudy Giuliani have been arrested on charges that they schemed to funnel foreign money to U.S. politicians while trying to affect U.S.-Ukraine relations, according to a newly unsealed indictment.
The two men, Lev Parnas and Igor Fruman, who had been helping Giuliani investigate Democratic presidential candidate and former vice president Joe Biden, were arrested Wednesday evening at Dulles International Airport in Virginia, where they had one-way tickets on a flight out of the country, officials said.
The pair have been under investigation by the U.S. attorney’s office in Manhattan. At an initial court appearance Thursday afternoon in Alexandria, Virginia, prosecutors said they were concerned Parnas and Fruman were flight risks, but that they would negotiate with their lawyers about a possible bail package.
Wednesday’s arrests mark the first criminal charges to emerge out of the U.S. government’s suddenly controversial relationship with Ukraine – tying discussions about diplomacy to alleged violations of campaign finance law.
The indictment, packed with allegations of political donations secretly made for the benefit of foreign interests, adds to the growing legal and political pressure on President Trump and his attorney as they try to fend off Democrats’ impeachment efforts.
“These allegations are not about some technicality, a civil violation or an error on a form,” said William Sweeney, Jr., head of the FBI office in New York. “This investigation is about corrupt behavior, deliberate lawbreaking.”
Jay Sekulow, another lawyer representing Trump, said: “As the indictment states neither the President nor the [Trump] campaign were aware of the allegations.”
According to the indictment unsealed in New York, Parnas, Fruman and other defendants “conspired to circumvent the federal laws against foreign influence by engaging in a scheme to funnel foreign money to candidates for federal and state office so that the defendants could buy potential influence with the candidates, campaigns, and the candidates’ governments.”
The indictment doesn’t name the recipients of the money, but many are identifiable by the facts described in the document.
The Justice Department charges that Parnas and Fruman disguised the source of a $325,000 donation made in 2018 to America First, the main pro-Trump super PAC, by giving the money in the name of Global Energy Producers (GEP), a purported liquid natural gas company they controlled. Federal prosecutors say the company was, in essence, a front used to disguise the real source of the funds. The money for the political action committee actually came from “a private lending transaction between Fruman and third parties,” according to the indictment, which does not offer any further detail about the source of the money, and does not publicly identify America First as the recipient.
After the charges were announced Wednesday, the political action committee issued a statement acknowledging the May 2018 donation from GEP, and saying that because of litigation over the donation, that money had been placed in a separate bank account and not used for any purpose, as they await resolution of the legal issues.
“We take our legal obligations seriously and scrupulously comply with the law and any suggestion otherwise is false,” the committee said in its statement.
According to the indictment unsealed in New York, Parnas, Fruman and other defendants “conspired to circumvent the federal laws against foreign influence by engaging in a scheme to funnel foreign money to candidates for federal and state office so that the defendants could buy potential influence with the candidates, campaigns, and the candidates’ governments.”
The indictment does not mention Giuliani or suggest that he was connected to the alleged crimes. Giuliani did not immediately return calls seeking comment.
Parnas has told The Washington Post that Giuliani is a “very good friend” but their relationship is not long-standing. Parnas said he got to know Giuliani while fundraising for Trump’s 2016 campaign. “The relationship bonded and built over time. We’re just very close,” he said.
In May, Giuliani tweeted that Parnas and Fruman were his “clients.” He told The Post recently that the relationship involved payment to his firm but said it was not connected to his work involving Biden. Giuliani said they wanted advice for a business venture developing “security technology” and that his work was done on behalf of the two men and other investors, whom Giuliani would not name. “They wanted my advice so I gave it to them and my staff wrote the report and delivered it to them and that was concluded pretty much,” he said.
Prosecutors say Fruman and Parnas schemed to donate money to an unidentified U.S. congressman, at the same time they were asking that congressman to get the U.S. ambassador to Ukraine removed from her job.
In the spring of 2018, Parnas met with the congressman seeking his “assistance in causing the U.S. government to remove or recall the then-U.S. Ambassador to Ukraine,” the indictment alleges. “Parnas’s efforts to remove the Ambassador were conducted, at least in part, at the request of one or more Ukrainian government officials.”
The indictment does not identify those officials.
Political donations to the congressman and other details described in the indictment match former Texas Republican Pete Sessions, who lost his reelection bid last year. A spokesman for Sessions did not immediately respond to requests for comment.
In May 2018, around the time the indictment says Parnas and Fruman committed to raising $20,000 for the congressman, Sessions wrote a letter to Secretary of State Mike Pompeo complaining about the ambassador at the time, Marie Yovanovitch, and saying she was biased against Trump. She was recalled early from her post a year later, after Giuliani told Trump that she needed to be ousted.
John Dowd, an attorney for Parnas and Fruman, did not immediately respond to requests for comment.
However, in a letter Dowd wrote to the House Intelligence Committee last week, he detailed the complex relationships that Parnas and Fruman have with people at the center of the Ukraine inquiry, including the president. “Messrs. Parnas and Fruman assisted Mr. Giuliani in connection with his representation of President Trump,” the letter said, while rejecting the committee’s request for information about their transactions as an overbroad effort to “harass, intimidate and embarrass my clients.”
The 21-page indictment also alleges a separate scheme stretching from June 2018 to April of this year in which Parnas, Fruman and two other defendants, David Correia and Andrey Kukushkin, conspired to make political donations secretly funded by an unidentified Russian businessman in the hopes of winning support for a marijuana business.
The plan, according to prosecutors, was to acquire retail marijuana licenses in Nevada and other states. In September 2018, Parnas, Fruman, Correia, Kukushkin and the Russian businessman met in Las Vegas to discuss the venture, the indictment charges. However, the group made efforts to hide the foreign national’s role because of what Kukushkin allegedly described as the businessman’s “Russian roots and current political paranoia about it.”
To fund the effort, the Russian businessman allegedly gave the others two payments totaling $1 million, and the American partners set out to try to win political support for their business plan. The four defendants “used those funds transferred by Foreign National-1, in part, to attempt to gain influence and the appearance of influence with politicians and candidates,” the indictment charges.
In October 2018, Parnas, Fruman and Kukushkin attended a campaign rally for an unidentified political candidate in Nevada, an event also attended by a different Nevada state politician, according to the indictment. They sent their Russian moneyman photographs of themselves posing with the second candidate, officials said. After the event, Fruman donated $10,000 to that second candidate, but authorities say it was actually the Russian’s money.
The planned marijuana business faltered, however, when the men did not apply in time for a recreational marijuana license, missing a September 2018 deadline. Kukushkin told the Russian that they were “2 months to late to the game unless we change the rules” and suggested a particular Nevada state official’s support was needed to take it further, according to the indictment.
Parnas and Fruman are charged with falsification of records and false statements to the Federal Election Commission; all four defendants are charged with conspiracy.
Parnas and Fruman have little history of political involvement but emerged suddenly in a circle of elite Trump donors after Parnas gave $50,000 to support Trump’s election in 2016.
Parnas and Fruman began scheming in March 2018 “to advance their personal financial interests and the political interests of at least one Ukrainian government official with whom they were working,” according to the indictment. “To advance that scheme, they made a $325,000 contribution to an independent expenditure committee and a $15,000 donation to a second such committee.”
A Justice Department official said Attorney General William P. Barr was first briefed on the case in February, shortly after he was confirmed. He received more briefings in recent weeks, and was informed Wednesday evening that the men would be charged and taken into custody, the official said.
“He believed it was an important case, and so has been supportive” of the New York prosecutors’ work on it, the official said.
It was not immediately clear whether Barr had discussed the case with Trump.
Previous social media posts and interviews with Parnas and Fruman indicate they interacted with both Trump and his son Donald Trump Jr., and had attended events at Trump’s Mar-a-Lago Club in Florida and at the White House. Fruman attended a fundraiser held at Mar-a-Lago in March 2018.
In a now-deleted Facebook post that was unearthed by BuzzFeed News and the Organized Crime and Corruption Reporting Project, Parnas displayed photos of himself and Trump at an event that apparently took place at the White House on May 1, 2018.
Later that month, Fruman gave an interview to a Russian-language publication, in which he said that he and Parnas had attended a small group meeting with Trump in Washington the previous week to discuss the upcoming midterm elections.
On May 21, 2018, Parnas posted a photo online of himself and Fruman with Trump Jr. and Tommy Hicks, a Republican fundraiser and close friend of the president’s son, at what he wrote was a breakfast in California.
Parnas has told The Post that he decided to get involved politically because he was a passionate supporter of Trump’s candidacy after growing up in New York and selling Trump condos in the city when Trump’s late father, Fred Trump, was still running the Trump Organization.
In May 2018, about six months before the men began working with Giuliani on his Biden investigation, a Florida business established by Parnas received a $1.26 million wire transfer from an account whose owner was represented by a real estate lawyer who specializes in assisting foreign buyers of U.S. property, court documents and corporate filings show.
Two days later, the pro-Trump super PAC, America First, reported receiving $325,000 from Global Energy Producers, the newly-created company controlled by Parnas and Fruman.
Last year, the nonprofit Campaign Legal Center filed a still-pending complaint with the FEC over the donation, alleging that it appeared to be a straw donation that masked the identity of the original contributor.
Parnas told the Miami Herald last week that the money for the super PAC donation was from proceeds from the sale of a Miami-area condominium.
The real estate lawyer involved in the transfer, Russell Jacobs, did not respond to requests for comment.
Since late 2018, the two Florida-based business executives have been assisting Giuliani’s push to get Ukrainian officials to investigate Biden and his son, as well as Giuliani’s claim that Democrats conspired with Ukrainians in the 2016 campaign. They have also been pursuing opportunities in Ukraine for a new liquefied natural gas venture.
Parnas said he and Fruman helped set up a Skype call for Giuliani in late 2018 with Viktor Shokin, who was Ukraine’s prosecutor general from 2015 to 2016, and an in-person meeting in New York in January 2019 with Yuri Lutsenko, then Ukraine’s prosecutor general.
(c) 2019, The Washington Post · Devlin Barrett, John Wagner, Rosalind S. Helderman · 
{Matzav.com}