Giuliani’s Ukraine Associates Indicted on Campaign-Finance Fraud

Rudy Giuliani, an attorney for President Donald Trump, speaks in Washington on May 5, 2018. (AP file photo/Andrew Harnik)

MANHATTAN (CN) – Days after reports emerged that Rudy Giuliani sought profits for Soviet-born real estate entrepreneurs in Ukraine, those two men were arrested at Dulles Airport, heading out of the country with one-way tickets to Vienna.

Federal prosecutors unsealed the indictment against Lev Parnas and Igor Fruman on Thursday morning in the Southern District of New York, saying the pair conspired to launder foreign money into U.S. elections through limited liability companies by using straw donors.

“They sought political influence not only to advance their own financial interests but to advance the political interests of at least one foreign official – a Ukrainian government official who sought the dismissal of the U.S. ambassador to Ukraine,” Manhattan U.S. Attorney Geoffrey Berman announced at a press conference.

The bombshell charges instantly reverberated on Capitol Hill. House Democrats had issued subpoenas to the Soviet-born entrepreneurs in connection with an ongoing impeachment inquiry. Their attorney John Dowd, who was also President Donald Trump’s former lawyer, previously told Congress his clients would refuse to comply with the depositions, which had been scheduled for today and Friday.

Attorney General William Barr, who met with Southern District prosecutors on Wednesday, told NBC News today that he had been aware of an investigation into Parnas and Fruman shortly after he came into office this past February.

This Facebook screen shot provided by The Campaign Legal Center, shows from left, Donald Trump, Jr., Tommy Hicks, Jr., Lev Parnas and Igor Fruman, posted on May 21, 2018. (The Campaign Legal Center via AP)

Once the criminal charges became public this morning, three House Committees notified Dowd that stonewalling their demands for documents would come at a price.

“Your clients’ failure or refusal to comply with the subpoenas, including at the direction or behest of the President or the White House, shall constitute evidence of obstruction of the House’s impeachment inquiry and may be used as an adverse inference against your clients and anyone with whom they are acting in concert, including the President,” the 4-page letter warns.

Berman characterized the charges against the pair as being, at heart, about the “integrity of our elections.”

“Parnas and Fruman, who had no significant prior history of political donations, sought to advance their personal financial interests and the political interests of at least one Ukrainian government official with whom they were working,” Berman wrote in the 21-page indictment.

Assistant U.S. Attorney Nicolas Roos, who previously landed a three-year sentence for Trump’s ex-fixer Michael Cohen, is the lead prosecutor on the case.

“In order to conceal from third parties, including creditors, their sources of funding and capital, Parnas and Fruman created a limited liability corporation, Global Energy Producers, and then intentionally caused certain large contributions to be reported in the name of GEP instead of in their own names.”

When news reports about these contributions first became public, one of Parnas’ employees remarked: “That is what happens when you become visible … the buzzards descend,” according to the indictment.

Prosecutors say that Parnas responded: “That’s why we need to stay under the radar.”

Fruman and Parnas made their initial appearances Thursday afternoon before a federal judge in a Virginia suburb of Washington, D.C. In a somewhat unusual move, the hearing was postponed so attorneys could discuss proposed detention conditions with the two men.

After the two sides consulted, U.S. Magistrate Judge Michael Nachmanoff ruled that both men could be released on $1 million bond, with Fruman’s secured by a home he owns and Parnas’ by a business. Nachmanoff also imposed travel restrictions and location monitoring on the men and ordered them not to talk about the case with each other without counsel present.

Neither will be released until all of the conditions Nachmanoff imposed are met.

Kevin Downing, an attorney who represented Paul Manafort during his bank and tax fraud trial in the same court last year, represented both defendants today, but he will not have involvement in the case once it shifts to New York.

Fruman wore a loose-fitting white T-shirt. Parnas wore a black T-shirt and dark pants and had his thinning gray hair slicked back.

Reports about Global Energy Producers’ mysterious donations to pro-Trump super-PACs have circulated for more than a year, but whispers about its role amplified into a roar as Giuliani’s work in Ukraine became a pivot point of President Donald Trump’s impeachment inquiry.

Parnas and Fruman made a $325,000 donation to one Trump-allied political action committee and $15,000 to another in 2018. In an explosive investigation this week, The Associated Press reported that this ingratiated the relatively unknown entrepreneurs into Republican inner circles, scoring meetings with President Donald Trump at the White House and Mar-a-Lago.

Reverberating beyond the White House, today’s indictment alleges that the Giuliani-connected businessmen raised funds for an unidentified congressman with whom they sought a political favor.

“At and around the same time Parnas and Fruman committed to raising those funds for Congressman-1, Parnas met with Congressman-1 and sought Congressman-1’s assistance in causing the U.S. Government to remove or recall the then-U.S. Ambassador to Ukraine,” the indictment states.

Citing knowledgeable sources, NBC reported that this congressman was ex-Representative Pete Sessions, a Texas Republican who reportedly received more than $3 million from the super-PAC America First Action in 2018.

The next year in May, ex-Ambassador Marie Yovanovitch was recalled from her post in Ukraine.

Two U.S. businessmen — David Correia and Andrey Kukushkin, who was born in Ukraine — also have been charged with the conspiracy. While Correia remains at large, Kukushkin made an appearance Thursday afternoon in the Northern District of California.

Prosecutors quote Kukushkin as disguising a foreign national’s involvement with a marijuana company and its political donations because of “his Russian roots and current political paranoia about it.”

U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco declined to set bail for Kukushkin, whom prosecutors deemed a flight risk because of his Ukrainian passport and access to “large amounts of money from foreign sources.” When he was arrested at his Bay Area residence Wednesday, he allegedly told the FBI that his U.S. passport was the only one they needed to see.

Kukushkin’s attorney Alan Dressler had requested that Kukushkin be allowed to return home, saying he’s lived in the Bay Area since 1991 and only flies back to Ukraine to visit relatives. His mother, who appeared in court Thursday, was also willing to put up a surety.

“This is a case of notoriety. Once we have the passport in the court’s hands, he’s not a flight risk. It’s not like he’s looking at 100 years here,” Dressler said, adding, “he doesn’t have a pile of cash hidden somewhere.”

Corley wasn’t swayed. “I’m prepared to hear all that tomorrow,” she said, and remanded Kukushkin to the custody of the U.S. Marshal Service until Friday at 10:30 a.m., at which time the pretrial services department will have completed its report and presented a bail recommendation.

Kukushkin is also due to be arraigned in the Southern District of New York on Oct. 17. Assistant U.S. Attorney Claudia Quiroz requested that he travel in custody “to make sure he gets there,” noting both Parnas and Fruman were arrested at Dulles International airport “trying to leave the U.S. with one-way tickets.”

The indictment charges four counts of conspiring to defraud the United States, false statements to the Federal Elections Commission and falsification of records.

%d bloggers like this: