2 Giuliani Associates Arrested for Campaign Finance Fraud
By Masood Farivar October 10, 2019
Two associates of President Donald Trump's personal attorney, Rudy Giuliani, have been arrested on federal charges of making hundreds of thousands of dollars in illegal contributions to Republican campaigns, including a pro-Trump super political action committee (PAC).
The two Florida-based businessmen, who allegedly lobbied for the ouster of a former U.S. ambassador to Ukraine last year, were being sought by House of Representatives impeachment investigators at the time of their arrest.
Lev Parnas, a Ukrainian-born U.S. citizen, and Igor Fruman, a Belarus-born U.S. citizen, were arrested by the FBI at Dulles International Airport outside Washington late Wednesday as they were departing the U.S., a law enforcement official said. They appeared in federal court in Alexandria, Virginia, Thursday afternoon.
The charges against the pair stem from a Federal Election Commission complaint filed last year by an independent watchdog that claimed the men set up a shell company in order to anonymously funnel foreign money to the pro-Trump super PAC called America First Action.
The 22-page indictment confirms the findings of the watchdog, Campaign Legal Center. According to the indictment, Parnas and Fruman used Global Energy Producers (GEP), a purported liquefied natural gas limited liability company, to contribute $235,000 to the super PAC in May 2018, and another $15,000 to a second political committee. Parnas gave $50,000 to Trump's 2016 election effort.
A Facebook screen grab provided by Campaign Legal Center shows Parnas with Trump at the White House on May 1, 2018. A second screen shot shows Parnas and Fruman with Donald Trump Jr., the president's eldest son, three weeks later.
Parnas and Fruman "sought 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. The Ukrainian official is not identified.
John Dowd, a lawyer for Parnas and Fruman, did not respond to a request for comment.
Two other defendants – Ukrainian-born Andrey Kukushkin and American-born David Correia – also are named in the indictment in connection with a separate campaign finance violation scheme. Kukushkin has been arrested in California, but Correia remains at large, the official said.
Parnas and Fruman have a history of working with Giuliani as the former New York mayor embarked on a mission this year to dig up political dirt on Trump's political rivals by pressing Ukrainian authorities to investigate former Vice President Joe Biden and his son, Hunter.
The men reportedly introduced Giuliani to two former Ukrainian prosecutors who claimed Joe Biden had a former chief prosecutor fired in 2016 in order to sabotage an investigation into a natural gas company where Hunter Biden held a lucrative board membership. One of the two former prosecutors later walked back much of his claims.
The businessmen's indictment comes as House investigators conducting an impeachment inquiry of Trump were pressing for their depositions. On Thursday, three House committees leading the impeachment inquiry subpoenaed Parnas and Fruman for documents related to the investigation.
The indictment does not mention Giuliani or the Ukraine scandal that triggered the impeachment investigation last month. However, it alleges that Parnas and Fruman committed to raise $20,000 to a then-sitting congressman – identified in press reports as former Republican Congressman Pete Sessions of Texas – and then enlisted the lawmaker's help with the removal of U.S. Ambassador to Ukraine, Marie Yovanovitch.
Sessions, an 11-term congressman, lost reelection last year.
The effort to have Yovanovitch recalled was made at the request of one or more Ukrainian officials, according to the indictment.
Trump recalled Yovanovitch from Ukraine on May 20. During a July 25 call to Ukrainian President Volodymyr Zelenskiy that is at the center of the impeachment inquiry, Trump described Yovanovitch as "bad news." Zelenskiy, too, was critical of Yovanovitch, complaining during the call that she "would not accept me as a new president well enough."
Yovanovitch is scheduled to give a deposition Friday to House impeachment investigators.
In a separate scheme involving all four defendants in the indictment, the quartet partnered with a Russian national to set up a recreational marijuana business in the U.S., and then conspired to make campaign contributions to U.S. politicians to help acquire state business licenses.
The unidentified foreign businessman allegedly made two $500,000 wire transfers to pay politicians, but his role in the scheme was concealed because of "his Russian roots and current political paranoia about it," according to the indictment.
The four defendants used the funds "to attempt to gain influence and the appearance of influence with politicians and candidates," the indictment says.
In November 2018, for example, Fruman used the funds to make $10,000 donations to two Nevada state political candidates. The politicians were unaware of the source of the funds, according to the indictment. Meanwhile, the group missed the deadline for a business license application, and the venture never got off the ground.
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