Two Giuliani Associates Plead Not Guilty to Campaign Charges

(Bloomberg) -- Two associates of Rudy Giuliani pleaded not guilty to charges that they conspired to launder foreign campaign contributions into U.S. elections, in a case that has heightened scrutiny of Giuliani’s foreign business ties and his work as personal lawyer to President Donald Trump.

The defendants, Igor Fruman and Lev Parnas, entered their pleas Wednesday in a brief arraignment hearing before U.S. District Judge Paul Oetken in Manhattan federal court. They were arrested two weeks ago at Dulles International Airport near Washington as they sought to leave the country with one-way plane tickets.

The pair were working with Giuliani in urging the Ukrainian government to investigate one of Trump’s top Democratic rivals, Joe Biden, over his son’s business interests there.

Both wore suits with American flag lapel pins. They were allowed to remain free on $1 million bond but are required to remain under house arrest with electronic monitoring.

In a brief statement outside court after the hearing, Parnas said: “Many false things have been said about me and my family. I look forward to defending myself in court and being vindicated.”

His lawyer, Edward McMahon, complained of “leaks from the highest levels of our government” about the case but declined to specify whom he was referring to.

Prosecutors have said they have records of financial transactions from more than 50 bank accounts, calls on a dozen separate telephone lines and correspondence from 12 email addresses, suggesting the scope of the investigation is broader than Parnas, Fruman and two other co-defendants, David Correia and Andrey Kukushkin. Correia and Kukushkin have also pleaded not guilty. Authorities said the investigation is continuing.

Defense lawyers raised concerns about the gathering of evidence that might have violated attorney-client privilege, since Parnas and his companies were using Giuliani as their lawyer. They also said issues of executive privilege may arise as Giuliani was also working as Trump’s lawyer.

Prosecutor Rebekah Donaleski of the Manhattan U.S. attorney’s office said authorities were using a so-called taint team to review evidence for privileged material before it’s turned over to the prosecution team.

Parnas and Fruman figure into an episode now under scrutiny by congressional investigators as part of the impeachment inquiry of Trump, when he removed the U.S. ambassador to Ukraine, Marie Yovanovitch.

Prosecutors say the pair, working at the behest of unnamed Ukrainian officials, raised funds for then-U.S. Representative Pete Sessions of Texas, while seeking -- and receiving -- his help in advocating for the removal of Yovanovitch.

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