Giuliani Ukraine Allies Arrested With One-Way Flight Tickets
Parnas and Fruman had been called to testify and hand over documents this week before Congressional committees.
(Bloomberg) -- A Ukraine-born ally of Rudy Giuliani was accused by U.S. prosecutors of skirting campaign contribution limits as part of a plot to oust the American ambassador to Ukraine, an episode now under scrutiny by a congressional committee weighing the impeachment of President Donald Trump.
The charges against Lev Parnas, Igor Fruman and two others add a dramatic twist to an impeachment inquiry focused on whether Trump wrongly pressured the Ukrainian government to investigate former Vice President Joe Biden while withholding aid to the country. Parnas and Fruman have made headlines in recent days for helping Giuliani, Trump’s personal lawyer, urge the Ukrainian government to probe the actions of Biden and his son.
FBI agents arrested the two men Wednesday evening at Dulles International Airport outside of Washington as they were leaving the country with one-way tickets. With Parnas and Fruman now confronting criminal charges, congressional subpoenas and a possible prison sentence if convicted, they may feel pressure to tell investigators what they know about Ukraine’s involvement in U.S. politics. Further details may also emerge at a trial.
“Protecting the integrity of our elections, and protecting our elections from foreign influence, are core functions of our campaign finance laws,” U.S. Attorney Geoffrey Berman in New York said in a brief statement. The investigation is continuing, he added.
Parnas and Fruman had been called to testify and hand over documents this week before Congressional committees in the impeachment inquiry. John Dowd, their lawyer before Congress, said last week that they wouldn’t cooperate, spurring the Congressional subpoena for the documents on Thursday. Dowd, who has previously represented Trump, said in his letter to Congress that “Parnas and Fruman assisted Mr. Giuliani in connection with his representation of President Trump.”
Trump said on Thursday he didn’t know Parnas or Fruman. “Maybe they were clients of Rudy,” he added.
A judge in Alexandria, Virginia, said the two could be released to home confinement with electronic monitoring after posting a $1 million bond. The indictment, which will be heard in New York, also names an American-born businessman, David Correia, and Ukraine-born Andrey Kukushkin. All are U.S. citizens.
Kevin Downing, a lawyer for both men, declined to comment after court.
Prosecutors said Parnas and Fruman committed to raising campaign funds for an unnamed U.S. congressman, and then sought his help last year in removing the U.S. ambassador to Ukraine at the time, Marie Yovanovitch. The effort was undertaken “at the request of one or more Ukrainian government officials,” according to the indictment. Yovanovitch was recalled this year by the president, a decision that Democrats in Congress are now probing.
The description of Congressman-1 in the indictment matches that of former Texas Congressman Pete Sessions, who received direct campaign contributions from Fruman and Parnas and was also the beneficiary of more than $3 million in independent campaign spending by the America First Political Action Committee, a campaign fund closely aligned with Trump that seeks to advance issues championed by him.
Sessions, a Republican who lost re-election in 2018, wrote a letter to Secretary of State Mike Pompeo last year saying he had evidence that Yovanovitch had disparaged the Trump administration and suggesting she be expelled. In a statement Thursday, Sessions said he doesn’t know if he is Congressman-1, that the defendants are accused of concealing the scheme from political candidates, and that he wrote the letter because political appointees shouldn’t assail the president.
“I was first approached by these individuals for a meeting about the strategic need for Ukraine to become energy independent,” he added. “There was no request in that meeting and I took no action. Over time, I recall that there were a couple additional meetings. Again, at no time did I take any official action after these meetings.”
America First
Federal law prohibits foreign campaign donations to American politicians at all levels of government, as a means of limiting foreign government influence over U.S. policy.
Prosecutors also accused Parnas and Fruman of making an illegal $325,000 donation to the America First PAC. They are accused of creating a purported liquid natural gas company, Global Energy Producers, to donate the funds even though it had no substantive business operations.
In a statement, America First said it segregated the Global Energy contribution after a complaint was filed with the Federal Election Commission. “We take our legal obligations seriously and scrupulously comply with the law, and any suggestion otherwise is false,” according to the statement.
Jay Sekulow, the president’s personal lawyer, said in an interview that Trump was unaware of Parnas and Fruman’s alleged actions.
“Neither the president, nor the campaign, nor the PACs were aware of the financial issues involved,” he said.
Marijuana Business
A call to Giuliani wasn’t immediately returned. He and Trump have raised unfounded allegations that Joe Biden blocked a Ukrainian prosecutor from investigating a natural gas company whose board included Hunter Biden.
All four men are also accused by the U.S. of funneling campaign contributions to a Nevada state politician as part of an effort to form a recreational marijuana business. The money behind that contribution came from a unidentified Russian businessman -- identified as Foreign National 1 -- who needed retail marijuana licenses to operate, the U.S. said.
“The defendants planned to use Foreign National-1 as a source of funding for donations and contributions to state and federal candidates,” according to the indictment. “Foreign National-1 then arranged for two $500,000 wires” to be sent to a U.S. account controlled by Fruman and another person who isn’t named.
Parnas and Fruman, who was born in Belarus, have been photographed with political figures including Trump, his eldest son, the president’s allies, and congressmen. Parnas, who’s been chased for years by creditors for unpaid debts, was facing eviction from his house in Florida last year, court records show. A family in New York has been trying for nearly a decade to recoup hundreds of thousands of dollars it claims Parnas borrowed to finance a movie project that ultimately failed, according to court filings.
In May 2018, he posted to Facebook a photo of him and Trump at the White House and wrote, “incredible dinner and even better conversation.”
Fruman, a Russian-speaking businessman who deals in international trade, told a Russian-language outlet last year that he serves as a channel between Trump and Kiev’s Jewish community. Parnas is a former stockbroker who worked for five brokerages that shut down after regulators accused them of lying, cheating customers and breaking industry rules, records show.
‘Serious’ Risk
Kukushkin appeared in federal court in San Francisco on Thursday, where prosecutors said he posed a “serious” risk of fleeing and that he refused to surrendered his Ukrainian passport. A Russian businessman wired him $1 million last year, they said.
Correia is not in custody. Correia was Parnas’s business partner on a venture -- Fraud Guarantee -- that advertises tools to protect investors, according to the company’s website.
Yovanovitch, the former U.S. ambassador to Ukraine who is still a member of the foreign service, is scheduled to testify behind closed doors on Friday to three congressional committees that are focusing on Trump’s Ukraine interactions. It is not clear whether the White House or State Department will seek to block her testimony, as it has with some others.
On Wednesday, Attorney General William Barr was briefed on the planned arrests while visiting prosecutors in Manhattan, according to a person familiar with the matter. He learned of the case when he became attorney general, indicating it was initiated before he assumed his post.
--With assistance from Gerald Porter Jr., Billy House, Bill Allison, Joel Rosenblatt, Shahien Nasiripour and Chris Dolmetsch.
To contact the reporters on this story: Christian Berthelsen in New York at cberthelsen1@bloomberg.net;Andrew Harris in Washington at aharris16@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, David S. Joachim
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