The charges relate to a $325,000 donation to a group supporting Trump’s reelection.
Lev Parnas and Igor Fruman, associates of Rudy Giuliani, were arrested Wednesday trying to board an international flight with one-way tickets at Dulles International Airport in Virginia, according to Geoffrey Berman, the U.S. attorney in Manhattan. No destination was disclosed.
Parnas and Fruman were arrested on a four-count indictment that includes charges of conspiracy, making false statements to the Federal Election Commission and falsification of records. The men had key roles in Giuliani’s efforts to launch a Ukrainian corruption investigation against Democratic presidential contender Joe Biden and his son Hunter.
The indictments mark the first criminal charges related to the Ukraine controversy. While they do not suggest wrongdoing by the president, they raise additional questions about how those close to Trump and Giuliani sought to use their influence.
Trump has dismissed the impeachment inquiry as baseless and politically motivated. As he was leaving the White House for a political rally in Minneapolis, Trump said he didn’t know Parnas or Fruman and hadn’t spoken with Giuliani about them.
“We have nothing to do with it,” Trump said.
Giuliani said he couldn’t comment and that he didn’t represent the men in campaign finance matters.
Records show that Parnas and Fruman used wire transfers from a corporate entity to make the $325,000 donation to the America First Action committee in May 2018. But wire transfer records that became public through a lawsuit show that the corporate entity reported as making the transaction was not the source of the money.
The big donation to the Trump-allied PAC was part of a flurry of political spending tied to Parnas and Fruman, with at least $478,000 in donations flowing to GOP campaigns and PACs in little more than two months.
The money enabled the relatively unknown entrepreneurs to quickly gain access to the highest levels of the Republican Party, including meetings with Trump at the White House and Mar-a-Lago in Florida.
Prosecutors also allege that Parnas urged a congressman to seek the ouster of the U.S. ambassador to Ukraine, at the behest of Ukrainian government officials. That happened about the same time that Parnas and Fruman committed to raising more than $20,000 for the politician.
The congressman wasn’t identified in court papers, but the donations match campaign finance reports for former Rep. Pete Sessions, a Texas Republican who lost his re-election bid in November. In May 2018, Parnas posted a photo of himself and his business partner David Correia with Sessions in his Capitol Hill office, with the caption “Hard at work!!”
Parnas and Fruman appeared in court Thursday and were ordered to remain jailed as a bail package was worked out. They are due in court in New York next week. Kevin Downing, the lawyer who represented former Trump campaign chairman Paul Manafort on charges that he hid millions of dollars that he earned in Ukraine advising politicians there, was representing the men for their initial appearance and declined to comment.
Correia and Andrey Kukushkin, a Ukrainian-born U.S. citizen, were also charged in the case. A federal judge in San Francisco ordered Kukushkin held on Thursday pending a bail hearing to determine whether he is considered a flight risk.
Attorney General William Barr had been briefed on the investigation soon after he was confirmed in February, was updated in recent weeks and was made aware Wednesday night that the men were being arrested, a person familiar with the matter told The Associated Press. The person spoke on condition of anonymity to discuss an ongoing investigation.
The indictment says 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” and took steps to conceal it from third parties, including creditors. They created a limited liability corporation, Global Energy Producers, and “intentionally caused certain large contributions to be reported in the name of GEP instead of in their own names.”
Prosecutors charge that the two men falsely claimed the contributions came from GEP, which was described as a liquefied natural gas business. At that point, the company had no income or significant assets, the indictment said.
Prosecutors allege that Parnas and Fruman conspired to make illegal contributions to try to skirt the limit on federal campaign contributions. The men are also accused of making contributions to candidates for state and federal office, joint fundraising committees and independent expenditure committees in the names of other people.
The commitment to raise more than $20,000 for the congressman was made in May and June 2018. The lawmaker had also received about $3 million in independent expenditures from a super political action committee that Parnas and Fruman had been funding.
As a result of the donations, Parnas and Fruman had meetings with the congressman and Parnas lobbied him to advocate for removing the ambassador to Ukraine, Berman said.
Trump referred to Ambassador Marie Yovanovitch, who was indeed recalled to the U.S., as “bad news” in his July phone call with Ukrainian President Volodymyr Zelenskiy.
Sessions said in a statement tweeted by a spokesman that he “could not have had any knowledge of the scheme described in the indictment.” Sessions wasn’t asked to take any action during the meetings with Parnas and Fruman and wrote a letter to the secretary of state about Yovanovitch after colleagues in Congress said she was “disparaging” the president, he said.
The indictment also charges that Kukushkin conspired with the three other defendants to make political contributions, funded by a foreign national, to politicians seeking state and federal office “to gain influence with candidates as to policies that would benefit a future business venture.”
An unnamed foreigner wired $500,000 from a bank account overseas through New York to the defendants for contributions to two candidates for state office in Nevada, the indictment alleges. Foreigners are not permitted to contribute to U.S. elections.
The indictment accuses the four men of also participating in a scheme to acquire retail marijuana licenses through donations to local and federal politicians in New York, Nevada and other states.
America First Action said the $325,000 contribution will remain in a separate account while the court cases play out. A spokeswoman, Kelly Sadler, said the committee will “scrupulously comply with the law.”
The AP reported last week that Parnas and Fruman helped arrange a January meeting in New York between Ukraine’s former top prosecutor, Yuri Lutsenko, and Giuliani, as well as other meetings with top government officials.
House Democrats subpoenaed Parnas and Fruman on Thursday for documents they have refused to produce to three House committees. The panels have also subpoenaed Giuliani.
A whistleblower complaint by an unnamed intelligence official makes reference to “associates” of Giuliani in Ukraine who were attempting to make contact with Zelenskiy’s team, though it’s not clear that refers to Parnas and Fruman.
Neumeister reported from New York City. Associated Press writers Colleen Long and Brian Slodysko in Washington, Larry Neumeister and Jonathan Lemire in New York and Matthew Barakat in Alexandria, Virginia contributed to this report.
Many suspected that the arrests were in retaliation to the work that Giuliani has reported recently related to the Bidens crimes in the Ukraine. Now there are reports that the arrests may be connected to the Ukrainian oligarch connected to the Bidens and Burisma, who lost billions in US and IMF aid dollars.
The Biden (and now Kerry) scandal in the Ukraine is much more than about the money paid to Hunter Biden for being a Board member at the largest gas producer in the Ukraine, Burisma Holdings. The real scandal involves billions in funds from the IMF and US in aid that has gone missing.
Burisma (Ukraine’s largest oil and gas provider) has been the subject of many recent news articles because of its scandalous close-knit ties with President Obama’s Vice President Biden and Secretary of State Kerry. A controlling shareholder of Burisma is believed to be held by an entity called Privat Group:
The Privat Group, or PrivatBank Group (Ukrainian: Група “Приват”, Grupa “Privat”) is a global business group, based in Ukraine. Privat Group controls thousands of companies of virtually every industry in Ukraine, the European Union, Georgia, Ghana, Russia, the United States and other countries. Steel, oil & gas, chemical and energy are sectors of the group’s prime influence and expertise. None of the group’s capital is publicly traded on any stock exchange.
Privat Group is controlled by Ukraine’s largest commercial bank, PrivatBank, whose owner was Igor Kolomoisky. PrivatBank was later nationalized by the Ukraine in December 2016, taking 100% control of the PrivatBank entity, a month after the 2016 US election:
Veteran Moscow reporter John Hemler makes a convincing case that the control shareholder of Burisma is Privta Group. https://t.co/auFGtHveqI
— ghost of daniel parker (@SeekerOTL) February 21, 2019
According to reports:
Ihor Valeriyovych Kolomoyskyi is a Ukrainian Jewish billionaire business oligarch and the former Governor of Dnipropetrovsk Oblast. Kolomoyskyi is rated as the second or third richest person in Ukraine since 2006. and 377th richest person in the world according to the Forbes magazine list of billionaires.” “The transliteration of Ihor Kolomoyskyi’s name into English has numerous variants including Igor, or Ihor for his first name, and Kolomoyskyi, Kolomoysky, Kolomoisky, Kolomoiskiy, or Kolomoyskiy for his surname.” “Kolomoyskyi is rated as the second or third richest person in Ukraine (after Rinat Akhmetov and/or Viktor Pinchuk) since 2006.” [source]
Before the Orange Revolution, Privat Group had been widely regarded as relatively uninvolved in politics, but loyal to the Leonid Kuchma regime. After the government change, the group’s owners, according to media, became close allies of Yulia Tymoshenko (although she publicly denies this). Analysts agree that some of Tymoshenko’s decisions as the Prime Minister of Ukraine supported Privat side in conflicts. Some sources state that Privat Group provided significant financial support for Viktor Yuschenko during his presidential campaign and subsequent Orange Revolution.” [source]
As noted in prior posts, Kolomoisky purchased a private military consisting of mainly military and police forces who were also employed by the Ukrainian Government. Kolomoisky is credited with stopping the forward progression of Russian separatists via the use of his private military.
The international financial agency had rushed the money to Ukraine in April, in response to what IMF managing director Christine Lagarde called a “major crisis.” She went on to hail the government’s “unprecedented resolve” in developing a “bold economic program to secure macroeconomic and financial stability.” Over the next five months the international agency poured the equivalent of $4.51 billion ($2.97 billion in “Special Drawing Rights”—the IMF’s own currency) into the National Bank of Ukraine— the country’s central bank. Much of this money was urgently needed to prop up the local commercial banks. In theory, the IMF appeared to require direct supervision of how the Ukrainian banks used the aid. In fact, it appears the banks got to select their own auditors.” [source]
Kolomoisky’s bank, PrivatBank, is later revealed to be a recipient of billions of dollars of IMF funds. Kolomoisky is believed to have looted those funds:
A mere 9 months later, PrivatBank had blown through $1.8 billion.
— ghost of daniel parker (@SeekerOTL) February 21, 2019
At one point in time, Kolomoisky had been placed on a US Government Visa ban list due to his questionable business practices; however, shortly after Archer Devon and Hunter Biden joined the board of Burisma, that ban was mysteriously lifted, and there has been no investigation into these missing funds.