Washington • Two associates of the president’s private lawyer Rudy Giuliani, who helped fund efforts to investigate one of President Donald Trump’s political rivals, were charged with violating campaign finance laws in a new criminal case that touched on their work in Ukraine and alleged financial ties to Russia.
The FBI arrested the two men, Lev Parnas and Igor Fruman, who are also important witnesses in the House’s impeachment inquiry, as they were trying to board a flight to Frankfurt, Germany, with one-way tickets on Wednesday night at Dulles International Airport in Virginia.
The four-count indictment came as Trump continued to defend his pressure campaign, in which Giuliani figured prominently, to get Ukraine’s government to open investigations that could benefit him politically. Their effort is already the subject of an impeachment inquiry, and the new indictments suggest the first criminal implications of the shadow foreign policy being pushed by Giuliani on behalf of the president.
“This investigation is about corrupt behavior — deliberate lawbreaking,” said William F. Sweeney Jr., the top agent in the FBI’s New York office.
The indictment connected Parnas and Fruman to an effort to remove the U.S. ambassador to Ukraine, Marie L. Yovanovitch, from her post. Yovanovitch was recalled last spring after coming under criticism from many allies of Trump. House Democrats are looking into whether her removal was linked to Trump’s efforts to gain politically helpful information in Ukraine.
According to the indictment released on Thursday, Parnas and Fruman, who previously drew the attention of the Federal Election Commission for donating $325,000 to a pro-Trump super PAC last year, donated money to and pledged to raise additional funds in 2018 for a member of Congress who, while not named in the indictment, is identified in campaign finance filings as Rep. Pete Sessions, R-Texas.
Parnas then asked Sessions for his help in pressing the Trump administration to remove Yovanovitch.
The indictment said Parnas acted, “at least in part, at the request of one or more Ukrainian government officials.” The indictment named no Ukrainian officials, but Yovanovitch’s main critic in the Ukrainian government was Yuriy Lutsenko, then the nation’s prosecutor general.
“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,” Geoffrey S. Berman, the United States attorney for the Southern District of New York, said at a news conference announcing the charges.
“Protecting the integrity of our elections — and protecting our elections from unlawful foreign influence — are core functions of our campaign finance laws,” he said.
Parnas and Fruman illegally funneled money through a company they set up to mask themselves as its sources, then gave the money to the pro-Trump super PAC, America First Action, the indictment said.
Prosecutors said Parnas and Fruman, along with two other men indicted on Thursday, David Correia and Andrey Kukushkin, also funneled money with ties to Russia to state and federal candidates in exchange for potential influence, according to court papers. The men wanted to set up a recreational marijuana business in Nevada and other states and were seeking political help to get access to the necessary licenses.
Correia was still at large but expected to turn himself in, according to a law enforcement official.
Kukushkin appeared briefly in federal court in San Francisco, where the government argued that he is a flight risk who should not be granted bail, citing his connections to overseas wealth, his multiple properties in the San Francisco Bay Area and his refusal to turn over his Ukrainian passport. His lawyer, Alan Dressler, did not immediately respond to a request for comment.
Just hours after the indictment was unsealed, House impeachment investigators doubled down on their own efforts to speak to Parnas and Fruman, issuing subpoenas compelling them to answer questions about their work with Giuliani in Ukraine.
The subpoenas, which instruct them to appear on Wednesday, makes no mention of the federal indictment, which may complicate their ability or willingness to cooperate with the impeachment investigation. Facing criminal charges for work that appears to have at least some connection to the subject of the impeachment inquiry, they may choose to assert Fifth Amendment rights.
Attorney General William P. Barr visited the U.S. Attorney’s Office in Manhattan on Thursday morning as part of a scheduled trip to see prosecutors in New York this week. He was briefed on the campaign finance case throughout the year and was notified of the charges and arrests ahead of time, a Justice Department official said.
Parnas and Fruman aided Giuliani’s efforts to gin up investigations in Ukraine into former Vice President Joe Biden and his son Hunter Biden, among other potentially politically beneficial investigations for Trump.
Trump spoke by phone to President Volodymyr Zelenskiy of Ukraine on July 25 and pressed for help from Ukraine in looking into the Bidens and the origins of the special counsel’s investigation into Russian interference in the 2016 election. House Democrats and an anonymous whistleblower have said this was an abuse of his office for personal gain.
The defendants named in the indictment on Thursday were charged with making illegal campaign contributions.
The indictment called one element of the case a “foreign national donor scheme” in which the defendants conspired to make political donations, funded by someone identified only as Foreign National-1 who had “Russian roots.”
The goal, according to the indictment, was to funnel money “to politicians and candidates for federal and state offices to gain influence with candidates as to policies that would benefit a future business venture.”
The arrangement involved an attempt to seek licenses to sell legal marijuana in Nevada, but the defendants missed the deadline to apply for the licenses — “2 months too late to the game unless we change the rules,” Kukushkin told the foreign national in late October 2018, according to the indictment.
Kukushkin noted that a state political candidate in Nevada, identified in the indictment as Candidate-1, would be in a position to change the rules, if elected. Days later, Fruman donated $10,000 to the candidate’s campaign, which campaign finance records identify as Wesley Karl Duncan, a Republican running at the time for the Nevada attorney general seat, which he lost to a Democrat.
Fruman also donated $10,000 on Nov. 1 to a second unnamed candidate, according to the indictment. Campaign records identified the candidate as Adam Laxalt, the former Nevada attorney general who was running for the governor’s seat and lost. Laxalt has been the subject of recent talk about running in a primary against Rep. Mark Amodei, one of a growing number of Republicans who supports the House impeachment inquiry into Trump. Amodei has not said that Trump should be impeached, but that Congress should “follow the facts.”
Parnas and Fruman also pledged to raise funds for then-Rep. Pete Sessions, R-Texas, identified as “Congressman-1” in the indictment, according to a person familiar with the matter. The men asked Sessions, who was chairman of the powerful House Rules committee, for his help in removing Yovanovitch, according to the indictment.
Impeachment investigators are also intensely interested in her removal. Sessions lost his reelection bid in 2018.
The indictment said Parnas and Kukushkin, who was arrested in San Francisco, are Ukrainian-born Americans, while Fruman was born in Belarus and became an American citizen. Correia is American-born.
Parnas and Kukushkin were expected to appear in court in Northern Virginia on Thursday, according to a spokesman in the U.S. attorney’s office in Manhattan.
Parnas and Fruman have acted as emissaries in Ukraine for Giuliani as he has sought to uncover information about, and encourage investigations into, Trump’s rivals, including Biden.
Parnas, who has known Giuliani for years, worked with Fruman to connect Giuliani to Ukrainian prosecutors who provided information to Giuliani, as The Times revealed in May.
House Democrats are interested in whether Trump and Giuliani viewed the former ambassador to Ukraine as an impediment to attempts to pressure Ukraine to undertake the investigations they desired. Yovanovitch is scheduled to appear on Capitol Hill on Friday as well, but she remains an employee of the State Department, which could try to stop her testimony. House Democrats are prepared to issue a subpoena if it does.
Parnas and Fruman are based in South Florida, and are executives of an energy company that donated $325,000 to a pro-Trump super PAC last year, prompting a Federal Election Commission complaint by a nonpartisan campaign finance watchdog accusing the men and the company of violating campaign finance laws. According to the indictment, not long before the large donation,Parnas and Fruman created a limited liability company called Global Energy Products, which they used to funnel large contributions.
Last month, Giuliani sought to minimize the significance of the campaign finance inquiry into the two men and said it was resolved. And on Thursday, he questioned the timing of the indictment. “All I can tell you about this arrest is, it comes at a very suspicious time,” he said.
Parnas’ and Fruman’s lawyer, John M. Dowd, who previously represented Trump in the special counsel’s inquiry, did not immediately respond to a request for comment.
The Wall Street Journal first reported the charges.