2 men linked with Giuliani, Ukraine held

Suspects arrested at airport on conspiracy, other counts

A Facebook screen grab provided by the Campaign Legal Center shows (from left) Donald Trump Jr., Tommy Hicks Jr., Lev Parnas and Igor Fruman in a post from May 21, 2018. Parnas and Fruman, associates of Rudy Giuliani, were charged Thursday with federal campaign finance violations related to a $325,000 donation to a group supporting President Donald Trump’s reelection campaign.
A Facebook screen grab provided by the Campaign Legal Center shows (from left) Donald Trump Jr., Tommy Hicks Jr., Lev Parnas and Igor Fruman in a post from May 21, 2018. Parnas and Fruman, associates of Rudy Giuliani, were charged Thursday with federal campaign finance violations related to a $325,000 donation to a group supporting President Donald Trump’s reelection campaign.

WASHINGTON -- Two Florida businessmen tied to President Donald Trump's lawyer and the Ukraine impeachment investigation were charged Thursday with federal campaign finance violations.

The charges relate to a $325,000 donation to a group supporting Trump's re-election.

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 people 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 Thursday 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.

[Video not showing up above? Click here to watch » https://www.youtube.com/watch?v=9B7cE4Av-eY]

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 political action committee 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.

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.

David Correia, Parnas' business partner, and Andrew Kukushkin, a Ukrainian-born U.S. citizen, were also charged in the case.

INDICTMENT CLAIMS

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 said. 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 say the two men falsely claimed that the contributions came from Global Energy Producers, 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.

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 Associated Press 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.

Giuliani's efforts to open a Ukrainian corruption investigation were echoed by Trump in the July 25 call with Zelenskiy. That conversation is now at the heart of the impeachment inquiry.

TWO SUBPOENAED

Just hours after the indictment was unsealed, House impeachment investigators doubled down on their 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 Wednesday, make no mention of the federal indictment, which may complicate the men's ability or willingness to cooperate with the impeachment investigation.

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.

House investigators Thursday also demanded documents from Rick Perry, the energy secretary.

The subpoena to Perry instructed him to turn over by next Friday any records that would shed light on the role he appears to have played in Trump's attempts to pressure the Ukrainian government to open corruption investigations into the Bidens. Investigators also want answers on whether Perry tried to influence the management of Ukraine's state-owned gas company.

Meanwhile, congressional investigators expect that Yovanovitch will appear today as planned for a deposition in the House's ongoing impeachment inquiry, despite the White House's pledge not to cooperate with Democrats' efforts to investigate Trump, according to congressional officials involved with the process.

Yovanovitch and her lawyer are "on board," according to a senior congressional aide, who spoke on the condition of anonymity to discuss sensitive negotiations.

State Department officials would not address questions about the matter and efforts to contact Yovanovitch on Wednesday were unsuccessful.

White House lawyer Pat Cipollone issued a letter to Democrats on Tuesday, outlining the Trump administration's objections to the impeachment inquiry, calling it unconstitutional and vowing to reject congressional requests to cooperate.

It is unclear whether the State Department will expressly forbid Yovanovitch from testifying, as it did with U.S. Ambassador to the European Union Gordon Sondland earlier this week.

Lawmakers are expected to ask Yovanovitch about her interactions with Giuliani, Trump and others pertaining to the investigations.

Information for this article was contributed by Michael Biesecker, Michael Balsamo, Desmond Butler, Eric Tucker, Colleen Long, Brian Slodysko, Larry Neumeister, Jonathan Lemire and Matthew Barakat of The Associated Press; by Karoun Demirjian and Carol Morello of The Washington Post; and by Eileen Sullivan, Adam Goldman, William K. Rashbaum and Nicholas Fandos of The New York Times.

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Lev Parnas, left, and Igor Fruman.

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Marie L. Yovanovitch

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FR66830 AP

Rick Perry

A Section on 10/11/2019

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