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 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.
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