Rudy Giuliani's business dealings scrutinized by the US attorney's office he once led: reports

Prosecutors are probing his ties to Lev Parnas and Igor Fruman, who have been indicted on campaign finance charges

Published October 11, 2019 6:00PM (EDT)

Rudy Giuliani (AP Photo/Salon)
Rudy Giuliani (AP Photo/Salon)

Rudy Giuliani, the personal attorney of President Donald Trump, has come under the scrutiny of federal prosecutors who are investigating the business dealings of two men charged Thursday in a campaign finance scheme, multiple news outlets reported.

The FBI and prosecutors in the Southern District of New York — the same U.S. attorney's office Giuliani ran before he became the mayor of New York — are probing Giuliani's financial dealings with Lev Parnas and Igor Fruman.

Parnas and Fruman reportedly introduced Giuliani to several current and former Ukrainian officials who provided information which Giuliani alleges is damaging to former Vice President Joe Biden, a leading Democratic presidential candidate in national polls. They have emerged as central figures in the ongoing impeachment inquiry into Trump in the House of Representatives because of their ties to Giuliani.

Giuliani has sought to urge Ukraine to launch an investigation into allegations that Biden, while serving as vice president, sought to curtail an investigation into a Ukrainian gas company for which his son Hunter Biden served on the board. There has been no evidence of wrongdoing on the part of either Biden.

House Democrats have subpoenaed documents from Giuliani, Parnas and Fruman relating to their business dealings and communications with Ukraine.

The news that federal prosecutors are zeroing in on Giuliani comes after Parnas and Fruman were arrested late Wednesday on criminal charges stemming from their alleged efforts to funnel foreign money into U.S. elections and influence American politics on behalf of at least one unnamed Ukrainian politician.

Parnas and Fruman were charged with four counts, including conspiracy, falsification of records and lying to the Federal Election Commission about their political donations, which included a $325,000 donation through a limited liability company to America First Action, a pro-Trump super PAC, according to the indictment unsealed Thursday. The investigation remains ongoing.

Federal prosecutors in Manhattan alleged Parnas and Fruman schemed to raise and donate money for former Rep. Pete Sessions, R-Texas, whose assistance Parnas sought in "causing the U.S. government to remove or recall the then-U.S. Ambassador to Ukraine." The indictment alleges those efforts were conducted "at least in part, at the request of one or more Ukrainian government officials." (Sessions has denied wrongdoing and said he had been approached by Parnas and Fruman for a meeting about "the strategic need for Ukraine to become energy independent.)

In May, Trump moved to oust Marie Yovanovitch, then the U.S. Ambassador to Ukraine.

Parnas and Fruman, both Florida businessmen, are U.S. citizens born in former Soviet republics. They briefly appeared in federal court in Virginia on Thursday, a day after they were arrested at Dulles International Airport while awaiting an international flight with one-way tickets, The Wall Street Journal reported. Giuliani reportedly met with Parnas and Fruman for lunch at the Trump International Hotel in Washington on the day of their arrest, the newspaper reported.

Giuliani told the WSJ on Thursday that Parnas and Fruman were headed to Vienna, Austria, on Wednesday evening for reasons "related to their business." He claimed that he only had plans to meet with the two when they returned to Washington and that he wasn't representing them in this case. Notably, The Atlantic reported that Giuliani was planning to fly to Vienna Thursday night — roughly 24 hours after his business associates were bound for the Austrian city — but "do no business with them while all three were there."

In May, Giuliani reportedly identified Parnas and Fruman as his clients. While the two men assisted Giuliani in investigating Biden and his son, they reportedly solicited money from Ukrainians while boasting about their connections to the president, according to the WSJ.

Last month, Parnas told NPR that he had arranged a Skype call in late 2018 between Giuliani and former Ukrainian Prosecutor General Viktor Shokin to discuss the Biden corruption theory. He was reportedly also at meetings in late January in New York and mid-February in Warsaw with Giuliani and Yuriy Lutensko, another former prosecutor general for Ukraine.

In July, Parnas reportedly joined Giuliani to a breakfast meeting with Kurt Volker, then the U.S. special envoy for Ukraine. During that breakfast, Giuliani reportedly noted the investigations he was pursuing into Biden and a conspiracy theory regarding interference in the 2016 election.

In a letter to Congress send earlier this month, John Dowd, a former lawyer for Trump who now represents Fruman and Parnas, linked the men directly to the president, writing that they were assisting Giuliani "in connection with his representation of President Trump."

Asked by reporters Thursday about news that Parnas and Fruman had been indicted, Trump said, "I don't know these gentlemen. That is possible I have a picture with them because I have a picture with everybody . . . I don't know if there's anybody I don't have pictures with. I don't know them."

The president added he hadn't discussed them with Giuliani and said he hoped Giuliani wouldn't be indicted.

Trump's denial comes even though Parnas and Fruman reportedly dined with him at the White House in May 2018, shortly before they donated to America First Foundation, through the LLC Global Energy Producers, according to the indictment. (Parnas and Fruman attempted to conceal that donation to "evade the reporting requirements" in federal law, prosecutors alleged.)

Besides dining at the White House in May 2018, Parnas and Fruman reportedly met later that month with the president's son, Donald Trump Jr., at a fundraising breakfast in Beverly Hills, California.

Jay Sekulow, the president's lawyer, told the WSJ: "Neither the president nor the campaign nor political-action committees were aware of these transactions."

Parnas has known Giuliani "casually for years through Republican circles," The New York Times reported. The pair became closer after a company Parnas helped found, Fraud Guarantee, retained Giuliani's business and legal advice. The company reportedly paid Giuliani hundreds of thousands of dollars.

Fraud Guarantee is a "fraud prevention and mitigation company," according to the Times. In a classic Giuliani fashion, the Times writes, Giuliani "at first seemed to acknowledge having advised Fraud Guarantee in 2018, then backtracked."

"I can't acknowledge it's Fraud Guarantee, I don't think," Giuliani said. "I can acknowledge I gave them substantial business advice."

Giuliani said he did not regret working with Parnas and Fruman, despite their indictment: "I have to presume they're innocent. There are a lot of motives going on trying to smear people, so I wouldn't say that I regret it, no. Who else would I have turned to?"

Hours after Parnas and Fruman's indictment became public, three House committees leading the impeachment inquiry issued the businessmen subpoenas demanding they produce documents and testify to Congress. The committees had previously subpoenaed Giuliani for records related to his efforts in Ukraine.

Earlier this week, Dowd told the Miami Herald that his clients would not comply with a request for documents and depositions. Parnas told the newspaper late last month that he "got certain information" about Biden, "and I thought it was my duty to hand it over."

By Shira Tarlo

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