Rudy Giuliani associates Lev Parnas and Igor Fruman "likely" to face new charges

The two associates of Trump's personal lawyer are accused of illegally funneling foreign funds into U.S. elections

Published December 3, 2019 11:10AM (EST)

Lev Parnas departs federal court with his wife Svetlana Parnas on December 2, 2019 in New York City. Lev Parnas, an associate of President Trump's personal lawyer Rudy Giuliani, was arrested in October on charges of illegally funneling money to a pro-Trump election committee and other politicians. (Stephanie Keith/Getty Images)
Lev Parnas departs federal court with his wife Svetlana Parnas on December 2, 2019 in New York City. Lev Parnas, an associate of President Trump's personal lawyer Rudy Giuliani, was arrested in October on charges of illegally funneling money to a pro-Trump election committee and other politicians. (Stephanie Keith/Getty Images)

The Justice Department is "likely" to file additional charges in the case against Lev Parnas and Igor Fruman, two associates of Rudy Giuliani accused of illegally funneling foreign money to U.S. political candidates, a prosecutor said Monday.

Federal prosecutors at the U.S. Attorney's Office for the Southern District of New York had already indicted Parnas and Fruman on campaign finance charges, accusing them of conspiracy and making false statements to the Federal Election Commission. Both men have pleaded not guilty to the charges.

A new indictment — which could include additional charges or additional defendants — is likely in the works, Assistant U.S. Attorney Douglas Zolkind said at a hearing in federal court in Manhattan, as investigators continue to scrutinize a "voluminous" amount of potential evidence in the case — around nine gigabytes worth, per NPR.

"The government's investigation is ongoing, and we think a superseding indictment is likely," he said. "No decision has been made."

Parnas and Fruman were arrested in October and charged with illegally funneling hundreds of thousands of dollars into the U.S. political system, including to Trump-aligned super PAC America First and its affiliated nonprofit, America First Policies, in May 2018. The following month, the men attended a dinner organized by the organization at Trump International Hotel in Washington. President Donald Trump and his son, Donald Trump Jr., were reportedly at the event.

Prosecutors alleged in the indictment last month that Parnas and Fruman falsely reported the true source of a $325,000 donation to America First Action by listing it as a gift from an energy company they had founded. The super PAC reportedly placed the contribution into a segregated bank account.

The charges stem in part from an effort the two men worked on with Giuliani, the president's personal lawyer, to spread damaging information about the U.S. ambassador to Ukraine. The ambassador, Marie Yovanovitch, was ultimately ousted from her post — Trump alleged that she was disloyal.

Prosecutors have said that Parnas and Fruman sought the help of a congressman in ousting Yovanovitch by committing to raise $20,000 for the lawmaker. The effort stemmed, "at least in part," from a request made on behalf of "one or more" officials in Ukraine, according to the indictment.

Finance records have identified former Republican Rep. Pete Sessions of Texas as the recipient of the funds. Sessions, who had been subpoenaed in October by federal prosecutors in New York, has denied wrongdoing and expressed willingness to cooperate with the probe. Giuliani appeared to be the "primary focus" of the subpoena, The Wall Street Journal reported at the time.

Prosecutors have also alleged that Parnas and Fruman engaged in a scheme to funnel foreign contributions from a Russian businessman to promote a planned recreational marijuana business.

The case suggests a sweeping investigation is being conducted into numerous people in Giuliani's orbit.

Giuliani and Trump have been accused of pressuring Ukraine to investigate former Vice President Joe Biden, one of the frontrunners for the Democratic presidential nomination, and his son, Hunter Biden. Giuliani and Trump have alleged it was corrupt for Hunter Biden to serve on the board of Burisma Holdings, a Ukrainian energy company, while his father, as vice president, was leading the Obama administration's anti-corruption effort in the country.

Both Bidens have denied wrongdoing. Hunter Biden has said he used "poor judgment" when he decided to join the board, though he denied he did acted improperly.

Those claims are at the heart of the impeachment inquiry into the president. House Democrats are investigating allegations that Trump pushed Ukrainian President Volodymyr Zelensky in a July 25 phone call to investigate the Biden family, as well as a baseless conspiracy theory about Ukrainian meddling in the 2016 election.

Giuliani has emerged as a key figure in the impeachment inquiry over allegations that he pursued a shadow foreign policy operation intended to pressure Ukraine to commit publicly to the investigations.

Parnas and Fruman helped introduce Giuliani to several current and former Ukrainian officials involved in bolstering unsubstantiated allegations about the Bidens and Yovanovitch.

Since being indicted, Parnas, a Ukrainian-born businessman, has signaled that he is willing to cooperate in the impeachment inquiry. He reportedly has photo, video and audio recordings that are relevant to House impeachment investigators. Judge J. Paul Oetken reportedly said at Monday's hearing that he plans to allow Parnas to turn over evidence to Congress in response to a subpoena from the House Intelligence Committee.

Law enforcement officials seized 14 phones and devices from Parnas, six of which were in his possession at the time of his arrest on Oct. 9 at Dulles International Airport outside Washington as he prepared to board a flight to Vienna with Fruman. The two men were carrying one-way tickets. Parnas, at the time, was traveling with two iPhones, a Samsung device, an iPad and another cellphone. Eight additional devices were confiscated from his Florida home.

The judge said it would be in the "public interest" to allow the material to be turned over to Congress, which requires his approval under an order imposed in the criminal case, Politico reported.

"I certainly expect to grant that request," he said. Prosecutors also said they would not object.

Parnas, who is under house arrest in Florida, appeared in court in Manhattan for Monday’s hearing. Fruman was reportedly granted permission not to appear.

The next court date was set for Feb. 3. A trial date has not been set.

By Shira Tarlo

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