Florida Businessmen Who Helped Giuliani in Ukraine Arrested on Campaign Finance Violations

Two Soviet-born business partners from Florida, who made hundreds of thousands of dollars in political donations to Republican campaign committees and helped Rudy Giuliani meet a key Ukrainian prosecutor, were arrested Wednesday on charges tied to campaign finance violations.

Igor Fruman and Lev Parnas were arrested on a four-count indictment that includes charges of conspiracy, making false statements to the Federal Election Commission and falsification of records.

Federal agents took the pair into custody just before they boarded a flight from Washington Dulles International Airport, a senior law enforcement official told NBC News. Their destination was not was known, but officials said the men had a one-way ticket to leave the U.S. Fruman and Parnas appeared in federal court Thursday in Washington, D.C.

The two men were central to Giuliani's efforts to get government officials in Ukraine to investigate business dealings by former Vice President Joe Biden and his son Hunter in the war-torn former Soviet republic.

Records show Parnas and Fruman used wire transfers from a company they controlled to make a $325,000 donation to the Trump-allied America First Action committee in 2018. But the wire transfer records that became public through a lawsuit show that the corporate entity reported as making the transaction was not the true source of the money.

According to the indictment, filed in the Southern District of New York, 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," according to the indictment.

Prosecutors charge that the two men falsely claimed the contributions came from a liquefied natural gas business. At that point, the company had no income or significant assets, according to the indictment.

The big PAC donation in May 2018 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 face-to-face meetings with Trump at the White House and Mar-a-Lago in Florida.

It is not yet clear when the two men first met Giuliani, Trump's personal attorney. But earlier this year, according to Ukrainian media reports, Parnas and Fruman were spotted in Kyiv, where they were frequent visitors to then-Prosecutor General Yuri Lutsenko, who sought to portray himself as an uncompromising fighter against corruption.

Multiple Ukrainian media outlets later named Parnas and Fruman as helping arrange a January meeting in New York between Lutsenko and Giuliani, as well as other meetings with key government officials.

Trump said Thursday he does not know the two men and that he hasn't spoken to Giuliani about them. He said: "We have nothing to do with it."

Giuliani's efforts to launch a Ukrainian corruption investigation into the Bidens were echoed by Trump in a July 25 call with Ukrainian President Volodymyr Zelensky. That conversation is now at the heart of a burgeoning congressional impeachment inquiry.

A whistleblower complaint by an unnamed intelligence official released last month makes reference to "associates" of Giuliani in Ukraine who were attempting to make contact with Zelensky's team, though it's not clear that refers to Parnas and Fruman. That could put the two men squarely in the middle of the investigation into Giuliani's activities.

The indictment also details a push by Parnas and Fruman to oust then-U.S. Ambassador to Ukraine Marie Yovanovitch and alleges the two sought help from a lawmaker identified in court documents as "Congressman-1" to have her removed. Trump recalled Yovanovitch from the post earlier this year. 

Several senior U.S. law enforcement officials told NBC News the congressman is former U.S. Rep. Pete Sessions, R-Texas. Sessions lost his re-election bid last year.

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.

In a May 2018 letter to Secretary of State Mike Pompeo, Sessions asked for the ambassador's removal, The Wall Street Journal reported last week. In an interview Sunday on NBC DFW's Lone Star Politics, Sessions defended the request he made in a "private letter" to Pompeo as "feedback."

"The ambassador was very much against the administration, did not represent them and spoke publicly against the administration," Sessions said.

According to the indictment, the request happened around the time Parnas and Fruman committed to raise $20,000 for "Congressman-1." And while the congressman isn't identified by name in court papers, donations made to "Congressman-1" in the indictment match campaign finance reports for Sessions.

Asked whether political donations from Parnas and Fruman were connected to the ambassador's removal, Sessions told Dallas Morning News' Gromer Jeffers his relationship with the pair was about "oil business."

Sessions said Thursday he could not confirm he was in fact the congressman in the indictment but that he would "vigorously defend myself against any allegations of wrongdoing," NBC News reported.

"As it relates to my role as a member of Congress and a candidate in 2018, the most important sentence in the indictment is this: 'The defendants concealed the scheme from the candidates, campaigns and federal regulators.'" Sessions said in a statement. "Therefore, if I am 'Congressman One,' I could not have had any knowledge of the scheme described in the indictment or have involvement or coordination of it."

He said he took no "official action" after meetings with Fruman and Parnas, and defended the letter to Pompeo as a separate matter.

"Separately, after several congressional colleagues reported to me that the current US Ambassador to Ukraine was disparaging President Trump to others as part of those official duties, I wrote a letter to the Secretary of State to refer this matter directly," Sessions said. "My entire motivation for sending the letter was that I believe that political appointees should not be disparaging the President, especially while serving overseas."

John Dowd, an attorney for Parnas and Fruman, hung up on an Associated Press reporter seeking comment. Giuliani said he couldn't comment on the case and that he didn't represent them in campaign finance matters.

Parnas, 47, came to U.S. from Russia as a young child, while Fruman, 53, made his way to Miami from Belarus following the fall of the Iron Curtain. Corporate filings and court records show several lawsuits involving the men, including detailed allegations of fraud against Parnas that led to a hefty civil judgment against him that remains unpaid.

Campaign finance watchdogs first raised concerns about the source of the $325,000 donation to America First Action, a political action committee supporting Trump's re-election, shortly after it was first disclosed last year.

The May 2018, donation, among the largest the committee received that quarter, was reported to have been made by Global Energy Producers LCC. Other campaign finance disclosures list Parnas as the CEO of the company and Fruman as president.

But there is little public evidence that Global Energy Producers was ever a thriving enterprise that could generate the income to account for its outsized political giving. The company has no listed office address or phone number, no announced deals or contracts, and a bare bones one-page website that features only a countdown clock that long ago ticked down to zeros.

Details of the source of the funds only emerged earlier this year as part of a long-running, unrelated lawsuit involving the estate of a Navy veteran from New York who accused Parnas of defrauding him out of nearly half a million dollars in loans and investments in a Hollywood movie project that turned out to be a mirage.

Those records and deed filings in Florida reviewed by The Associated Press show the money for the $325,000 donation to the Trump PAC on May 17, 2018, came from the same corporate entity that two days earlier received the proceeds from a $3 million private mortgage. That loan was secured by a luxury high-rise condo unit in North Miami Beach owned by a separate corporation tied to Fruman.

More than half of the proceeds from the $3 million loan appear to have been used to pay off a prior bank mortgage on Fruman's condo, with the remaining $1.2 million wired from a Miami lawyer's trust account to a corporate entity controlled by Parnas called Aaron Investments I.

Wire transfer records show $325,000 was then wired from Aaron Investments I to America First Action, the Trump PAC.

Four days after that donation, Parnas posted a photo of himself and Fruman at an intimate "Power Breakfast!!!" with Donald Trump Jr. at the Beverly Hills Polo Lounge.

The Campaign Legal Center, a non-partisan campaign finance watchdog based in Washington, filed a complaint with the Federal Elections Commission in July 2018, alleging that Global Energy Producers was essentially a shell company used to make political donations, the funds for which originated from unknown sources. The center last summer amended its complaint to include the wire transfers showing the movement of the funds from Aaron Investments I to the Trump-allied PAC.

Under federal elections law, political donations must be attributed to the person or entity actually providing the money as a way to avoid "straw donations." That the source of the donation was not the same corporation as the one listed on the PAC's federal disclosure report, Global Energy Producers, is a potential violation of campaign finance law.

"As a result of this secrecy scheme, the public didn't know that Trump was backed by shady characters with questionable connections and a trail of failed ventures," said Brendan Fischer, an attorney who is the director for federal reform at the Campaign Legal Center.

Kelly Sadler, the communications director for America First Action, said the committee can't comment on ongoing legal matters but added, "We take our legal obligations seriously."

A spokesman for the FEC, Myles Martin, said the agency could not comment on the status of any investigation involving the $325,000 donation.