Two foreign-born businessmen with ties to President Donald Trump’s lawyer Rudy Giuliani were arrested on campaign finance charges, court documents show.
Lev Parnas and Igor Fruman, who gave money to a political action committee supporting Trump, “conspired to circumvent the federal laws against foreign influence by engaging in a scheme to funnel foreign money to candidates for federal and State office so that the defendants could buy potential influence with candidates, campaigns, and the candidates’ governments,” according to an indictment in U.S. District Court in Manhattan.
Parnas and Fruman, both born in the former Soviet Union and currently working in Florida’s real estate market, were reportedly at the center of a plan to install a friendlier management team at the helm of Ukrainian gas company Naftogaz.
Giuliani denied to the Associated Press that he had any business dealings in Ukraine. But Giuliani previously said that he had worked with the two men as part of his efforts in Ukraine to push an investigation of former Vice President Joe Biden and his son Hunter, NBC News reported.
The indictment also alleges Parnas and Fruman made illegal donations to a then-sitting U.S. congressman “in order to evade federal contribution limits” and that Parnas had asked that congressman for assistance in getting the U.S. to remove its ambassador to Ukraine. NBC reported, citing multiple senior law enforcement officials, that that congressman is former Texas Republican Rep. Pete Sessions.
A spokesman for Sessions did not immediately respond to CNBC’s request for comment.
Giuliani is named as a central figure in a whistleblower complaint that raised alarms about Trump’s July 25 call with Ukraine President Volodymyr Zelensky, in which the U.S. president himself asked Zelensky to “look into” the Bidens.
That call is at the center of an impeachment inquiry announced by House Democrats in late September. As part of that probe, House Democrats had asked for Parnas and Fruman to appear for depositions and provide documents. But their lawyer, John Dowd, who formerly represented Trump, told the Miami Herald this week that the two men would not comply with the Democrats’ requests.
Dowd did not immediately respond to CNBC’s request for comment on the arrests and indictment of his clients.
A source familiar with the situation confirmed the arrests of Fruman and Parnas to CNBC. They are expected to appear in federal court in Washington, D.C., at 2 p.m. ET on Thursday, NBC reported.
The indictment names two other defendants, as well.
A federal grand jury charges in the indictment that Parnas and Fruman made a $325,000 contribution in May 2018 to a political committee, named in the filing as “Committee-1,” in order to “obtain access to exclusive political events and gain influence with politicians.”
NBC reported that that contribution was made to a pro-Trump super PAC.
Parnas and Fruman falsely reported on Federal Election Commission forms that the donation came from a purported natural gas company they had incorporated around the time the money was sent, the indictment alleges.
Parnas and Fruman also allegedly sent a $15,000 contribution to a second committee and reported it using the same false source.
Pro-Trump super PAC America First confirmed the donation in a statement to NBC on Thursday, saying it “has not been used … for any purpose.”
The Campaign Legal Center said Thursday in a release by its president, Trevor Potter, that the organization had uncovered the donations and flagged them for the authorities last year.
“Trump’s push for Ukraine to investigate Biden was helped by two Soviet-born business partners who bought access with big political contributions illegally laundered through a shell corporation,” said Brendan Fischer, the CLC’s director of federal reform. “As the indictment states, these contributions were made for the purpose of gaining influence with politicians to advance their own personal financial interests and the political interests of Ukrainian government officials, including at least one Ukrainian government official with whom they were working.”
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