Giuliani associates accused of funnelling money to pro-Trump group plead not guilty

Two Soviet-born Florida businessmen who helped President Donald Trump's lawyer Rudy Giuliani investigate political rival Joe Biden pleaded not guilty on Wednesday to illegally funnelling money to a pro-Trump election committee and other politicians.

NEW YORK (REUTERS) - Two foreign-born Florida businessmen who helped United States President Donald Trump's personal lawyer, Mr Rudy Giuliani, investigate political rival Joe Biden pleaded not guilty on Wednesday (Oct 23) to illegally funnelling money to a pro-Trump election committee and other politicians.

Ukraine-born Lev Parnas and Belarus-born Igor Fruman entered their not guilty pleas to federal campaign finance charges before US District Judge Paul Oetken in Manhattan.

Federal prosecutors have accused Parnas and Fruman of using a shell company to donate US$325,000 (S$443,000) to the pro-Trump committee, America First Action, and raising money for former US Representative Pete Sessions of Texas as part of an effort to have the Republican president remove the US ambassador to Ukraine.

The arrest of Parnas and Fruman at a Washington-area airport earlier this month, as they prepared to fly out of the US on one-way tickets, was yet another political hazard for Mr Trump amid a fast-moving impeachment inquiry by the Democratic-led US House of Representatives.

Both Parnas and Fruman are free on bail.

The two men have been charged with conspiracy, making false statements to the authorities and falsifying business records.

Mr Joseph Bondy, a lawyer for Parnas, told reporters outside the courthouse that he looked forward to proceeding based on the evidence, not "a smear campaign that's been driven by self-serving and misleading leaks apparently from the highest levels of our government".

Parnas himself also denied the charges against him.

"I will be vindicated," he said.

Prosecutors are examining Mr Giuliani's interactions with the two men, according to a source familiar with the matter. Assistant US Attorney Rebekah Donaleski, one of the prosecutors in the case, said at Wednesday's hearing that an investigation was continuing.

Mr Giuliani has said Parnas and Fruman helped his efforts in Ukraine to investigate Mr Biden and Mr Biden’s son Hunter. The younger Biden had served as a director of a Ukrainian energy company.

Mr Giuliani has denied wrongdoing.

Mr Edward McMahon, another one of Parnas' lawyers, said at Wednesday's court hearing he believed some documents obtained by prosecutors in the case could be protected by attorney-client privilege or executive privilege, because Mr Giuliani had been Parnas' attorney and is Mr Trump's personal attorney.

Ms Donaleski, one of the prosecutors, said there was already a legal team in place to deal with privilege issues.

Prosecutors said Parnas and Fruman funnelled money from an unnamed Russian businessman to political candidates in several states to help the businessman obtain permits needed for a proposed marijuana business, which never materialised. US law prohibits foreign donations to political campaigns.

Prosecutors say Parnas and Fruman committed to raise US$20,000 for Mr Sessions as part of an effort to get Mr Trump to remove US Ambassador to Ukraine Marie Yovanovitch.

That effort was carried out at the request of at least one Ukrainian official, prosecutors said.

Mr Trump ordered Ms Yovanovitch removed in May. She testified in the House impeachment inquiry on Oct 11.


A former Sessions staff member, Ms Caroline Boothe, is cooperating with the Manhattan prosecutors' investigation, her lawyer confirmed on Wednesday. Her cooperation was first reported by The Hill.

Mr Sessions previously confirmed that he too was cooperating with the investigation.

The impeachment inquiry is centred on Mr Trump's request in a July phone call for Ukrainian President Volodymyr Zelensky to investigate Mr Biden, a former vice-president and a top contender for the 2020 Democratic presidential nomination. The request came after Mr Trump withheld US$391 million in security aid to Ukraine, which he later released.

Democrats have accused Mr Trump of pressuring a vulnerable foreign ally to dig up dirt on a domestic political opponent for his own political benefit.

Mr Trump has denied wrongdoing and described the impeachment probe as a partisan smear.

Two other men charged in the marijuana business scheme, Andrey Kukushkin and David Correia, pleaded not guilty last Thursday.