U.S. Attorney for the Southern District of New York Geoffrey S. Berman announces an indictment on campaign-finance charges for four men, two of whom were former clients of Rudy Giuliani. Photo: David Handschuh/NYLJ

Two foreign-born men with ties to Rudy Giuliani, President Donald Trump's personal lawyer, have been indicted in Manhattan federal court on campaign-finance charges.

According to the 21-page indictment, Lev Parnas and Igor Fruman allegedly conspired to funnel foreign money to candidates for state and federal office in order to buy influence among lawmakers and governments in the United States.

The pair concealed their scheme from candidates, campaigns and federal regulators by laundering money through bank accounts in the names of limited liability corporations and through the use of straw donors, according to the indictment.

Parnas, a Ukrainian-born businessman, and Fruman, who was born in Belarus, were charged along two other men in the four-count indictment in the Southern District of New York. They were expected to appear in federal court in Northern Virginia on Thursday.

Parnas and Fruman were former clients of Giuliani, the former New York City mayor who has come under fire recently for his role in alleged efforts by Trump to have the Ukrainian government interfere in the 2020 U.S. election.

Giuliani was not charged with any wrongdoing. The indictment, which was first reported by the Wall Street Journal, did not mention Giuliani or say he had any involvement in the alleged crimes.

The men, both American citizens, were arrested around 6 p.m. Wednesday evening at Dulles International Airport, with one-way tickets to board an international flight, Geoffrey Berman, U.S. attorney for the Southern District, said at a press conference Thursday.

Parnas and Fruman had been scheduled for depositions this week in connection with the House impeachment inquiry of Trump, though neither were expected to cooperate. On Thursday, House investigators subpoenaed both men for information related to the inquiry.

"Your clients' failure or refusal to comply with the subpoenas, including at the direction or behest of the president or the White House, shall constitute evidence of obstruction of the House's impeachment inquiry and may be used as an adverse inference against your clients and anyone with whom they are acting in concert," they warned in a letter to John Dowd, a former Trump attorney who is representing Parnas and Fruman.

Dowd did not return a call Thursday seeking comment on the case.

According to the indictment, Parnas and Furman in May 2018 made a $325,000 contribution to "Committee-1" in the name of Global Energy Producers, a Delaware LLC that was purportedly involved in the liquefied natural gas business. The donation, to the pro-Trump super PAC America First Action, initially sparked the suspicion of the nonprofit Campaign Legal Center, which filed a formal complaint with the Federal Election Commission last July.

Prosecutors said GEP was formed just around the time of the contribution and had no income or significant assets. Instead, they alleged, the money came from private lending transactions between Fruman and third parties and never passed through a GEP account. A similar donation of $15,000 was made to another unidentified committee around the same time, the indictment said.

According to the complaint, the "straw donor" scheme was designed to avoid federal reporting requirements, while advancing the political interests of Ukrainian government officials.

For instance, Parnas and Fruman met in mid-2018 with a then-sitting U.S. congressman, who had received $3 million in independent expenditures for America First Action during the 2018 election cycle, to ask for help in ousting the U.S. ambassador to Ukraine, Marie Yovanovitch, from her post.

Those efforts, the indictment said, "were conducted, at least in part, at the request of one or more Ukrainian government officials."

"They sought political influence, not only to advance their own financial interests, but to advance the political interests of at least one foreign official, a Ukrainian government official who sought the dismissal of the U.S. ambassador to Ukraine," Berman said in a brief statement.

The Wall Street Journal reported that the former congressman, identified in the media as ex-U.S. Rep. Pete Sessions, R-Texas, wrote to Secretary of State Mike Pompeo last year asking for Yovanovitch's removal. Trump moved to oust Yovanovitch in the spring, after Giuliani and his allies told the president that she was disloyal and obstructing efforts to investigate former Vice President Joe Biden over the dealings of his son, Hunter Biden, in Ukraine.

William F. Sweeney, assistant director-in-charge of the New York office of the Federal Bureau of Investigation, said the investigation was aimed at protecting U.S. elections from foreign influence and exposing the true source of campaign contributions.

"These allegations are not about some technicality, a civil violation or an error on a form. This investigation is about corrupt behavior—deliberate lawbreaking," Sweeney said.

Two other men, David Correia and Andrey Kukushkin, were also charged in the indictment, as part of a separate scheme to make political donations that were secretly funded by a Russian businessman in order to win favor for a planned recreational marijuana business.

According to prosecutors, the plan involved meeting with candidates for state office in Nevada and donating between $1 million and $2 million to political committees in a "multi-state license strategy" to advance their business.

The indictment alleged that the defendants took steps to hide the backing of the business' foreign benefactor because of what Kukushkin called his "Russian roots and current paranoia about it." The plan, however, later faltered when the group missed the September 2018 deadline to apply for a recreational marijuana license in Nevada.

Kukushkin was arrested Wednesday in San Francisco, Sweeney said, and Correia remained at large Thursday afternoon.

Parnas and Fruman are charged with falsifying records and making false statements to the FEC. All four men are charged with conspiracy.

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