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Fraud Guarantee Co-Founder with Giuliani Ties Was Sentenced to Prison Time


Giuliani associate David Correia arrives at Federal Court in Manhattan on October 17, 2019.

David Correia, a man tied to Rudy Giuliani via the company Fraud Guarantee, was sentenced to one year and one day in federal prison on Monday.

Correia pleaded guilty last October to defrauding investors in the failed startup whose name was an ironic harbinger of its eventual denouement. While promising fraud protection and “risk management tools” to institutional investors, the company was never actually functional. Prosecutors alleged that Correia and Lev Parnas used over $2 million in capital raised as their personal line of credit.

“I feel true remorse for my previous actions,” Correia said before the U.S. District Court for the Southern District of New York (SDNY) on Monday morning. “These actions do not reflect what I want to be in life and I will never repeat them.”

The U.S. Attorney for the SDNY wanted a sentence of roughly three years but U.S. District Judge Paul Oetken noted that Correia didn’t make much of a profit and said that there were valid concerns about his health while in prison.

A father of two, the defense team sought to cast Correia as a family man who made a few bad decisions and tried to downplay his culpability by noting that most of the stolen funds actually went to one of his business partners.

The Giuliani connection was quickly noted after Correia’s sentencing was announced.

“One step closer to you Rudy,” noted whistleblower attorney Mark Zaid via Twitter. “One step closer.”

Giuliani, however, has not been implicated in the Fraud Guarantee debacle.

Recall: Correia was formerly the business partner of Parnas, a figure who rose to prominence during then-president Donald Trump’s first impeachment scandal, due, in part to the eventually awkward name of the business they co-founded.

While the business never flourished, and allegedly never functioned, the initial naming gambit did pay off. According to the Wall Street Journal, Parnas used the name so that he could wash away previous allegations that he had fraudulently obtained a business loan.

From that Oct. 2019 report:

Parnas and Correia set up Fraud Guarantee in a Boca Raton office park. Mr. Parnas picked the name in part to clean up his Google search results, ensuring that the word “fraud” and his own name would be paired in a positive light, said people familiar with the matter.

Some associates questioned the name, but it worked: Negative search results about the bridge loan and Edgetech soon dropped in Google’s rankings, one of the people said.

Apparently high on its search engine optimization efforts, the company would go on to pay Trump’s lawyer some $500,000 for advice. Somewhere along that lucrative road, Giuliani and Parnas decided they would work together to dig up dirt on then-candidate Joe Biden and his family, particularly his son Hunter Biden, in Eastern Europe. The expedition came back empty-handed but elements of that search played a substantial role in Trump’s first impeachment by the U.S. House of Representatives.

Correia also admittedly lied to the Federal Election Commission (FEC) about the source of a donation to Trump’s re-election bid.

That donation has a dizzying provenance that reads like a nesting doll of lucre and lies.

Correia originally told the FEC that the $350,000 boost to Trump’s ill-fated electoral fortunes was a legitimate spend made by a natural gas importation company—but the donation wasn’t made entirely by Correia himself. Prosecutors alleged that the company, like Fraud Guarantee, was also never functional and merely functioned as a way to illicitly route funds. The complicated donation to pro-Trump Super PAC America First Action was essentially a straw donation made via the fake company on behalf of Parnas and his more political second partner (and co-defendant) Igor Fruman, the latter of whom allegedly obtained the cash by securing a mortgage loan under fraudulent pretenses, according to the SDNY.

Correia was ordered to forfeit his $43,650 profit and to and pay $2.32 million in restitution.

The SEC filed civil fraud charges against Correia and Parnas late last week.

[mage via DON EMMERT/AFP via Getty Images]

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