Federal prosecutors in New York City are considering a new raft of charges against close associates of President Donald Trump‘s alleged personal attorney Rudy Giuliani.
According to several anonymous sources said to be familiar with the matter who spoke with CNN, the new charges concern the appropriately ironically-named Florida-based company Fraud Guarantee LLC, which was previously run and founded by indicted Ukrainian-Floridian and all-around-hatchetman Lev Parnas.
Those sources claim that investigators with the Southern District of New York (SDNY) are weighing whether or not to charge Parnas and Fraud Guarantee co-founder David Correia with misleading investors.
The company was promoted as a fraud insurance company that aimed to “reduce and mitigate fraud,” according to its website–but never actually did any business whatsoever. The company appears to be little more than a comically-titled slush fund that was used to shift piles of cash into Giuliani’s hands.
“Messrs. Parnas and Correia set up Fraud Guarantee in a Boca Raton office park,” the Wall Street Journal notes. “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, people familiar with the matter said.” According to that October 2019 report:
Since its inception in 2013…Fraud Guarantee has attracted no identifiable customers, generated zero returns for investors and—according to Florida court records—defaulted on its office lease years ago after falling behind on rent.
The company did, however, manage to pay Giuliani Partners, the former New York City mayor’s consulting firm, some $500,000 for what Giuliani personally described as consulting and legal advice on regulatory matters.
“Giuliani told Reuters the money came in two payments made within weeks of each other,” an article from earlier that same month notes. “He said he could not recall the dates of the payments. He said most of the work he did for Fraud Guarantee was completed in 2018 but that he had been doing follow-up for over a year.”
“I know beyond any doubt the source of the money is not any questionable source,” Giuliani told the wire service–insisting that his massive payday was sourced from within the United States. “The money did not come from foreigners. I can rule that out one hundred percent.”
Since Parnas and his alleged partner-in-crime Igor Fruman were indicted and arrested in early October last year on myriad fraud and campaign finance-related charges, SDNY investigators have had their eyes on Giuliani–who formerly ran that same U.S. Attorney’s Office.
That action by the SDNY apparently came as a surprise to the stalwart White House ally, who famously spoke too soon about his work with Parnas and Fruman. Just two weeks before the men were charged and arrested, he said: “I referred them to a campaign finance expert who pretty much resolved it.”
The Reuters report offers some necessary monetary context sourced from that indictment:
[A]n unidentified Russian businessman arranged for two $500,000 wires to be sent from foreign bank accounts to a U.S. account controlled by Fruman in September and October 2018. The money was used, in part, by Fruman, Parnas and two other men charged in the indictment to gain influence with U.S. politicians and candidates.
Correia, who was also named in the original indictment–and charged with one count of conspiracy–was arrested nearly a week later at JFK International Airport in Queens.
And, according to Parnas and Correia, their interest in Giuliani didn’t really have much to do with legal wizardry or regulatory bona fides. Rather, they wanted his face and his name. As Law&Crime previously reported, the Fraud Guarantors wanted Giuliani to be the leading pitchman in an information that would air on cable news networks. That plan, of course, never quite took off.
Legal experts have long warned that Giuliani’s associations with Parnas, Fruman and Correia might well catch up with him.
“I think he should be very worried right now,” former federal prosecutor Mimi Rocah said late last year. “The SDNY has real leverage here with these men. And if they were involved–which it appears they were–in other criminal schemes with Giuliani, they are going to have a great incentive to talk to the SDNY about that.”
Now, prosecutors appear to be inching ever closer to the president’s so-called attorney–and have forced his own legal team to respond.
“The scrutiny of Fraud Guarantee brings the investigation closer to Giuliani, Trump’s vocal defender, and raises questions about what role the former mayor played, if any, in the marketing of the company,” CNN reports. “A lawyer for Giuliani said his client never had any conversations about investor pitches or marketing with Parnas or his business partner David Correia.”
Again that report:
In the case of Fraud Guarantee, investigators have focused on the marketing pitch, specifically examining whether the men duped investors about the value of the company and how they intended to use the proceeds, the people familiar with the investigation say.FBI agents and prosecutors interviewed investors who were pitched on the company, and through subpoenas have obtained text messages and other documents related to the effort. One person with knowledge of the company has said the men spent proceeds from investors on pricey personal expenses.
[image via YouTube screengrab]