Current News

/

ArcaMax

Giuliani associate Lev Parnas sees Trump-linked charges morph into cannabis case

Christian Berthelsen and Greg Farrell, Bloomberg News on

Published in News & Features

NEW YORK — When Lev Parnas and Igor Fruman were arrested in 2019 boarding a plane with one-way tickets to Europe, prosecutors claimed the pair had made donations to American politicians to advance the interests of Ukrainian officials.

At the time, Parnas and Fruman were working with Rudy Giuliani to dig up dirt in Ukraine on then-candidate Joe Biden to aid the reelection campaign of President Donald Trump, who faced impeachment proceedings over his dealings in Ukraine.

But as Parnas’ trial kicks off in New York, the government’s case has almost nothing to do with Ukraine and instead focuses on political contributions allegedly intended to help launch a cannabis business. Allegations that Parnas — once seen as a potential witness in Trump’s 2020 impeachment — worked on behalf of Ukraine and sought removal of the U.S. ambassador have been quietly dropped. And at a hearing last week, prosecutor Hagan Scotten said Trump and Giuliani would be little more than peripheral figures.

“One reasonable theory is that the facts at the time allowed for some sensationalism around the charges,” said Ryan Fayhee, a former Justice Department national security prosecutor who is now a partner at Hughes Hubbard & Reed in Washington. But it also isn’t unusual for prosecutors to “streamline an indictment” to “focus on areas that are likely to ensure a fairly clean narrative,” Fayhee said.

During Trump’s first impeachment proceeding, evidence emerged that Yuriy Lutsenko, Ukraine’s former chief prosecutor, asked Parnas to seek the removal of the U.S. ambassador, Marie Yovanovitch, and that Parnas did so. Parnas and Fruman had refused to testify before Congress.

Prosecutors have never publicly explained why they removed the Ukraine allegations, saying only in a court filing last year that they were streamlining “certain factual allegations” in the case. A spokesman for the U.S. attorney’s office declined to elaborate.

During the trial, the jury will be shown photos of Parnas and Fruman with Giuliani and Trump, though prosecutors said that will be intended as evidence that the men were trying to cultivate their image as influential businessmen with powerful connections.

Claims related to the pot business were always part of the case, but they are now taking center stage after prosecutors filed a new version of the charges in August.

Parnas and three others were accused of using funds from a Russian investor to make campaign donations to local politicians in several states. The men missed the deadline to apply for licenses and their pot venture never got off the ground. Foreign funds are prohibited in U.S. election campaigns.

Fruman and another defendant, David Correia, have already pleaded guilty.

Parnas and Andrey Kukushkin, a California businessman, are accused of a conspiracy to get $1 million from Russian investor Andrey Muraviev to use as political donations. Other charges involve laundering the true source of funds they used to donate $325,000 to a political action committee close to Trump, America First Action, and making false statements to the U.S. Federal Election Commission.

 

“They wanted those politicians to do favors for their business,” prosecutor Aline Flodr told the jury in her opening statement Wednesday. “These men shoveled thousands and thousands of dollars in foreign money to U.S. politicians, laughing about how they were breaking the law along the way” by “lying about where those contributions were coming from,” Flodr said.

Defense lawyer Joseph Bondy told the jury that Parnas’ interest in the cannabis business was legitimate and that he didn’t knowingly seek to violate federal election laws.

“There was no plan to take this money from a foreign national and violate American election laws,” Bondy said.

One of the Nevada politicians who received the Russian-funded donations and who will appear as a prosecution witness is Adam Laxalt, the former Nevada attorney general and gubernatorial candidate who is now running for U.S. Senate. Laxalt was a co-chair of Trump’s reelection campaign in Nevada, and fanned Trump’s claims of voter fraud in the state in an effort to get the results overturned.

Prosecutors have asked U.S. District Judge J. Paul Oetken to limit cross-examination of Laxalt on his political claims, which Parnas defense lawyer Joseph Bondy termed “untethered from reality.”

In addition to Laxalt, officials from the America First Action committee and Congressman Pete Sessions’ campaign are also expected to testify. Gerald Lefcourt, Kukushkin’s lawyer, told jurors that his client had launched successful marijuana businesses in California and was hoping Fruman and Parnas would invest to help it grow. Instead, they asked him and his Russian backer for $1 million for a joint venture, saying they had connections that could help expand the operations.

When they got the money, Parnas and Fruman used most of it on personal expenses, Lefcourt said. Prosecutors acknowledge that only about $100,000 was actually donated to politicians. “It was total lies in order to get more money,” the defense lawyer said. “There’s no conspiracy here. There’s no aiding foreign contributions.”

Prosecutors said it will take less than two weeks to present their evidence.

The case is U.S. vs. Parnas, 1:19-cr-00725, U.S. District Court, Southern District of New York (Foley Square).

©2021 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.