Giuliani, whose activities have faced scrutiny from the U.S. attorney’s office here, has said there was nothing improper about the money he received just before looking for information in Ukraine that may prove damaging to Trump’s political opponents — namely former vice president Joe Biden, now the Democratic nominee for president. Those efforts factored prominently in Trump’s impeachment proceedings several months ago.
In a statement, Parnas’s attorney Joseph Bondy said, “Today’s indictment remains a set of allegations only, and does not alter the presumption of innocence. . . . Mr. Parnas looks forward to vigorously defending against the allegations in court.”
Robert Costello, a lawyer for the former New York mayor, sought to distance his client from the new charge against Parnas.
“Rudy Giuliani is not involved in this,” Costello said. “ . . . If you can read English, you know that Rudy Giuliani is not mentioned at all in this indictment.”
Parnas and another man, David Correia, are accused of duping investors by using their company, Florida-based Fraud Guarantee, to cover personal expenses. The pair “made materially false representations concerning, among other things, how much money Parnas had contributed to the company and how much money the company had raised overall,” the new indictment asserts.
An attorney for Correia did not immediately respond to a request for comment.
The U.S. attorney’s office in Manhattan telegraphed several months ago that additional counts were expected in the case.
Prosecutors say there are at least seven victims who believed they were financing Fraud Guarantee, a company that claimed to be in the business of fighting corporate fraud.
“ ‘Fraud Guarantee’ takes on a different meaning in light of today’s allegations that the company was a vehicle for committing fraud, not insuring against it,” Acting U.S. Attorney Audrey Strauss said in a statement.
One of the seven people who, according to the indictment, invested in Fraud Guarantee after receiving false information gave a total of $500,000 in September and October 2018, money prosecutors said was sent to the account of a consulting firm that Parnas and Correia had retained on behalf of the company. The dollar figure and dates match money that, as The Washington Post has previously reported, was invested in the company by a New York lawyer and used to pay Giuliani for consulting services.
A significant amount of money was withdrawn from Fraud Guarantee since its inception in 2012, when Parnas and Correia began claiming the start-up would help protect other businesses from fraud, prosecutors said. Fraud Guarantee would allegedly offer insurance polices to other businesses to protect against fraud, although the operation Parnas and Correia purportedly launched “never became operational,” according to the new indictment.
The two told investors they were “not taking salaries and that all investor funds would be used for appropriate business expenses,” prosecutors said. Those statements were false, the U.S. attorney’s office alleges.
Between January 2013 and January 2014, three backers gave Fraud Guarantee about $750,000, most of which was not used for business purposes, prosecutors say. About $230,000 was withdrawn in cash and another $130,000 paid for Parnas’s personal rent costs, the indictment says, adding that Parnas and his wife spent “tens of thousands” on what investigators believe were personal expenses — including about $30,000 to a luxury car leasing company.
Parnas’s wife has not been accused of wrongdoing.
Parnas was initially charged in October 2019 along with Correia and two others: Igor Fruman and Andrey Kukushkin. Their arrests — and, in the case of Parnas and Fruman, their proximity to Trump — heightened suspicions about the president’s dealings with Ukraine.
Parnas has said he began working with Giuliani in Ukraine in late 2018, introducing him to current and former government officials who claimed to have information indicating it was Ukraine — not Russia — that interfered in the 2016 U.S. election, and about the Ukrainian energy company that employed Biden’s son Hunter while the vice president oversaw U.S. policy toward Ukraine.
Parnas made a $50,000 donation to Trump’s campaign and the Republican Party in 2016, and a pro-Trump super PAC reported receiving a $325,000 donation from a different company incorporated by Parnas and Fruman in 2018.
Rosalind S. Helderman in Washington contributed to this report.