Lev Parnas Had A Remarkable Start On His Path To Fraud Guarantee

Jim again here.

See update below.

Over the past few days, several sources of information about Lev Parnas’ history have come out. Perhaps the most complete picture of his early years came from this New Yorker interview shortly before his arrest:

Parnas was born in February, 1972, in the port city of Odessa, in southwestern Ukraine, which was then part of the Soviet Union. He was three when his family moved to the United States. “I came here as a legal immigrant, through a legal process,” he said. His family settled in Detroit, where they lived for about a year, before relocating to Brooklyn. When Parnas was sixteen, he worked at Kings Highway Realty, selling Trump Organization co-ops. “That was my first time knowing who Trump was, but, growing up in that area, you knew who Trump was, because his name was all over the place,” he said.

In 1995, when Parnas was twenty-three, he moved from Brooklyn to Florida.

I found the part about Kings Highway Realty and Trump co-ops especially useful, as I had been puzzled about one of the earlier passages from an interview with the Washington Post:

Parnas, 47, was born in Ukraine but moved with his family to the United States as a child and grew up in Brooklyn. He told The Washington Post in an interview conducted before his arrest that he got his start in real estate, selling Trump condos for Donald Trump’s father, Fred, then worked in shipping in the former Soviet Union before becoming a securities trader. He moved to Florida in the mid-1990s.

This passage had bothered me, because when we go back and look at Fred Trump’s career, condos play virtually no role. Fred built large, pedestrian apartment buildings, often with government assistance, in the outer boroughs that he retained ownership of and rented out to the middle class. Donald, as we know, concentrated early on opulent properties in Manhattan.

The one Fred Trump property that bears the Trump name is Trump Village:

The seven towers of Trump Village were designed by the architect Morris Lapidus. The two near Ocean Parkway were rental buildings and were run by the Trump Organization until recent years. The five other buildings were in the state’s Mitchell-Lama program, which allows people with incomes below certain thresholds to enter lotteries for the right to buy co-op apartments at below-market prices.

The snippet above was published in the New York Times in 2010. That begins to resolve some of the apparent discrepancies in the Parnas statements in the different interviews. If he was selling property for Fred Trump, co-ops in Trump Village make the most sense. And by this time, the Trump Organization was managing the properties as Fred’s health was starting to decline.

Remarkably, Kings Highway Realty Corp., which was incorporated in 1977, is still in business. The address listed for it now is around 8 miles from Trump Village. That seems to fit with a first job for a 16-year-old growing up in Brooklyn, although selling real estate at 16 seems pretty advanced.  Further, as we see in Fred Trump’s obituary, he had a history of taking in young men looking for a career in real estate.

By the time Parnas started selling co-ops at Trump Village, Fred Trump was 82. The obituary suggests that Alzheimers set in around 1993, five years after Parnas started, but there appears to have been a single driving force in Fred’s life in this era:

Fred Trump’s real estate empire was not just scores of apartment buildings. It was also a mountain of cash, tens of millions of dollars in profits building up inside his businesses, banking records show. In one six-year span, from 1988 through 1993, Fred Trump reported $109.7 million in total income, now equivalent to $210.7 million. It was not unusual for tens of millions in Treasury bills and certificates of deposit to flow through his personal bank accounts each month.

Fred Trump was relentless and creative in finding ways to channel this wealth to his children. He made Donald not just his salaried employee but also his property manager, landlord, banker and consultant. He gave him loan after loan, many never repaid. He provided money for his car, money for his employees, money to buy stocks, money for his first Manhattan offices and money to renovate those offices. He gave him three trust funds. He gave him shares in multiple partnerships. He gave him $10,000 Christmas checks. He gave him laundry revenue from his buildings.

Much of his giving was structured to sidestep gift and inheritance taxes using methods tax experts described to The Times as improper or possibly illegal. Although Fred Trump became wealthy with help from federal housing subsidies, he insisted that it was manifestly unfair for the government to tax his fortune as it passed to his children. When he was in his 80s and beginning to slide into dementia, evading gift and estate taxes became a family affair, with Donald Trump playing a crucial role, interviews and newly obtained documents show.

So at the very time that Parnas came onto the scene, Fred was already slipping into dementia but singularly focused on channeling as much money as he could to Donald while avoiding taxes on the transfers. Did Parnas see these schemes as they developed? Did he even perhaps play a bit role? Recall that in one of the interviews he says he worked for the Trump Organization. The ultimate vehicle for funneling cash to Fred’s offspring came into being in 1992, and likely postdated Parnas’ time with Trump Village, but we have to wonder if Parnas saw the seeds of this one being planted, or was even one of the employees used in the scheme. Continuing in the Times article above:

The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992. All County’s ostensible purpose was to be the purchasing agent for Fred Trump’s buildings, buying everything from boilers to cleaning supplies. It did no such thing, records and interviews show. Instead All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants.

Something Parnas almost certainly had to have seen just before going to work with the Trump Organization was the story of David Bogatin, one of the first Russian purchasers of a Donald Trump property:

But Bogatin wasn’t deterred by the limited availability or the sky-high prices. The Russian plunked down $6 million to buy not one or two, but five luxury condos. The big check apparently caught the attention of the owner. According to Wayne Barrett, who investigated the deal for the Village Voice, Trump personally attended the closing, along with Bogatin.


In 1987, just three years after he attended the closing with Trump, Bogatin pleaded guilty to taking part in a massive gasoline-bootlegging scheme with Russian mobsters. After he fled the country, the government seized his five condos at Trump Tower, saying that he had purchased them to “launder money, to shelter and hide assets.” A Senate investigation into organized crime later revealed that Bogatin was a leading figure in the Russian mob in New York. His family ties, in fact, led straight to the top: His brother ran a $150 million stock scam with none other than Semion Mogilevich, whom the FBI considers the “boss of bosses” of the Russian mafia. At the time, Mogilevich—feared even by his fellow gangsters as “the most powerful mobster in the world”—was expanding his multibillion-dollar international criminal syndicate into America.

How could that not have made an impression on Parnas, going to work just months after the Bogatin story exploded?

This leads us to a murky intermediary period in Parnas’ story.  Note that the Post interview, but not the New Yorker interview, mentions that he “worked in shipping in the former Soviet Union”. Also, this biography he eventually put on the Fraud Guarantee website mentions something similar:

Notably, in this version Parnas says he shipped “the first containers of freight between the United States and the former Soviet Union”. The Gorbachev government failed in December of 1991, when Parnas would have been 19, going on 20 the next February. And yet, somehow, this teenager, who had a couple of years selling real estate, suddenly jumps into the middle of a brand new opportunity on the world scene. Even more confusing is the fact that the former Soviet Union in those early years had a horrible economy:

The first seven years of Russia’s transition from the Soviet central planned economy (1991-1998) were not easy. This [period, which coincided with most of the regime of President Boris Yeltsin were, by most accounts, a time of economic chaos, if not near collapse and failure.

During the period, Russia lost close to 30% of its real gross domestic product (GDP), a decline reminiscent of the Great Depression of the 1930s in the United States.4 Russia also suffered very high rates of inflation– over 2,000% in 1992 and over 800% in 1993– before it declined to more tolerable, but still high, levels of around 20% by the end of the 1990s. The inflation robbed Russian citizens of their savings as the value of the ruble collapsed, eventually forcing the Russian government to sharply devalue the ruble on January 1, 1998, with 1 new ruble equaling 1,000 old rubles. As a hedge against inflation, some residents, who were in a position to do so, invested in hard assets such as art works, foreign currencies, and real estate.

So what would a teenager ship? Oh, I don’t know, maybe he figured something out at a time when the rich in the former Soviet Union were looking for hard assets.

The next phase in Parnas’ career becomes really fascinating. Note that all of these narratives say he moved from shipping (or directly from real estate) to securities. Again, he seems to have had remarkable luck in jumping into a senior position at an incredibly early age. I’ve been digging into the network of Parnas’ various corporate entities (and hope to write about them soon) and the earliest entry under his name in the Florida database is for Program Trading Corp., which was incorporated on September 25, 1992 in Boca Raton. That would have made Parnas just 20 years old when he suddenly became, at least on paper, a director and President (a partner I’ll address in later posts was CEO) of a stock trading firm. The timeline here seems a bit out of order. Parnas claims not to have moved to Florida until 1995, and yet his first company there was incorporated, with him involved, in 1992. Further, when we look into Parnas’ registration as a stock broker, we see that he is listed as passing the licensing exam on December 10, 1993 and he’s first registered with a brokerage firm a few days before that on December 6. This is over a year after Program Trading Corp. was founded.

I confess to not being familiar with the detailed workings of licensing and registration of stock brokers, but the rapid succession of firms at which Parnas was registered strikes me as strange and perhaps suggestive that his early days as a broker didn’t go well. From the early firms, it appears at least possible that Parnas was indeed still in New York as he passed the first exam and sold his first securities, but it still stands out as strange that his firm in Florida was already incorporated and waiting for him when he moved there in 1995.

It’s almost as if Lev Parnas was a “made man” at 23 with experience in real estate, shipping and securities, all enterprises known to be favored by those laundering cash coming out of the former Soviet Union.

Update October 17

It appears that Parnas didn’t actually become involved in Program Trading Corp. until late 1998. I’ve put strikethrough on the parts of this post that relied on a mistaken interpretation of the forms on file with the State of Florida. See the new post for an updated timeline of Parnas and Program Trading Corp. So Parnas may not have been “made man” until 1998 instead of 1995.

48 replies
  1. SaltinWound says:

    I don’t believe he was selling real estate at 16. He wasn’t old enough to get a license. He was making deals under the table? Lying about his age? Isn’t it much more likely he’s spinning his life story?

    • Mel says:

      I doubt that he could have been legally selling coops at Trump Village. It was a regulated Mitchel Lama coop. In order to qualify you had to meet certain income restrictions. I seem to recall lotteries just to get on the waiting list. If he was selling apartments it most likely would not have been legal.

      • posaune says:

        What would be interesting (and a nightmare to document) would be if all those rent-regulated tenants in Trump Village litigated the rent over-charges based on All-County Bldg Supply’s new refrigerators/stoves, etc. that were tripled in priced for the purpose of rental unit registration in Albany. Simply tracking one unit’s rental history, the landlords “improvements,” and the tenant history is formidable. For all the units? That could be a BIG chunk of money. Then there’s the question of tracking the descendants if it pays out.

  2. harpie says:

    Lev’s pal David Correia in custody at JFK:

    7:59 AM – 16 Oct 2019

    JUST IN: David Correia, 1 of the 4 people indicted in an alleged scheme to funnel foreign money and violate FEC laws was taken into custody at New York’s JFK airport this morning; the case includes Giuliani associates Lev Parnas and Igor Fruman – @Tom_Winter

  3. Johnathan Mathews says:

    I knew I had seen the name Mogilevich before linked to Firtash.

    2014 FP article entitled Married to the Ukrainian Mob.

    He [Firtash] was forced into dealing with organized crime members including Mogilevich if he would never have been able to build a business.

    Following Ukraine’s independence in 1991, Firtash started a business in Chernivtsi, western Ukraine which delivered canned goods and dry milk to Uzbekistan. (Shipping?)

    His first company KMIL. is said to have incurred heave losses toward the end of the 1990s.

    KMIL then involved itself in more profitable food for gas barter schemes with turkmenistan, benefiting from Ukraine’s inability to buy foreign gas imports with its diminished foreign exchange reserves.
    (A US based securities company would have been useful).

    (Has Parnas worked for Firtash since 1991?)

  4. Johnathan Mathews says:

    Also, I think I also figured out who “she is” from the prior article on the investigation of Manafort and it’s directly related.

    Read Reuters article from 2015 entitled ex-Ukraine PM Tymoshenko’s U.S. racketeering lawsuit dismissed.

    Us district judge kimba wood said Tymoshenko failed to show that the industrialist Dmytro Firtash and other defendants (anyone know who?) laundered money in the United States to help pay Ukraine prosecutors (Shokin?) and supporters of Yanukovych.

    She could be Yulia Tymoshenko.

    If manaforts plan was to put Yanukovitch in Eastern Ukrain, it would make sense to have Tymoshenko rise to power in Western Ukraine.

    Tymoshenko and two other plaintiffs claimed that Firtash, who owns Ukrainian energy company RosYkrEnergo and his accomplishes skimmed millions of dollars from natural gas contracts and laundered then through bogus manhattan real estate transactions.

    (What transactions? If Parnas was still working for Firtash this whole time he was probably involved. Can these Manhattan real estate transactions be tied to trump? Someone that is good as digging in these records, which I am not, might be able to find out.

    • NickinNJ says:

      ProPublica has some good investigative journalists that love good tips to chase down. Might be worth dropping a dime and sending them a tip ;)

  5. Johnathan Mathews says:

    Actually, You may be on to something. Didn’t Wexler basically give Epstein half of his $77m mansion in 1996 and then the other half in 2011 and no one could ever explain why?

  6. Sandwichman says:

    Would not be at all surprised if Jeffrey Epstein were resurrected for a cameo in the Rudy, Lev & Igor escapades.

    • rip says:

      Resurrected as in “risen from the dead”? The corpse that was supposed to be Epstein was some poor slob who the DOJ/NYPD said would be a good match?

      Who was that Enron guy who also seemingly met his demise and is also basking in southern climes (with underage slaves)?

  7. Johnathan Mathews says:

    Did a little digging. The money was laundered through manafort and they were planning to buy the drake hotel. According to the lawsuit and notes form Bruce Ohr release in july from the doj.

  8. earlofhuntingdon says:

    Parnas at sixteen, “selling” properties for Fred Trump, is a misdescription, and possibly resume padding. Parnas had no legal capacity at that age. He could not sign a sales contract, for example, but he could do the legwork.

    It speaks to Fred being a Scrooge, more than it does to his mentoring young men who wanted to learn the business. Who is Fred not giving a job to in order to pay pennies to green, if street smart, young Parnas?

    It also says something about the people Fred sought out as buyers. What adult would buy real property from a teenager, or trust the company that used them as front men? People who had won a lottery to buy a rare co-op at a subsidized price in NYC were already sold, they just needed a warm body to process the paperwork. So did Fred. Cheaper by the dozen.

    • Raven Eye says:

      Yep. There’s a lot of just plain drudge work and paper shuffling in real estate. Get some kids at minimum wage, puff up their ego a little, maybe let them have some level of contact with clients whilst running paper, keep the calendar up to date, work their collective asses off, and save money. I can easily see opportunity for resume inflation.

  9. Jim White says:

    Just a friendly reminder that this case has lots of people involved and lots of facts established. Please keep your speculation to stuff that has some basis in evidence that you cite and is relevant. Several of the comments above are balanced on the precipice of being deleted.

  10. Johnathan Mathews says:

    Another thought. I thought it was odd that the SDNY was pulling Cohen out of jail for more info on the hush money payments. What if that’s a red herring. What if they were asking Cohen about Parnas, Fruman, Firtash.

    After all, Lanny Davis is Cohen’s lawyer and was Firtash’s lawyer until September 2019.

    Lanny Davis has said that “there is much more Cohen knows that hasn’t been made public”.

    What if sdny is just waiting until trump is removed from office before rounding everyone up.

    What if Giuliani got wind of it and tipped off Parnas and Fruman. They tried to flee and it forced their arrest?

  11. Savage Librarian says:

    Felix Sater admits to knowing Parnas. Details about that would be interesting to know. I wonder how far back their relationship goes.

    “Indicted Giuliani associate attended private ‘16 election night party for ‘friend’ Trump: Lev Parnas’ relationship with the president might have begun years earlier than previously reported.”
    “Giuliani attended the same party, as did Felix Sater, a former executive at the Trump Organization who had a double life as a convicted criminal and a high-level cooperator for the CIA. Sater, who told POLITICO earlier this month that he knows Parnas, said Friday that he did not interact with him at the party.”


      • SomeGuyInMaine says:

        If this was all out there in plain view, one wonders what sort of files law enforcement may have on these guys.

        Somewhat shocking clients for Rudy. Oh also I’m pretty sure I read they hired Giuliani Partners, the consulting firm, not Giuliani the attorney at least for a bunch of work Fraud Guarantee work anyway. That’s kinda messy. The privilege fight will be interesting if it ever goes there.

        One other side note complicating things: Both Giuliani and Fruman are in the middle of less than amicable divorces.

        More to come out I’m sure, for lots of reasons.

  12. Savage Librarian says:

    I don’t know how useful the following article is. But one interesting thing it may bring to light is our bias. So far, it seems we might have a predisposition to assume Lev Parnas might be intellectually inferior or lacking in substantive experience. But the article below mentions his son, Aaron, who apparently is brilliant. Aaron began law school at GWU in 2017, when he was just 18 years old. So, maybe Lev is smarter than we think.

    “2014 photo shows earlier ties between Trump and indicted Giuliani associate” – 10/12/2019


    • earlofhuntingdon says:

      Intelligence and experience are not the same thing. Parnas at sixteen is not experienced, regardless of his intellect.

      Trump at seventy plus, for example, has considerable experience, but he is dumb as a post about most things. He doesn’t learn. Parnas, on the other hand, might be quite smart. So was Meyer Lansky. And Roy Cohn. He graduated from Columbia’s undergraduate and law schools at the same time. He was twenty.

      • P J Evans says:

        Parnas brings to mind Eugene Volokh, who really is that smart. (I met him when he was a teen-aged college student.)

        • bmaz says:

          Gene is a pretty darn decent chap. Good bit more of the libertarian bent than me, but always accessible and very nice, and he is truly that smart on all things First Amendment, and more. People don’t know all the voices people here talk to, but they are truly worthy.

  13. Johnathan Mathews says:

    Per Jack Bryan, director of active measures:

    Felix Sater is a childhood friend of Michael Cohen.

  14. midwest says:

    Just tripped over this site yesterday and I have no intriguing screen name.

    I’d found the Fraudguarantee site the day these guys were arrested, as I understood the idea was selling fraud insurance products. But did this company ever actually engage in such a business? It struck me as funny that the website claimed $600M cap but these guys are also dodging creditors (hiding the fact that they had access to money lest the “buzzards” start circling) and trying to score retail pot licenses. Besides the website having all the generic imagery. Although there appear to be some office spaces (large strip mall type) in and around the address.

    I appreciate the scuttlebutt from behind the paywall for various media sources (hey, I did increase my media subscription purchases by significant amounts after Nov 8 2016 but only so much I can do), I understand speculation but more interested in intriguing connections than imagining the possibilities thereof.

    Thank you all

  15. Drew says:

    On the shipping thing from the recently former Soviet Union. I worked in an academic library and one of my employees as a shelver (i.e. low level low compensation job) was a well educated young man in his mid-20s who came from a family that fled Russia (or Ukraine perhaps?) in the 1920s-very anti-communist Russian Orthodox family. This young man easily attained the minimum productivity for his job, but could often be found doing non job related things, esp. spending time on the telephone.

    So around 1992 he made a visit to Russia & a few months later he was chatting about stuff he and friends were doing, & his aspirations for going into business. One of the first things that he said they were already doing was exporting USED cars from the U.S. to Russia. They would put them in containers & send them. I kind of gathered that this dodged customs duties … I opted to let the details of this stay foggy. Eventually he got his business going, no longer needed the employee benefits that kept him at our institution & went on his way. I haven’t kept in touch with him–nice guy, a bit full of himself, American born–I have no actual reason to connect him with organized crime. On the other hand, this kind of somewhat shady (or who knows how shady?) dealing was quite common in the Russian/Soviet Union diaspora in those days.

    • P J Evans says:

      You’d think that after decades in the US they’d be a bit more assimilated. (One of my father’s professors, back in the late 30s, had come over from Russia in the 20s. Engineer, graduate of St Petersburg, literally wrote the book on diesel engines.)

      • Drew says:

        The ROCOR (Russian Orthodox Church Outside Russia) was a very tight, very ideological bunch. Identifying with the dispossessed aristocracy of Russia. So a bit of an enclave. [Distinct from two other Russian Orthodox related denominations in the U.S. Orthodox Church in American & Russian Orthodox (Moscow Patriarchate)]

    • Savage Librarian says:

      One day I was sitting at the reference desk when a gray haired man approached to ask for assistance. He appeared to be in his 50’s and was very animated and enthusiastic. I think it was in 1993. He was convinced that he was going to become rich in Russia and its satellite countries. I think he mentioned oil. I don’t remember specifically how I helped him. That was the first and last time I ever saw him. But, from time to time, I wonder what happened to him and what stories he might have to tell.

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