Judge Paul Oetken Eliminates Lev Parnas’ Last Attempt to Weaponize the Former President’s Former Lawyer in His Defense

Yesterday, Judge Paul Oetken ruled on all but one of the pre-trial motions in the Lev Parnas trial(s). The rulings have the effect of neutralizing any benefit that Parnas might have tried to get from his association with the former President’s former lawyer, Rudy Giuliani. But the order also appears against the background of the Special Master review in Rudy’s own case in interesting ways, and in ways that might change Parnas’ incentives.

The only request that Oetken granted was a request to sever the campaign finance charges — what Oetken describes as the Straw Donor scheme (funneling money to pro-Trump entities) and the Foreign Donor scheme (funneling Russian money to pro-marijuana politicians).

The “Straw Donor Scheme” (Parnas and [Igor] Fruman): First, the Government alleges that Parnas and Fruman conspired in 2018 to disguise and falsely report the source of donations to political action committees and campaigns, thereby evading federal contribution limits, in order to promote their nascent energy business venture and boost Parnas’s profile.

The “Foreign Donor Scheme” (Parnas, Fruman, and [Andrey] Kukushkin): During the same time period, Parnas and Fruman were working with Kukushkin on a separate business venture: a nascent cannabis business. Among their activities was making political contributions to candidates in states where they intended to seek licenses to operate a cannabis business. The Government alleges that Parnas, Fruman, and Kukushkin conspired to disguise a one-million-dollar contribution from a Russian national to evade the prohibition on political contributions from foreign nationals.

Oetken will sever those charges from the Fraud Guarantee charges, which currently involve only Parnas (and in which David Correia already pled guilty and cooperated with the government).

The “Fraud Guarantee Scheme” (Parnas): Parnas was also working with David Correia on pitching another business venture to be called “Fraud Guarantee.” The Government alleges that Parnas and Correia defrauded several investors in Fraud Guarantee by making material misrepresentations to them, including about the business’s funding and how its funds were being used.

That puts the trial involving Rudy, in which only Parnas is currently charged, after the non-Rudy trial, which is due to start on October 4.

Then, in two steps, Oetken denied Parnas’ bid to claim to 1) get access to Rudy and Victoria Toensing’s seized content to prove that 2) he was selectively prosecuted to protect the former President. Mind you, Parnas requested those in reverse order (indeed, in its response to Parnas on the selective prosecution claim, the government claimed that some of what he was asking for might be privileged). So Oetken denied those requests in order, first by ruling that Parnas hadn’t provided proof of either basis to claim selective prosecution, that he was discriminated against or that it was done out of some discriminatory purpose.

Parnas does not meet either required prong. Regarding discriminatory effect, Parnas fails to show that others who are similarly situated have not been prosecuted. This requires showing that individuals outside the protected class committed roughly the same crime in roughly the same circumstances but were not prosecuted. See United States v. Lewis, 517 F.3d 20, 27 (1st Cir. 2008). However, individuals similarly situated to Parnas were prosecuted along with Parnas, including two who share his national origin (Fruman and Kukushkin) and one (Correia) who does not. Moreover, while Parnas was subject to a Congressional demand for information at the time of his arrest, Fruman was as well, and while Parnas complied with that demand several months later, Fruman did not.

Regarding discriminatory purpose, Parnas’s argument is not just speculative, but implausible. Citing Twitter posts, Parnas argues that “[m]illions of Americans already believe that [former] Attorney General Barr may have interfered in some aspect of Mr. Parnas’s investigation and prosecution, based on the public record.” Parnas asserts that his indictment and arrest were a means to thwart Parnas’s testimony in the impeachment inquiry of former President Donald Trump. But the theorizing of Twitters users, and Parnas’s own speculation, do not constitute evidence of an improperly motivated prosecution. Indeed, Parnas was, by his own admission, not cooperating with the Congressional demand as of the day of his indictment. To accept Parnas’s conspiracy theory, the Government would have to have known that, one day in the future, Parnas would change his mind and decide to cooperate with the Congressional demand. Furthermore, the Government’s conduct since Parnas’s arrest undermines his theory. The Government consented to allowing Parnas to produce documents to the House impeachment committee, and it has not objected to Parnas’s media interviews and television appearances.

It’s actually not a conspiracy theory that Parnas was prosecuted in the way he was partly as an attempt to shut him up, though when Parnas first argued this, he claimed he was prosecuted to prevent him from testifying in the Former’s first impeachment which, as Oetken notes (and I noted in the past) doesn’t accord with the known facts. And Parnas chose not to present some of the most damning evidence of this, probably because it would incriminate himself.

In any case, having denied Parnas’ selective prosecution claim, in the very next section, Oetken denies Parnas’ request (in which the other defendants joined) to get access to the Rudy-Toensing content, citing his decision rejecting Parnas’ selective prosecution claim.

The Giuliani and Toensing warrants do not authorize the Government to search for evidence related to this case, nor do any of the accounts or devices involved belong to Defendants. The Government represents that it will not use any of the evidence seized pursuant to these warrants at trial in this case. Thus, the only bases for discovery of these materials would be (1) if they contain statements by Defendants that are “relevant” to the charges in this case, or (2) if they are “material” to preparing a defense to the Government’s case.

First, Defendants contend that the search warrant returns are likely to contain communications between Giuliani and Toensing and Parnas. But such communications are likely to have already been produced from Parnas’s and Fruman’s own accounts and devices, and Defendants have not shown that they are related to the charged case, material, and noncumulative.

Second, Parnas suggests that the warrant returns may contain evidence relevant to his selective prosecution claim. The Court has already rejected that claim, and nothing in Parnas’s letter alters the fact that Parnas has failed to make the requisite showing for such a claim.

This is unsurprising on a matter of law, but several points about it are worth closer focus: First, Oetken notes that the government can only access that information seized from Rudy and Toensing that relates to the crimes for which probable cause was laid out in the warrants, that is, Rudy’s influence-peddling, which also implicates Parnas. By description, those warrants do not include any claim that Rudy, with Parnas, attempted to obstruct the impeachment inquiry by hiding details of the influence-peddling scheme. So the warrants would not have provided access to the content of most interest to Parnas, content he’s pretty sure exists or existed.

Oetken is silent about whether any warrants have been obtained since the government finally got access to the first tranche of material seized in 2019.

Oetken then claims that if useful communications existed, they would not have been turned over in the warrant returns served on Parnas and Fruman’s own devices, because those warrants obtained permission for evidence of different crimes. Except there’s very good reason to believe that’s not true: that’s because, by October 21, 2019, the government and Oetken both know, Parnas attempted to delete his own iCloud account. Parnas did not succeed in that attempt — the government had already gotten a preservation order with Apple. But that doesn’t mean there isn’t some other content he once had that he thinks Rudy or Toensing may have retained. Indeed, in his request for the information, Parnas asserted the information seized from Rudy and Toensing likely included conversations — conversations that may have been deleted — about how to address their prior relationships and the unfolding investigation.

The seized evidence will also likely contain a number and variety of communications between Giuliani and Toensing and Parnas that are directly discoverable under Fed. R. Crim. P. 16, evidence of any conversations between Giuliani, Toensing, and others, including Parnas, that may have been deleted, communications between Giuliani, Toensing and others about the defendants and how to address their prior relationships, the arrests, and the unfolding investigation.

Those materials might help Parnas describe why John Dowd attempted to assert an interlocked attorney-client relationship that ultimately put the then-President in a joint defense agreement with at least one pretty sketchy Ukrainian, which in turn might explain how this investigation proceeded as it did (including why it didn’t expand into Rudy’s dalliance with a different Ukrainian agent of Russia). But Parnas as much as describes it as an obstruction attempt — an obstruction attempt he, when he attempted to delete his own iCloud account, would have been a part of before he wasn’t a part of it anymore. Given Rudy’s  descriptions of the crimes covered by the warrants, that attempt was not a part of the warrants originally obtained on Rudy and Toensing in 2019, and it wasn’t a part of the warrants obtained in April, but given the new evidence (Parnas’ own declaration), and given that Jeffrey Rosen is no longer around to obstruct investigations into the Former, SDNY (or EDNY) could ask for new warrants for permission to search for evidence of that crime.

If SDNY asked for such warrants, Oetken would have been the one they would ask.

Meanwhile, a month after Special Master Barbara Jones first described how she would proceed in reviewing Rudy and Toensing’s seized materials, including her promise to, “provide the Court with a timeline for concluding the privilege review once she better understands the volume of the materials to be reviewed,” she has made no public reports. Given the pace at which she worked to review Michael Cohen’s content in 2018, in which her first report was issued 38 days after she was appointed, we should expect a report from her in the near future (the same 38 days would have been July 13, though COVID has slowed everything down).

Meanwhile, yesterday’s ruling took a curious approach to privilege issues. One thing Kukushkin complained about was that, by choosing to share information with the impeachment inquiry, Parnas shared information in which they had an attorney-client privilege. Oetken dismissed this concern (and Kukushkin’s larger bid to sever his trial from Parnas’) in part by relying on prosecutors’ representation that they would not rely on privileged material

Kukushkin also argues that because Parnas waived the attorney-client privilege by providing certain materials to Congress, the Government may be able to introduce privileged materials against Parnas, prejudicing Kukushkin. This argument is speculative, and the Government disavows any intent to seek to offer privileged materials.

Finally, all the defendants complained that a key email used against them in the superseding indictment was privileged, and argued that that, plus all fruit of that (a number of other search warrants), should be thrown out.

Defendants assert that an email, quoted in several search warrant applications, is protected by the attorney-client privilege and that, as a result, the returns from the search warrants should be suppressed and the Superseding Indictment itself should be dismissed. This issue will be addressed in a separate opinion and order.

This is a different attorney-client dispute, not the claims of privilege that John Dowd invented to protect a cover-up in 2019. The government argued that it was not privileged, but even if it were it would be covered by the crime-fraud exception. “[T]he crime-fraud exception applies because the email furthered a criminal effort by the defendants to utilize attorneys to structure a new business to conceal the involvement of a foreign national.” But Oetken, who presumably approved of those allegedly poisoned fruit warrants like he approved of the warrants against Rudy and Toensing, has deferred it to a separate opinion.

Oetken knows far more about the substance of these attorney-client disputes, and this is actually the third attempt in this case where a defendant attempted to hide evidence by invoking privilege. In the third, prosecutors successfully argued that materials pre-existing attorney-client privilege are not privileged.

But given all these claims of attorney-client privilege he has been watching, it’s likely he’s unimpressed with the third one.

50 replies
  1. Lawnboy says:

    Of particular note, the DC Bar voted to remove Rudy G’s privileges as an attorney. Insiders say the vote was “euonyemus”.

    (recall the presser outside the garden/porn centre)

  2. BobCon says:

    Does this help Toensing or Giuliani at all by keeping evidence under wraps that they don’t want public?

    Or is that evidence likely to come out anyway?

    Or is it still too soon to know anything?

  3. Fran of the North says:

    Apologies for the WAY O/T post.

    The Guardian is reporting this morning that leaked secret Kremlin documents reveal that Putin authorized an operation in Jan 2016 to help Trump get elected in November. That probably isn’t news to regular readers.

    The interesting part is the very clear assessment of Trump: “impulsive, mentally unstable and unbalanced individual who suffers from an inferiority complex”.

    Of course, this could also just be more efforts to stir the pot, but according to the article, western intelligence agencies have examined the docs and they have strong indications of being genuine.

    More here: https://www.theguardian.com/world/2021/jul/15/kremlin-papers-appear-to-show-putins-plot-to-put-trump-in-white-house

    • earlofhuntingdon says:

      For sure, the Former Guy had a historically unique and abjectly dependent relationship with the Russian president. How and why is another matter. But no one is better than Putin at stirring his opponent’s pot with his disinformation spoon.

      The Guardian is far from perfect. This material should first be established as legitimate. If not, we lay ourselves open to what Marcy described a couple of days ago. That these clams are subsequently deemed to be fraudulent, which imperils other legitimate claims to the contrary. Think Dan Rather and the Bush National Guard gambit.

      • earlofhuntingdon says:

        The story’s lead writer, Luke Harding, is regarded by his critics as a creature of the security services. The second author, Julian Borger, is right behind him. There are parallels among the WaPo’s national security columnists.

    • BobCon says:

      From the article:

      “The papers, seen by the Guardian, seem to represent a serious and highly unusual leak from within the Kremlin.”

      I wish The Guardian had dug more deeply into the implications of that sentence. What is the purpose of the leak? Damaging Trump? Smokescreen? Discrediting anti-Trump allegations by later release of contradictory information?

      If the Guardian doesn’t know, they should at least spend more time noting that Kremlin leaks tend to have agendas behind them.

    • drouse says:

      What’s not really clear is exactly who is trying to stir the pot. My first take was that it was an attempt by Putin to toss a large rock into the mud puddle that is our politics. Then again, the article says that our intelligence agencies have been aware of it for months. So at this moment I’m more inclined to believe that it was somebody from our intelligence services who gave it to the Guardian. The motivations behind the leak aren’t really clear.

      • Rugger9 says:

        It is interesting that this is coming out now. I would be skeptical about this report for a couple of reasons:

        This might finish DJT off as a viable 2024 candidate, and would certainly give his erstwhile supporters (like DeSantis) reasons to not push for DJT’s restoration either. Note that DeSantis is also named in other reports as part of the Russian 2016 support. Given that Biden so far has shown zero indications of playing footsie with Vlad, why would Putin burn an otherwise reliable asset without a reliable alternative? It makes no sense.

        Pointing to the theory that another one of the GQP candidates (like DeSantis) would fill DJT’s role as well assumes that candidate would succeed equally and I really do not see that happening especially how many of them slobbered over DJT’s loafers. Election isn’t a sure thing for them.

        • earlofhuntingdon says:

          That plotline requires the Guardian story to be proven correct. If it’s taken up, then sufficiently debunked – at least in the rightwing media – it would add to Trump’s mythology and undercut in multiple ways other attempts to reveal his past wrongdoings.

        • timbo says:

          Unfortunately, being proven to be correct might still not help discomfit Twitler significantly. We’ve already seen many true stories about Twitler do little more than inspire his supporters to support him even more fervently. What really has to happen is that Twitler needs to suffer actual, real, sustainable legal setbacks in the civil and criminal courts.

        • drouse says:

          The more I think about it, several months is a rather vague amount. Two, three months? Six, ten or twelve? Before the election and was buried by those late Trump appointees. So yeah, why exactly now?

        • earthworm says:

          “This might finish DJT off as a viable 2024 candidate…”
          Maybe, but others (replacements) will be right behind him, in that case. The modus operandi has been established, not only campaigning style but also casting doubt on elections.

    • Troutwaxer says:

      I would agree with everyone else’s suspicions. There’s something about the article that just doesn’t read quite right, though I’m not sure why. But it would clearly be a mistake to put much credence in the story.

      • earlofhuntingdon says:

        “The report seen by the Guardian features details redolent of Russian intelligence work, diplomatic sources say.”

        Verisimilitude is a key ingredient of all propaganda. The thing claimed must have the fragrance, aroma, and smell of the real thing. After 45 “spellbinding” paragraphs, that’s all Luke Harding has, that, the passive voice and a handful of quotes by former denizens of the diplomatic and security services, which convey the redolence of critical analysis. Harding offers up a gruel so thin, Oliver Twist would turn it down, or have the presence of mind to ask for more oats in his watery porridge.

        • Rugger9 says:

          Add to that the absolute control over messaging that Putin has in Russia, especially the intelligence services and this report has even less traction. Putin has no good reason to release this now.

          I did see the corporate press run with the so-called scoop and it makes me wonder what we’re not supposed to find out about this week. Tomorrow’s the Friday news dump after all. What shoes are dropping?

        • Troutwaxer says:

          The only reason I can think of for Putin dropping this now is because he wants to send a signal to Biden about where to look for evidence about Trump, though I’m not sure what would motivate such a signal. Maybe he’s looking for a rapprochement? Or trying to aim U.S. intelligence at a particular target?

        • Alan Charbonneau says:

          “The only reason I can think of for Putin dropping this now is because he wants to send a signal to Biden about where to look for evidence about Trump…”

          A signal about where to look for evidence?
          A report that describes Trump as “impulsive, mentally unstable and unbalanced individual who suffers from an inferiority complex” is hardly newsworthy and I see nothing in this article that is pointing towards anything.

    • P J Evans says:

      A *lot* of people are advising caution with this one. It may swim like a duck, but it could be a coot….

    • WilliamOckham says:

      If I were Putin, I would put out a fake document that represented my actual policy. Anyone who’s been paying attention knows that the document more or less reflects Putin’s policies as observed, with a few incendiary statements thrown in. When the document gets debunked, the policy becomes more deniable.

      • earlofhuntingdon says:

        A persuasive scenario, especially as the information is almost certainly a planned disclosure by Putin. Even if substantiated as true – more on the provenance of this info would help a great deal – Putin could do great harm with it. It would force Biden to respond to both Trump and Putin. The GOP response would be denial and even more open warfare. That would further derail progressive appointments and legislation, and cause considerable havoc through 2024.

      • emptywheel says:

        I think two things are off. First, the timing. The approval date is too late–it all started earlier. This puts the approval after Peskov’s discussions with Cohen about a Trump Tower.

        And the details about the three intelligence agencies with no details about Oligarchs, starting with Prigozhin, but including Agalarov and Deripaska.

        Plus I think they would have been happy at that point had Trump ended up winning and ended up competently implementing their policy. They kept trying. Donnie kept fucking things up, and not for lack of trying.

        • P J Evans says:

          At least one Russian is saying the grammar is off. Don’t know if that’s true, but that could certainly be intentional.

        • Savage Librarian says:

          Here’s a WAG from my tiny corner of the world. Since disinformation was the topic of your previous two posts (i.e. Steele dossier/Alfa and Darrell Cooper twitter), it seems an odd coinky-dink for this alleged Putin related article to appear now.

          Did something about your posts piss somebody off? Is this a test? Maybe or maybe not. But it does seem like a challenge from another sloppy thinker. Speaking of which, I have some new rhymes/beats to follow, but OT…

    • timbo says:

      What specific method(s) are being used to confirm the validity of these documents is the first question that jumps to mind.

      • dwfreeman says:

        Beyond documenting what are already known facts and US intelligence conclusions about Russia’s active measure campaign in Russia’s direct support of Trump’s election as the 45th US president in 2016, what would you discount about the accuracy of this story as Harding relates it?

        Russia’s interference in the 2016 election is a historical fact whether Putin and his government met and signed documents authorizing its intelligence services role in that effort or not. Disinformation is intended to mislead, create ambiguity and alter the historical record to manage or change public perception of certain events. Russia colluded with Trump in his presidential election. That is a fact. Deal with it.

        Trump is a controlled Russian asset and has been since KGB recruitment in the 80’s and first visit to Moscow. Now, Putin’s government may want to hide that knowledge, camouflage or deny it, but the historical record doesn’t lie. And whether you challenge Harding’s reports that Manafort visited Assange three times before the 2016 election, or the raw intelligence findings of the Steele dossier, they all point to the same conclusion reported today in the Guardian.

        • bmaz says:

          It does not document or establish squat with any evidentiary credibility. You are WAY out over your skis. This thing deserves a rather large grain of salt.

        • dwfreeman says:

          Why am I over my skis? Dr. Wheeler is speculating on what the story means as if she has first-hand documentary evidence to the contrary and personal knowledge, when she doesn’t. I don’t know whether the Guardian documents are authentic and purport what the newspaper alleges and is reporting as fact, but the story does document something up to now, Russia has officially denied. that Russian officials met and reviewed an action that we know occurred. And that is the only conclusion I am drawing from the story. It acknowledges a common understanding of a factual event in time. And I also stand by the assertion that Trump is a Russian asset.

          But your silence about her assertions implies that you accept her conclusions without question. I don’t dispute her conclusion that this story alters the timeframe of Russian planning for involvement in interfering in the US presidential race. But I think the buildup for that occurred way before January 2016 and the actual Kremlin greenlight occurred way before then. I believe that official planning goes back for years and begins with Trump’s actual recruitment as target of American influence going back decades.

        • P J Evans says:

          Marcy isn’t saying that the doc is 100% true or accurate. We don’t have the evidence to prove that – and that should make people more cautious, given that the previous Big Story was the Steele dossier.

        • bmaz says:

          Because you just blithely spew stuff that you have no clue or certainty on. Further, Marcy had not “speculated on anything when you made that comment. Perhaps you are confusing this thread with her later one today. My “silence” does not “imply” diddly squat, and it is not your purview to assert that it does.

          Then you just blithely state that that Trump is a Russian agent, this makes the word speculative look not strong enough as to your statement. You are just saying whatever makes you feel good,

          Lastly, here is what I have to say about the “Leaked Report”. There is no authentication, no chain of custody, no established provenance, and there is nothing in there that was not basically known before. You on the other hand, early on note a little of that, and then proceed as if the thing really has value because the Guardian published a diffuse and bizarre report on it. To my eye, the “Leaked Report” is completely useless.

          I trust this has answered your question and why you were out over your skis. Not to mention hijacking a thread that did not involve the “Leak”.

        • dwfreeman says:

          For the record, you have misread my comments in this post, which all deal with commentary presented here, not elsewhere in any other emptywheel post. I didn’t call Trump an agent, but a controlled asset, which many others have labeled him, including US intelligence officials, a former Washington DC KGB station chief Yuri Shvets (in Craig Unger’s book, “American Kompromat,” who as an experienced agent was familiar with his recruitment by the Soviet government).

          Trump likely is a Russian agent, but I won’t “spew that” blithely without greater evidence. I haven’t challenged any known assertions presented here about the timeline of the Trump-Russia case or what Harding in years of Moscow reporting for the Guardian newspaper and several books on Putin’s government, including “Shadow State, Murder, Mayhem, and Russia’s Remaking of the West,” the Steele dossier, and various intelligence report findings about the 2016 presidential election, acknowledge, document or disprove.

          Russia interfered in the 2016 election, it did so for a variety of reasons, Harding’s story provides a date certain for apparent official Kremlin action on that point. Whether the reporting and the documents upon which it relies in supporting that contention are true and accurate, will perhaps never be known. But the Guardian story doesn’t alter the historical record. And that was the substance of my post which didn’t challenge any commentary Dr. Wheeler offered on any critical point.

          In fact, I support her position entirely on the larger question that the cultivation of Trump as a Manchurian Candidate began way before January 2016.

        • bmaz says:

          So, you are still hijacking this thread with the same retread lengthy material as your earlier comment when there is a thread right after it for this subject. I’ll stand by my original response.

        • dwfreeman says:

          No Sir. I am merely expressing a point of view. You have a chosen to make an issue out of it.

        • bmaz says:

          Well, at least you didn’t waste ten column inches with your repetitive speculative drivel this time. Give it a rest.

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