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Why Did Gucciardo Pay Giuliani Partners For His “Loan” To Fraud Guarantee?

Jim here.

I’ve been troubled by the New York Times’ description of the funds provided by Charles Gucciardo that were used by Lev Parnas to pay Rudy Giuliani for his “consultation” for Fraud Guarantee. The most troubling bit is this:

Mr. Gucciardo, 62, a plaintiff’s lawyer, has not been implicated in any wrongdoing, and there is no evidence that he was involved in the Ukrainian pressure campaign.

That may well be, but there are a number of issues that simply don’t add up here. First, although Gucciardo is not accused at this time of any wrongdoing, it is clear that he engaged deeply with the same set of characters who are at the center of the Ukraine activities driving the ongoing impeachment action in the House of Representatives.

Gucciardo also had made a large donation to America First Action around the same time as the $325,000 donation from Parnas and Fruman. From the Times article, continuing about Gucciardo:

In 2018, he made his biggest donation on record to date — $50,000 to the pro-Trump super PAC America First Action — and attended an event for major donors at the Trump hotel featuring appearances by the president and Donald Trump Jr.

It was there that he met Mr. Parnas and Mr. Fruman, who had recently co-founded a company called Global Energy Producers that donated $325,000 to the PAC.

The next month, Mr. Parnas, Mr. Fruman and Mr. Gucciardo all went on a group trip to Israel, according to people who traveled with them.

There are even pictures from the trip, reproduced here by the Daily News. Note that in the lower of the paired photos (which is also the featured image of this post), we have from left to right, Joseph Frager, Anthony Scaramucci, Charles Gucciardo (see his profile photo at his website for comaprison) and then Parnas.

First, we are told the funds were a loan that could be converted into a stake in Fraud Guarantee. Continuing from the Times story:

Mr. Gucciardo’s lawyer, Randy Zelin, said Mr. Gucciardo invested in the company because of Mr. Giuliani’s involvement.

“He understood that he was investing in a reputable company that Rudolph Giuliani was going to be the spokesman and the face of,” Mr. Zelin said, comparing Mr. Giuliani’s role to the one he had played for the personal data-security company LifeLock, which ran commercials featuring Mr. Giuliani. “When you think of cybersecurity, you think of Rudolph Giuliani,” Mr. Zelin said.

The company being promoted by Mr. Parnas, Fraud Guarantee, was billed as a way for investors to get insurance against the risk of being defrauded. Mr. Gucciardo’s money was a loan that could be converted into a stake in the company, according to people familiar with the deal.

But, the money didn’t go to Fraud Guarantee:

In an interview, Mr. Giuliani called the arrangement a “perfectly legitimate payment” for which Mr. Gucciardo received “promissory notes that were convertible into a percentage of the company.”

Mr. Giuliani said he “verified the stock agreement” and “felt comfortable getting it from somebody as reputable as him,” adding that, after the payments, “I’ve gotten to know Charles very well. He’s a very honorable man, a very good man.”

Mr. Zelin said Mr. Gucciardo did not pay Mr. Giuliani personally, but rather made his investment by paying one of Mr. Giuliani’s consulting firms, Giuliani Partners. Mr. Gucciardo was “simply one of numerous other investors in the company and is nothing more than a passive investor,” Mr. Zelin said.

Wait. What? Why would Gucciardo have paid Giuliani directly anyway? For a loan convertible to a stake in Fraud Guarantee, the money went to Giuliani Partners instead of Fraud Guarantee?

Why?

Well, that’s where I no longer can buy into Gucciardo being an innocent swept up in the awesomeness of Parnas, Fruman and Giuliani. As has been pointed out many times, Fraud Guarantee mostly never existed. Certainly, by the time these funds changed hands in September and October of 2018, someone investing a half million dollars, and especially if that someone is a high-powered attorney, would be expected to do just a bit of due diligence. For example, here’s Roll Call giving dates for events related to Fraud Guarantee:

In the search for Fraud Guarantee, three names that all appear to have links to Parnas emerged: fraudguarantee.com, Strategic Global Assets LLC and Fraud Guarantee LLC.

Florida Department of State records show that Strategic Global Assets LLC registered fraudguarantee.com as a fictitious name in March 2013. Strategic Global Assets’ corporate filings list Parnas and Florida businessman David Correia as managers. Correia was also among the defendants in the indictment unsealed last week. He was arrested in New York on Monday.

The Florida Department of State dissolved Strategic Global Assets in September 2016 after it failed to file an annual report, records show.

/snip/

lawsuit was filed against Strategic Global Assets for failure to pay rent in Palm Beach County, Fla., in January 2015, and a default judgment in the landlord’s favor came down in July of the same year.

Strategic Global Assets’ official address on state records was changed in September 2015 to that of Correia’s apartment at the time. Correia was listed as the registered agent for Strategic Global Assets in that same filing. He is identified as Fraud Guarantee’s co-founder and chief operating officer on that company’s website.

Florida records show that another company called Fraud Guarantee LLC was dissolved in September 2014 for failing to file an annual report. It’s not clear whether that company was associated with Parnas or Correia, but it shared the same street address that appears for Strategic Global Assets and fraudguarantee.com on Florida court records and an archived copy of the company’s website.

All of that bad info should have made anyone getting ready to invest so much money run away screaming. But in putting the funds into Rudy’s consulting business, they were essentially being hidden from multiple creditors owed funds by Giuliani, Parnas and Fruman.

First, as even the Times article above notes, Giuliani is in the midst of an ugly divorce, and so funds going directly to him would be contested in that ongoing proceeding.

Further, the Parnas and Fruman donation to America First Action was almost immediately the subject of a public complaint filed with the Federal Election Commission. This filing in July was public by the first investment in September of 2018. Further, although the Campaign Legal Center did not bring further attention to it  until 2019, an attorney of Gucciardo’s caliber should have been able to find the ongoing saga of the Pues lawsuit. Here’s a description from USAToday:

A thornier case lingers from a federal judgment that Parnas owes for a movie that never got made.

The Pues Family Trust IRA filed a federal lawsuit in 2011 in New York City seeking repayment of a $350,000 loan to Parnas. The trust’s executor, Michael Pues, described the money in court documents as a bridge loan for a movie with the working title “Anatomy of an Assassin,” while Parnas found more investors.

Parnas denied in a court filing that the money was a loan. Parnas said the movie, which he said was going to be called “Memory of a Killer,” fell apart because of financing problems, including Pues not contributing $1 million as promised.

A judgment in the federal case in March 2016 ordered Parnas to pay the Pues Family Trust $510,435 for the loan and 9% annual interest.

So, Parnas had to be careful about funds flowing through entities he controlled, because the Pues Family attorneys were watching carefully (and in fact pounced on the news of the America First Action donation) and Rudy had to be careful about not having the money go directly to him or his ex-wife would seek the funds. Shouldn’t Gucciardo have asked why the money didn’t just go to Fraud Guarantee? Shouldn’t he have asked why he had to divert funds to Rudy’s consultancy? This just doesn’t add up. Given his deep involvement with these same players, it seems much more likely Gucciardo understood the winks and nudges involved in getting funds to Giuliani in return for his “pro bono” representation of Donald Trump.

On the Potential Viability of Foreign Agent Charges for Rudy Giuliani

Since the NYT revealed that SDNY is investigating Rudy Giuliani for what they call “lobbying” laws,

Mr. Lutsenko initially asked Mr. Giuliani to represent him, according to the former mayor, who said he declined because it would have posed a conflict with his work for the president. Instead, Mr. Giuliani said, he interviewed Mr. Lutsenko for hours, then had one of his employees — a “professional investigator who works for my company” — write memos detailing the Ukrainian prosecutors’ claims about Ms. Yovanovitch, Mr. Biden and others.

Mr. Giuliani said he provided those memos to Secretary of State Mike Pompeo this year and was told that the State Department passed the memos to the F.B.I. He did not say who told him.

Mr. Giuliani said he also gave the memos to the columnist, John Solomon, who worked at the time for The Hill newspaper and published articles and videos critical of Ms. Yovanovitch, the Bidens and other Trump targets. It was unclear to what degree Mr. Giuliani’s memos served as fodder for Mr. Solomon, who independently interviewed Mr. Lutsenko and other sources.

Mr. Solomon did not immediately respond to a request for comment.

The lobbying disclosure law contains an exemption for legal work, and Mr. Giuliani said his efforts to unearth information and push both for investigations in Ukraine and for news coverage of his findings originated with his defense of Mr. Trump in the special counsel’s investigation.

He acknowledged that his work morphed into a more general dragnet for dirt on Mr. Trump’s targets but said that it was difficult to separate those lines of inquiry from his original mission of discrediting the origins of the special counsel’s investigation.

Mr. Giuliani said Mr. Lutsenko never specifically asked him to try to force Ms. Yovanovitch’s recall, saying he concluded himself that Mr. Lutsenko probably wanted her fired because he had complained that she was stifling his investigations.

“He didn’t say to me, ‘I came here to get Yovanovitch fired.’ He came here because he said he had been trying to transmit this information to your government for the past year, and had been unable to do it,” Mr. Giuliani said of his meeting in New York with Mr. Lutsenko. “I transmitted the information to the right people.”

And since the WSJ reported that Pete Sessions — named as Congressman 1 in the Lev Parnas/Igor Fruman indictment — was cooperating with a grand jury subpoena targeting Rudy,

A grand jury has issued a subpoena related to Manhattan federal prosecutors’ investigation into Rudy Giuliani, seeking documents from former Rep. Pete Sessions about his dealings with President Trump’s personal lawyer and associates, according to people familiar with the matter.

The subpoena seeks documents related to Mr. Giuliani’s business dealings with Ukraine and his involvement in efforts to oust the U.S. ambassador in Kyiv, as well as any interactions between Mr. Sessions, Mr. Giuliani and four men who were indicted last week on campaign-finance and conspiracy accounts, the people said.

Mr. Sessions’ knowledge of Mr. Giuliani’s dealings is a primary focus of the subpoena, the people said.

There has been a closer review of whether it would be possible to indict the President’s personal lawyer under foreign agent laws, with broad consensus that what Rudy is doing is actually covered by FARA — and not just his work for Ukraine, but also (among other places) for Turkey.

But there have been a number of claims that, I think, have been too pat about how easy or hard this is going to be.

Greg Craig, Tony Podesta, Vin Weber, and Bijan Kian are not apt precedents

First, a number of people have looked at how SDNY considered — but did not charge — Greg Craig, Tony Podesta, and Vin Weber under FARA, suggesting the same considerations would hold true with Rudy. Others have looked at Greg Craig (who was prosecuted but acquitted in DC for FARA after SDNY decided not to charge it) and Bijan Kian (who was convicted but then had his conviction thrown out by Judge Anthony Trenga based on the legal theory DOJ used) to suggest these cases are too difficult to charge to get Rudy.

It is absolutely the case that when powerful men with skilled lawyers have been pursued under FARA in recent years, DOJ has succeeded not in trial, but instead has gotten either plea deals or failed at trial (and that may have been one of the facts behind Mueller’s decision to strike a plea deal with Paul Manafort). That is sound evidence that SDNY is no doubt aware of.

But several things distinguish Rudy.

Most notably, all of those earlier cases came before DOJ’s newfound commitment to prosecuting FARA, with Mike Flynn prosecutor Brandon Van Grack taking over where a woman named Heather Hunt had been in charge before. At a minimum, that means a process that originally took place with Craig, Podesta, Weber, and Kian under an assumption that FARA would be treated solely as a registration issue may now be taking place under an assumption that violations of FARA — presumably to include both a failure to register and (what most charges have been so far) false statements under registration — can be prosecuted. That assumption would dramatically change the attention with which DOJ would document their communications, so prosecutors would not now be stuck going to trial (as Craig’s prosecutors were) without having DOJ’s documentation of a key meeting.

Notably, the same thing that triggered the FARA prosecution of Mike Flynn — concerns raised by Congress — happened last year when seven Democratic Senators wrote National Security Division head John Demers asking for a review. So there may well be documentation of Rudy’s claims about whether he does or does not need to register that SDNY is building a prosecution around.

Plus, one thing clearly distinguishes Rudy from all these other men. Rudy is not taking this investigation seriously, and does not have a lawyer reviewing his exposure. From reports, he may not have the ready cash to pay the likes of Rob Kelner (Flynn’s original, very competent, lawyer) or Robert Trout (Kian’s excellent lawyer). So he may be doing things now (not least, running his mouth on TV and making public statements about who he works for and how it gets paid) that put him at greater exposure.

Rudy G’s efforts to implicate State and DOJ (and the President) in his work

That said, another thing distinguishes Rudy from these past cases. Since the whistleblower complaint got made public, he has spent most of his time insisting that everything he did, he did with the awareness and involvement of — at least — the State Department. And in Trump’s July 25 call to Volodymyr Zelensky, he invoked Bill Barr’s name right alongside his nominal defense attorney.

Both foreign agent statutes (FARA — the one being discussed for Rudy, and 18 USC 951 — another one, with more flexibility, that Kian was charged under) require registration with the Attorney General. And while telling foreigners you’re negotiating with that the Attorney General will be by soon to pick up the disinformation demanded does not fulfill the requirements for registry (in part, the point of registering is to provide a paper trail so the public can track who is paying for what), it does change things that Rudy is suggesting that his work has the imprimatur of official policy to it.

That said, the assumption that implicating powerful government figures will keep you safe is a dangerous proposition. If the easiest way to end the Ukraine inquiry is to blame Rudy for it all (and if that’s still possible after several weeks of damning testimony), that may well come to pass.

And if Bill Barr needs to greenlight a FARA prosecution of Rudy as a way to minimize the damage to the Administration, and to himself, he may well do that (yet another reason why he should have recused long ago).

That’s all the more true given that most of Trump’s aides seem to recognize how damaging Rudy is for Trump’s exposure. If Trump won’t separate himself from Rudy, his lackeys might one day decide, then separate Rudy from Trump by prosecuting him, the same way they separated Michael Cohen from Trump.

That said, with Trump, loyalty is always transactional. And if he believes Rudy has dirt that can bring him down — and given the likelihood some of what Rudy is doing is the continuation of what Paul Manafort had been doing since August 2, 2016, that may be true — then Trump will defend Rudy’s work even if it means claiming everything he did operated under Article II authority.

The additional factor: ConFraudUs

The discussions about Rudy’s exposure under FARA, however, seem not to have considered another factor: that Lev Parnas and Igor Fruman have already been charged with conspiracy in conjunction with actions Rudy had a key role in. The Ukrainian grifter indictment charges them with two counts of Conspiracy to Defraud the US for hiding what money was behind their influence campaign on Ukraine (count 1) and Nevada marijuana (count 4), as well as False Statements to the FEC (count 2) and falsification of records (count 3) tied to the Ukraine influence operation. Counts 1-3 all pertain to the Ukrainian grifters laundering of campaign funds through Global Energy Producers, a front that (SDNY alleges) they falsely claimed was “a real business enterprise funded with substantial bona fide capital investment,” the major purpose of which “is energy trading, not political activity.” Those funds went, among other places, to the Trump related Super PAC America First Action and to Congressman Sessions.

Rudy has equivocated about his relationship to the Ukrainian grifters (and claims it goes through Fraud Guarantee, not GEP). But John Dowd, writing as the grifters’ lawyer, already stated for the record that he does have ties and those ties relate to his representation of the President. That is, the grifters are working for him, even while he works for them.

That’s important because Sessions’ statements have denied any official action in response to meetings with the grifters, but he also had meetings with Rudy in the time period, official action in response to which he has not denied. In addition, Rudy (whom Sessions says he has been friends with for three decades) also headlined a fundraiser for Sessions. And on top of the straw donations the grifters gave Sessions directly, America First Action gave Sessions far more to him, $3 million, the indictment notes twice.

In other words, while Sessions has denied doing anything in response to the grifters’ meetings, he has not denied doing anything in response to Rudy’s communications with him. If he sent his letter calling for the ouster of Marie Yovanovitch in response to a request from Rudy — whose finances are inextricably tied to the grifters — then it may be fairly easy to add him to the conspiracy the (successful) object of which was to get Yovanovitch fired. The propaganda Rudy sent (as laid out by NYT, and which the State IG already sent to the FBI earlier this year) would then simply be part of the conspiracy.

A few more points. There’s a passage of the indictment included to substantiate the allegation that the grifters were affirmatively trying to hide their purpose.

Indeed, when media reports about the GEP contributions first surfaced, an individual working with PARNAS remarked, “[t]his is what happens when you become visible … the buzzards descend,” to which PARNAS responded, “[t]hat’s why we need to stay under the radar…”

The indictment doesn’t disclose a number of details about this communication: who the interlocutor is, how it was collected, and whether it involved a mere warrant (for stored communications such as email or texts) or a wiretap. But particularly given the seeming overlap between these activities and those of people we know were surveilled during the period in question, it’s a pregnant inclusion in the indictment. It suggests the Feds may already be privy to far more about this scheme and the reasons the grifters might want it suppressed. Add that to the fact that, as WSJ reported, the Feds already have Rudy’s bank records, which will show whether he really worked for Fraud Guarantee or whether that, like GEP, is just a front.

Cui bono

Finally, consider this. The indictment says that the grifters were pushing to oust Yovanovitch to benefit  particular unnamed Ukrainians’ interests.

[T]hese contributions were made for the purpose of gaining influence with politicians so as to advance their own personal financial interests and the political interests of Ukrainian government officials, including at least one Ukrainian government official with whom they were working.

[snip]

At and around the time PARNAS and FRUMAN committed to raising those funds for [Sessions], PARNAS met with [SESSIONS] and sought [his] assistance in causing the U.S. Government to remove or recall [Yovanovitch]. PARNAS’s efforts to remove the Ambassador were conducted, at least in part, at the request of one or more Ukrainian government officials.

According to NBC, the Ukrainian in question was Yurii Lutsenko. But Lutsenko has since been ousted, and he has reneged on statements elicited by Rudy implicating the Bidens. More importantly, one of the promises Zelensky made in his July 25 call to Trump was to put in his own prosecutor who would pursue the two investigations — to trump up a claim Ukraine was behind the election tampering in 2016, and to invent evidence against Hunter Biden — that Trump wanted.

The President: Good because I heard you had a prosecutor who was very good and he was shut down and that’s really unfair. A lot of people are talking about that, the way they shut your very good prosecutor down and you had some very bad people involved. Mr. Giuliani is a highly respected man. He was the mayor bf New York Ci:ty, a great mayor, and I would like him to call you. I will ask him to call you along with the Attorney General. Rudy very much knows what’s happening and he is a very capable guy. If you could speak to him that would be great. The former ambassador from the United States, the woman, was bad news and the people she was dealing with in the Ukraine were bad news so I just want to let you know that. The oteer thing, There’s a lot of talk about Biden’s son. that Biden stopped the prosecution and a lot of people want to find out about that so whatever you can do with the Attorney General would be great. Biden went around bragging that he stopped the prosecution so if you can look into it … It sounds horrible to me.

President Zelenskyy: I wanted to tell ·you about the prosecutor. First of all I understand arid I’m knowledgeable about the situation. Since we have won the absolute majority in our Parliament; the next prosecutor general will be 100% my person, my candidate, who will be approved, by the parliament and will start as a new prosecutor in September. He or she will look. into the situation, specifically to the company that you mentioned in this issue.

Which is what led to Lutsenko’s ouster.

Moreover, the prosecutor Biden shut down was not Lutsenko, but Viktor Shokin, who has written affidavits which then got fed to John Solomon on behalf of Dmitry Firtash, who is trying hard to avoid extradition (on bribery charges) to the US.

That — plus the financial and legal ties between Firtash and the grifters — suggests there may be other Ukrainians on whose behalf the grifters were working to get Yovanovitch withdrawn. Firtash is certainly one. A corrupt prosecutor with ties to Russian intelligence, Kostiantyn Kulyk, who had worked for all these guys — and who is behind a dossier on accusing Hunter Biden of corruption — may be another. That is, Yovanovitch may have been the impediment not to inventing dirt on the Bidens, which is a fairly easy ask, but instead on creating the pre-conditions for people like Firtash to go free (which would also explain the natural gas angle).

All of which is to say that it would be a fairly trivial matter to establish the evidence to charge Rudy in ConFraudUs along with the Ukrainian grifters, as SDNY already has a lot of the evidence it would need.

Yes, Rudy Giuliani is, by all appearances, in blatant violation of FARA. Yes, he may get away with that, in part because DOJ hasn’t yet figured out hard to charge it consistently (though knows what not to do given recent history), and in part because he has made sure to implicate Trump and his cabinet officials.

But there’s a larger question about whether those same financial ties expose Rudy for much uglier conspiracy charges.

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.

/snip/

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.

Rudy Giuliani Represents Fraud Guarantee Founder

Marcy has already hit the announced arrests of Rudy Giuliani clients Lev Parnas and Igor Fruman as they were about to leave the country. In reading the New York Times article about the arrests and indictment, I noticed that, at least at the time of that reading, David Correia,  one of the four men indicted, was still not in custody.

I hadn’t heard of Correia before, so I did some digging. It would appear that Correia’s Twitter handle is @DavidCorreia14. The account appears to have been taken down, but there was still a cached version on Google.

It would be easy to mistake his tweets for any standard Trump bot retweeting all of the usual conspiracy theories, rather than realizing he was in the middle of some of their more nefarious schemes.

A couple of weeks ago, the Miami Herald ran a story on Parnas and Fruman, where we see that they are basically con artists with a trail of lawsuits following them around. Most hilariously, Parnas had the gall to incorporate a company under the name Fraud Guarantee. Significantly, when I started searching around to find out more about David Correia, he turned out to be a co-founder of Fraud Guarantee:

Hmmm. Campaign finance indictment. Background in commercial mortgages. Founder of Fraud Guarantee. It’s not clear to me how Correia originally hooked up with Parnas and Fruman, but the commercial real estate angle and propensity for illegal activity sure seems like a good fit with the Trump organization.

It’s really hard to get over just how much outright gall it took for Parnas and Correia to name their company Fraud Guarantee. And for Parnas to be represented by Rudy Guiliani, who has been tasked with obtaining fraudulent dirt on the Biden family for Trump, the circle just keeps closing in on itself. (Note added as I was proofing the post: it appears that the Fraud Guarantee website has been scrubbed. Glad I got those screengrabs!)

As a postscript for those of us in Florida, it’s also especially juicy that the fraudulent shell company set up to funnel money to political campaigns, Global Energy Producers, also made a $50,000 contribution to the campaign to elect currentFlorida Governor Ron DeSantis.