David Correia, a business associate of Rudy Giuliani's ex-employee Lev Parnas, pleaded guilty Thursday to the conspiracy and made false statements to election officials about a donation to a political action committee that supported President Donald Trump.
Correia, 45, admitted in Manhattan federal court that he teamed up with Parnas to defraud investors in their potential fraud protection business, known as a Fraud Guarantee. The hearing was practically conducted via video conferencing and telephone lines because of the coronavirus pandemic.
Most of the money raised but not spent on this never-established company went to Parnas, Correia's attorney told a judge.
Correia told a judge that in October 2018 he falsely swore the accuracy of the content of a statement to the Bundestag Electoral Commission because he wanted the FEC to close an investigation which he said "was not justified at the time".
U.S. assistant attorney Douglas Zolkind said Correia lied in his affidavit to the FEC, claiming that Global Energy Producers – an allegedly active company founded by Parnas and co-defendant Igor Fruman – actually had one on GEP's behalf Donation of $ 350,000 to Trump Super PAC America Made First Action.
In fact, according to Zolkind, GEP is not an operational business and does not even have a bank account.
Instead, the $ 350,000 came from a mortgage on Fruman's property and was transferred to an account controlled by Parnas, which prosecutors said funded the donation to the PAC under the name GEP.
Zolkind said Correia and Parnas requested investments from seven people from 2012 to 2019 who each contributed between $ 200,000 and $ 500,000 apiece to fund the fraud guarantee.
The company reportedly planned to offer fraud insurance to investors in other companies.
The fraud guarantee never went into operation, but Correia and Parnas "told the victims that this money was only used for legitimate business," the prosecutor said.
"That was wrong," said Zolkind.
Instead of being used to set up and run the business, the majority of investor funds have been withdrawn as cash and transferred to personal accounts. Some of that money was used for personal expenses like Parnas' rental and luxury cars, the prosecutor said.
Correia's sentencing was scheduled for February 8th.
He was ordered Thursday to lose more than $ 43,000 in connection with the Fraud Guarantee fraud.
Correia and Parnas, along with two other men, were charged with conspiracy against the law banning political donations by foreigners in 2019.
When a substitute indictment was filed against all four men last month, FBI Assistant Director Bill Sweeney said of the Correia and Parnas charges, "We couldn't put it better – the conduct alleged today is, in fact, fraudulent – guaranteed. "
Parnas, Fruman, and the fourth co-defendant, Andrey Kukushkin, have all pleaded not guilty in the broader criminal case.
Giuliani, President Donald Trump's personal attorney, has not been prosecuted in the case.
It has been known since last year that Giuliani is being investigated by the Manhattan federal attorney's office, the office of which he once ran before he became New York City Mayor for two terms.
Giuliani received $ 500,000 in 2018 for work on the Fraud Guarantee, which he described as "a combination of business advice and advice in line with my company's operations and legal advice."
Parnas and Fruman had worked with Giuliani to gather harmful information about the Democratic presidential candidate, former Vice President Joe Biden, and his son Hunter Biden in connection with the younger Biden's board position at a Ukrainian natural gas company.
Giuliani has repeatedly raised allegations of misconduct by the Bidens in Ukraine and in connection with doing business in China in recent weeks. Joe Biden denies any wrongdoing.
Both Parnas and Fruman were summoned by the House of Representatives for testimony and documents last year as the House headed towards the charges against Trump.
The president, who was acquitted after a Senate trial, was charged with withholding Congress-approved military aid to Ukraine when he pressured that nation's government to investigate Hunter Biden and Joe Biden on the matter Time were a leading candidate for the Democratic President nomination.