New York (CNN)Federal prosecutors are weighing new charges against associates of Rudy Giuliani in connection with a company that paid him $500,000, according to people familiar with the investigation.
Prosecutors with the US attorney’s office for the Southern District of New York are considering whether to charge Giuliani associate Lev Parnas and at least one of his business partners with misleading potential investors for Fraud Guarantee, the Florida-based company that paid Giuliani, President Donald Trump’s personal attorney, these people say. Parnas co-founded Fraud Guarantee with the idea of providing insurance to companies to protect against fraud.
The scrutiny of Fraud Guarantee brings the investigation closer to Giuliani, Trump’s vocal defender, and raises questions about what role the former mayor played, if any, in the marketing of the company. A lawyer for Giuliani said his client never had any conversations about investor pitches or marketing with Parnas or his business partner David Correia.
Federal prosecutors in Manhattan for months have been investigating Giuliani’s actions, including his efforts to oust Marie Yovanovitch, then-US ambassador to Ukraine, and push for an investigation into the son of Trump’s political rival Joe Biden. Giuliani has not been accused of wrongdoing. Yovanovitch was recalled early from her position in April 2019.
In the case of Fraud Guarantee, investigators have focused on the marketing pitch, specifically examining whether the men duped investors about the value of the company and how they intended to use the proceeds, the people familiar with the investigation say.
FBI agents and prosecutors interviewed investors who were pitched on the company, and through subpoenas have obtained text messages and other documents related to the effort. One person with knowledge of the company has said the men spent proceeds from investors on pricey personal expenses.
The new charges, if they are brought, would significantly increase the legal pressure on Parnas and Correia. Those men, plus Igor Fruman, another Parnas business associate, and Andrey Kukushkin, an associate in a marijuana venture, have been charged by Manhattan federal prosecutors with campaign finance violations relating to donations they made to US candidates. All four have pleaded not guilty.
The timing of any additional charges is not clear. Prosecutors have said in court that new charges in the case against Parnas and the other defendants are likely, but they have not specified which charges or when they might be filed. The case is scheduled to go to trial in early October, which would mean testimony involving Trump’s circle could emerge in the final weeks of the 2020 presidential election campaign.
“We have taken into account prosecutors’ statements that they might bring additional charges against Mr. Parnas and others since the inception of this case. We are therefore not surprised, and remain prepared to defend Mr. Parnas against any such charges,” said Joseph Bondy, a lawyer for Parnas.
A spokesman for the US attorney’s office in Manhattan and lawyers for Correia and Fruman declined to comment.
The $500,000 payment to Giuliani for work with Fraud Guarantee came just as Parnas and Fruman began helping Giuliani arrange meetings in Ukraine to dig up dirt on Biden, now a Democratic presidential candidate, and press the newly elected president of Ukraine to announce an investigation into Joe Biden and his son Hunter.
Trump’s attempts to pressure Ukraine to investigate the Bidens were at the center of the President’s impeachment trial. Trump and his allies have repeatedly made unfounded and false claims to allege th