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Federal Prosecutors Guarantee Lev Parnas and Co-Conspirators More Fraud Charges

Rudy Giuliani’s former business associates have received some more bad news: actions related to the company “Fraud Guarantee” has guaranteed them more fraud charges. Federal prosecutors in the recently castigated Southern District of New York said that a grand jury returned a superseding indictment on Thursday, tacking on additional charges against Lev Parnas, Igor Fruman, David Correia, and Andrey Kukushkin.

Ukraine-connected Parnas and Fruman were initially charged with two counts of conspiracy, one count of making false statements, and one count of falsification of records. The charges stemmed from alleged campaign finance violations—or, as prosecutors put it, a “Straw Donor Scheme” in support of various Republican election campaigns. Correia and Kukushkin had been facing a lone conspiracy charge, but the charging status of each defendant has changed.

Parnas and Correia, the co-founders of Fraud Guarantee, were hit with wire fraud charges “based on conduct not previously charged in the original indictment,” prosecutors said. The superseding indictment added a seventh count charging Parnas and Correia with “conspiracy to defraud multiple victims by inducing them to invest in their company, ‘Fraud Guarantee,’ based on materially false and misleading representations, in violation of 18 U.S.C. § 1349.”

Correia was also charged for alleged false statements and falsifications records, as Parnas and Fruman were, in order to “obstruct the administration of a matter within the jurisdiction of the Federal Election Commission.” In addition, Correia, Fruman, and Parnas were charged for soliciting a foreign national to contribute to U.S. elections.

Nor did Kukushkin, a Ukrainian businessman and aspiring cannabis mogul, escape unscathed. Kukushkin, Parnas, and Fruman were charged for “aiding and abetting the making of donations and contributions by a foreign national in connection with federal and state elections.”

Fraud Guarantee, a fraud-insurance company Parnas created in 2013, was a way to escape a checkered past, the Wall Street Journal reported in Oct. 2019. Parnas had been accused of fraud in 2011 and, in an attempt to clean up Google search results associated with his name, started a company with fraud in its name. He made it the mission statement of the business to fight fraud and prevent people from falling victim to it. According to WSJ, it happened in a park one day, and it worked:

Messrs. Parnas and Correia set up Fraud Guarantee in a Boca Raton office park. Mr. Parnas picked the name in part to clean up his Google search results, ensuring that the word “fraud” and his own name would be paired in a positive light, said people familiar with the matter.

Some associates questioned the name, but it worked: Negative search results about the bridge loan and Edgetech soon dropped in Google’s rankings, one of the people said.

Fraud Guarantee’s “origin story” was also notable. According to the Journal, Parnas and Correia told potential investors that they were victims of fraud and were inspired to help others avoid the same fate. “We were victims ourselves and realized there is truly no recourse for having been defrauded,” Correia reportedly wrote in a 2015 email to a potential investor.

The defendants pleaded not guilty to the original charges.

Read the letter here.

[Image via Stephanie Keith/Getty Images]

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Matt Naham is managing editor of Law&Crime. He formerly worked as news editor and weekend editor at Rare.