- David Correia, a business partner of Rudy Giuliani's former associate Lev Parnas, pleaded guilty to conspiracy and to making false statements to election officials about a donation made to a group that supported President Donald Trump.
- Correia admitted in Manhattan federal court Thursday that he conspired with Parnas to defraud investors in their would-be fraud protection business, which was called Fraud Guarantee.
- Giuliani, who is Trump's personal lawyer, reportedly received $500,000 to work on behalf of Fraud Guarantee.
David Correia, a business partner of Rudy Giuliani's former associate Lev Parnas, pleaded guilty Thursday to conspiracy and to making false statements to election officials about a donation made to a political action committee that supported President Donald Trump.
Correia, 45, admitted in Manhattan federal court that he conspired with Parnas to defraud investors in their would-be fraud protection business, which was called Fraud Guarantee. The plea hearing was conducted virtually over videoconference and phone lines because of the coronavirus pandemic.
Most of the money raised but not spent on that never-launched company went to Parnas, Correia's lawyer told a judge.
Correia told a judge that in October 2018 he falsely swore to the accuracy of the contents of a declaration made to the Federal Election Commission because he wanted the FEC to end an investigation that he said he "believed at the time was unwarranted."
Assistant U.S. Attorney Douglas Zolkind said that Correia had lied in his FEC affidavit by claiming that Global Energy Producers — a supposedly active company formed by Parnas and co-defendant Igor Fruman — had actually made a $350,000 donation in GEP's name to the Trump super PAC America First Action.
In fact, Zolkind said, GEP was not an operational business and did not even have a bank account.
Instead, the $350,000 came from a mortgage on property owned by Fruman and was transferred to an account controlled by Parnas, who then funded the donation to the PAC under GEP's name, according to the prosecutor.
Zolkind said that from 2012 through 2019, Correia and Parnas solicited investments from what eventually became seven people, who each contributed between $200,000 and $500,000 apiece, to fund Fraud Guarantee.
The company purportedly planned to offer insurance against fraud for investors in other ventures.
Fraud Guarantee never became operational, but Correia and Parnas "told the victims that this money was used exclusively for legitimate business," the prosecutor said.
"This was false," Zolkind said.
Instead of being used to launch and operate the business, the majority of the investor funds were withdrawn as cash, and sent to personal accounts. Some of that money was used for personal expenses such as for Parnas' rent and luxury cars, the prosecutor said.
Correia's sentencing was scheduled for Feb. 8.
He was ordered Thursday to forfeit more than $43,000 in connection with the Fraud Guarantee swindle.
Last month, when a superseding indictment was filed against all four men, FBI Assistant Director Bill Sweeney said of the charges against Correia and Parnas, "We couldn't say it better ourselves – the behavior alleged today is indeed fraudulent – guaranteed."
Parnas, Fruman and the fourth co-defendant, Andrey Kukushkin, have all pleaded not guilty in the broader criminal case.
Giuliani, who is Trump's personal lawyer, was not criminally charged in the case.
But as of last year, Giuliani was known to be under investigation by federal prosecutors in Manhattan, whose office he once headed before he became New York mayor for two terms.
Giuliani received $500,000 in 2018 for work for Fraud Guarantee, which he has described as "a combination of business advice and consulting, consistent with what my company does, and legal advice."
Parnas and Fruman had worked with Giuliani on an effort to collect damaging information about the Democratic presidential nominee, former Vice President Joe Biden, and about his son Hunter Biden, in connection with the younger Biden's board position at a Ukrainian natural gas company.
Giuliani in recent weeks has made repeated allegations of wrongdoing by the Bidens in Ukraine and in connection with business in China. Joe Biden denies any wrongdoing.
Both Parnas and Fruman were subpoenaed last year by the House of Representatives for testimony and documents as the House moved toward impeaching Trump.
The president, who was acquitted after a Senate trial, was impeached for withholding congressionally approved military aid to Ukraine as he pressured that nation's government to investigate Hunter Biden and Joe Biden, who at the time was a leading contender for the Democratic presidential nomination.