A lawyer for Ukrainian oligarch Dmitry Firtash was the source of $1 million that was deposited into a family bank account of Lev Parnas, an associate of Rudy Giuliani, the U.S. said.
The revelation lays out a financial link between Firtash, who has been charged with conspiracy by the U.S. and is living in Vienna while he fights extradition to the U.S., and one of the people whose work with Giuliani is at the center of the U.S. impeachment inquiry of President Donald Trump.
U.S. prosecutors said previously that Parnas had failed to disclose that his wife received $1 million in September from a bank account in Russia. In federal court in Manhattan on Tuesday, Assistant U.S. Attorney Rebekah Donaleski disclosed the source of the money.
Even after a week of revelations in court filings about the $1 million transfer, the hearing raised more unanswered questions about the nature and purpose of the funds.
Donaleski said the wife, Svetlana Parnas, signed a contract on Sept. 9 to purchase a $4.5 million home in Boca Raton, Florida, for cash, with a closing date of Oct. 4. She made a $200,000 down payment. It was unclear where the remaining $4.3 million would come from. (The deal was ultimately abandoned, and the home was sold to another buyer, Donaleski said.)
Bail Argument
Finding the revelations about Parnas’s income insufficient to justify revoking his bail, U.S. District Judge J. Paul Oetken in Manhattan denied the U.S. request to jail him.
The bulk of the two-hour hearing was dominated by debates about the full extent of Parnas’s financial resources. Prosecutors said that he had the backing of a “foreign benefactor” — Firtash — who hoped to ensure Parnas’s silence, and that his shifting disclosures about his assets and income left the U.S. with no clear understanding of his finances.
In addition to not disclosing the $1 million payment, Donaleski said Parnas obfuscated $200,000 in income he received from a U.S. law firm representing Firtash and failed to disclose that he had recently put down a deposit on a $4.5 million home in Boca Raton, Florida.
“Mr. Firtash maintains that he has no knowledge about this transaction,” he said through a spokesman on Wednesday.
The defense has maintained that the $1 million payment was a loan. It was made in five tranches of $200,000 over the month of September, Oetken said, reading from a pile of documents that had been handed to him.
Swiss Lawyer
The Firtash lawyer who made the deposits is a Swiss national, Ralph Oswald Isenegger, according to Parnas’s lawyer, Joseph Bondy. It was a loan from Isenegger to Parnas’s wife, Bondy said.
Donaleski, the prosecutor, disputed that the money was a loan and said it was for Parnas. “Mr. Parnas bragged that the money was his, and spent the money as though it was his,” she said.
Isenegger has since tried to recall the loan after adverse publicity about it, emailing as recently as Monday that he wanted the proceeds returned, according to Bondy. He said that neither Firtash nor his U.S. lawyers continue to support Parnas. “I believe he has burned that bridge, to the extent there was a bridge,” Bondy said.
Parnas and a business partner, Igor Fruman, were arrested in October as they boarded a plane with one-way tickets to Europe.
For months beforehand, Parnas and Fruman worked with Giuliani to dig up dirt in Ukraine on Democratic presidential candidate Joe Biden and his family. Federal prosecutors in Manhattan are pursuing campaign-finance charges against the pair even as their work with Giuliani is also the subject of an impeachment vote in the House of Representatives scheduled for Wednesday.
U.S. Charges
Firtash, an industrialist with natural-gas interests, was arrested in Vienna on U.S. charges in March 2014, accused of corruption and racketeering conspiracy in a scheme to bribe Indian officials to secure titanium that would be sold to Boeing Co. The Justice Department has described him as an associate of “Russian organized crime.” He remains in Vienna and has denied all the charges.
Bloomberg News previously reported other financial arrangements involving Firtash. In July, he hired two lawyers who have been vocal supporters of Trump, Joe diGenova and Victoria Toensing, to fight the U.S. charges.
The husband-wife legal team billed Firtash about $1 million for their work, a person familiar with the situation said in October. That included costs for Parnas as a translator and important contact, the person said. Toensing has said her firm hired Parnas as a translator.
A spokesman for Firtash said in October that the Ukrainian had no contractual or other commercial relationship with Parnas or Fruman.
Prosecutors argued to Oetken, the judge, that Parnas was “an extraordinary risk of flight” from the U.S. before trial if not jailed.
Even as Firtash’s lawyer seeks the return of the loan, Bondy said there was less than $100,000 of it left, after payments for Parnas’s bail, the home down payment and other debts. He said Parnas has had to hire armed security guards to take his children to school, fearing threats from Igor Kolomoisky, an oligarch and backer of Ukraine’s president, Volodymyr Zelenskiy. Kolomoisky has previously accused Parnas and Fruman of asking him for money to make introductions to Giuliani and others.
Parnas and Fruman are accused of working on behalf of one or more Ukrainian government officials to seek the removal of Marie Yovanovitch as the U.S. ambassador to Ukraine. They have pleaded not guilty to those and other charges.
