Two businessmen from the former Soviet Union have been arrested for allegedly breaking U.S. campaign finance laws.
The Manhattan U.S. Attorney's office said on October 10 that Ukrainian-born Lev Parnas and Belarus-born Igor Fruman, who are associated with Rudy Giuliani, the Republican president’s personal lawyer, were apprehended at Dulles International Airport outside Washington the previous day.
The four-count indictment unsealed in New York includes charges of conspiracy, making false statements to the Federal Election Commission (FEC), and falsification of records
In particular, the two suspects allegedly conspired to "funnel foreign money to candidates for federal and state office."
Reuters quoted John Dowd, a lawyer for both men, as declining to comment on the charges.
Prosecutors said the two men were arrested at Dulles carrying one-way tickets to Vienna and connections to another undisclosed location.
Prosecutors stated that the two men were flight risks, and Federal Magistrate Judge Michael Nachmanoff set a strict set of conditions that Parnas and Fruman must satisfy to be released ahead of any trial. Each must post a $1 million bond and be placed on GPS monitoring in home detention.
Trump later said he did not know the men and that “we have nothing to do with” the matter, although photos from Parnas' social media accounts show him meeting several times with Trump, his son Donald Trump Jr., and others.
The indictment alleges that Parnas and Fruman concealed the source of the donations by "laundering foreign money through bank accounts in the names" of companies and via "straw contributors" rather than in the name of the true source of funds.
Their financing efforts were intended to allegedly "advance their personal financial interests and the political interests of at least one Ukrainian government official with whom they were working."
In 2018 the two suspects made donations of at least $576,000 to various campaigns of Republicans, according to an investigation by the Organized Crime and Corruption Reporting Project (OCCRP).
The bulk of the sum -- $325,000 -- went on May 17, 2018, to America First Action -- one of the largest pro-Trump Super Political Action Committees, OCCRP reported.
The Campaign Legal Center, a transparency advocacy group, flagged the donation and filed a complaint in July 2018 with the Federal Election Commission, calling on it to investigate whether Parnas and Fruman had violated campaign-finance laws.
Fruman and Parnas furthermore helped raise funds for an unnamed “Congressman-1" whose assistance they sought to allegedly "remove or recall" then-U.S. Ambassador to Ukraine Marie Yovanovitch, the indictment read.
She was abruptly recalled to Washington in May several months before her three-year tenure was supposed to expire. According to a government whistle-blower’s account, which prompted a congressional impeachment inquiry of Trump, Yovanovitch was unfavorable to Giuliani and to former Ukrainian prosecutor Yuriy Lutsenko.
Reporting by OCCRP alleges that the congressman whom Parnas and Fruman had approached in May was former Congressman Pete Sessions, a Texas Republican.
After their meeting, Sessions wrote a private letter to Secretary of State Mike Pompeo calling for Yovanovitch’s dismissal.
Sessions acknowledged to OCCRP that he had written the letter and met the two suspects, but couldn’t remember when or where the discussion took place.
"I do know both these gentlemen [Fruman and Parnas]," Sessions told OCCRP. "They are Republicans. They are people who have an interest in foreign affairs. They have a strong interest in America not backing away from Ukraine."
The Wall Street Journal reported that both men were to appear in federal court in Alexandria, Virginia, later on October 10.
The two men are said to have introduced Giuliani to high-level Ukrainian politicians.
The arrests come as Trump faces an impeachment inquiry by the Democrat-led House of Representatives, sparked by a July phone call between the U.S. president and his Ukrainian counterpart, Volodymyr Zelenskiy.
In the call, Trump appears to urge Zelenskiy several times to launch an investigation into his Democrat rival, former Vice President Joe Biden and his son, Hunter, who worked for a Ukrainian energy company.
Hours after their arrest, House Democrats subpoenaed Parnas and Fruman to provide documents they have so far refused to provide. The panels have also subpoenaed Giuliani.