NEW YORK — Two associates of President Donald Trump’s personal lawyer Rudy Giuliani entered not guilty pleas Wednesday to a federal indictment accusing them of funneling hundreds of thousands of dollars in foreign money into U.S. elections, including a pro-Trump super PAC.

The pleas came as the two men, Lev Parnas and Igor Fruman, made their first court appearance in Manhattan following their arrest earlier this month at Dulles Airport near Washington as they attempted to board a flight for Vienna.


During the hearing, one of Parnas’ lawyers appeared to warn prosecutors that the case could be a challenging one for them because of complex issues of attorney-client privilege and even executive privilege, since Parnas claims to have been working with Giuliani as he worked for Trump.

The criminal case has triggered intense speculation and scrutiny of Giuliani’s role in the business affairs of the pair, who purported to have investments in natural gas in Ukraine and were also eager to break into the newly-legalized cannabis trade in the U.S.

Photos have also surfaced of Parnas and Fruman with Trump, Giuliani and other U.S. politicians at fundraisers, parties and other events.

Giuliani has denied any wrongdoing and has not been charged in the case. However, investigators have reportedly been examining the former New York mayor’s financial ties to Parnas and Fruman.


In addition, at least one witness has publicly said he was interviewed by the FBI earlier this year as part of what appeared to be a counterintelligence probe of potential efforts by foreign actors to influence U.S. policy.

Giuliani insisted that efforts he made in cooperation with the two men to urge the recall of the U.S. ambassador to Ukraine and to jump start a long-dormant investigation that could impact Democratic presidential hopeful Joe Biden were not lobbying on behalf of the businessmen, but advocacy on behalf of Trump.

Prosecutors allege that Parnas and Fruman’s aggressive drive to oust the ambassador, Marie Yovanovitch, was mounted on behalf of at least one unnamed Ukrainian government official. The indictment also alleges that some of the donations the two men made were at the behest of an unnamed Russian businessman who wanted to start a U.S. marijuana business.

The two men rebuffed a request from the House Intelligence Committee for records sought in connection with the ongoing impeachment probe.


There have been no signs yet that Parnas and Fruman are seeking to cooperate with prosecutors, although lawyers tracking the case say prosecutors are likely to pressure the men to detail what Giuliani knew about the alleged foreign donation scheme, their ties to officials in Ukraine and their foreign funding.

While many photos of Parnas and Fruman show them clad in golf shirts, both men were in suits for Wednesday’s hearing. Each stood briefly as U.S. District Court Judge Paul Oetken asked them how they wished to plead.

“Not guilty, your Honor,” Parnas said forcefully, speaking with a heavy accent.

“Not guilty,” Fruman said a bit more quietly when the judge turned to him.

Assistant U.S. Attorney Rebekah Donaleski told Oetken that evidence in the case that will need to be turned over to the defense was “quite voluminous.” She mentioned about 50 bank accounts and more than a dozen cell phones that were monitored in some fashion, as well as search warrants and subpoenas.

“The investigation is ongoing. We’re continuing to obtain materials and discovery,” she said.

After scheduling and bail matters were squared away, Parnas’ attorney Ed MacMahon Jr. rose to tell the judge that there may be problems in the case involving prosecutors’ right to see some of the materials they’ve seized.

“There’s a lot of attorney-client privilege and executive privilege issues that are raised by the evidence,” MacMahon said. “The president was using Rudy Giuliani as his lawyer.”


Oetken asked if Parnas has worked for Giuliani or was a client of the former New York mayor.

“I believe maybe in both” capacities, MacMahon replied. “He was working for Mr. Giuliani and Mr. Giuliani was working for the president of the United States.”

MacMahon urged that prosecutors used a so-called “taint team” to filter out privileged information. He also said the Justice Department’s Office of Legal Counsel or the White House counsel’s office may have to get involved.

”I don’t know who’s looking at all of these emails and all of this info,” the defense attorney said. “I’m not telling you I know how to resolve this.”

Donaleski said it was the first time Parnas’ lawyers raised the privilege question with them, but she also seemed prepared for it. She said a “filter team” has been set up to handle such problems.

“We’re aware of the issue,” she said, asking the defense to provide more details on what information they might consider privileged. “We are attuned to those concerns.”

Oetken said he wasn’t going to wade into that question Wednesday but would get involved if needed. “If there’s a particular application you want to make, I’m all ears,” the judge said.

Following the hearing, a defense lawyer for Parnas complained to a phalanx of reporters and TV cameras about a flurry of leaks about the case.


“We look forward to defending Mr. Parnas in the court based upon the evidence and not a smear campaign driven by misleading and self-serving leaks apparently from the highest level of government,” defense attorney Joseph Bondy said.

Parnas also spoke to journalists briefly outside the courthouse, asserting his innocence.

“Many false things have been said about me and my family in the press,” Parnas said, reading from a written statement as his wife stood by. “I look forward to defending myself vigorously in court. I am certain that in time the truth will be revealed and I will be vindicated. In the end, I put my faith in God.”

Reporters peppered Parnas and his attorneys with questions about his role working with Giuliani, but the lawyers brushed those aside. MacMahon repeatedly told reporters to look at a letter attorney John Dowd sent to the House earlier this month explaining why Parnas and Fruman could not comply with a document request on the timeline lawmakers sought. The Virginia-based defense attorney declined to elaborate.

“I’ve already said enough,” MacMahon said.

Fruman left the courthouse without speaking to reporters. His attorney, Todd Blanche, did not weigh in publicly on the privilege issue raised by MacMahon.

In addition to Parnas and Fruman, the indictment charges two other men, Andrey Kukushkin and David Correia, with involvement in the scheme to use foreign money to gain approval for the marijuana business. All four defendants are American citizens. Parnas and Kukushkin were born in Ukraine. Fruman was born in Belarus. Correia was born in the U.S.

Kukushkin and Correia entered not guilty pleas at a hearing before Judge Paul Oetken last week. All four defendants are free on bail pending trial.


Parnas and Fruman face a maximum possible sentence of 35 years, while Kukushkin and Correia face up to five years in prison. Defendants are typically sentenced under federal guidelines that usually result in sentences well short of the maximum.

Oetken has scheduled another hearing in the case for Dec. 2 and said he’d like to set a trial date at that session, if possible.

