Rudy Giuliani — How An Expanded SDNY FARA Investigation Could Be a Nightmare
Remember the multiple Manafort superseding indictments? President Trump’s former campaign consigliere was reportedly initially being investigated for FARA violations with regard to his dealings in Ukraine and he ended up being indicted for Tax Fraud, Bank Fraud, Money Laundering and FBAR violations in addition to FARA fraud, pursuant to a task force investigation as the federal government attempted to compel his cooperation.
Rudy Giuliani is reportedly being investigated by the U.S. Attorney’s office in the Southern District of New York(SDNY) for Foreign Agents Registration Act(FARA) violations relative to his dealings in Ukraine. Could it be deja vu all over again as Yogi Berra used to say, in terms of how this FARA investigation could end up with multiple financial fraud counts in a Giuliani indictment?
How would that work?
Rudy has complained recently that he was being treated like he was the head of a drug cartel. He isn’t. He wasn’t. But should he be? Drug cartel leaders are often investigated by a task force — in many instances by the Organized Crime Drug Enforcement Task Force(OCDEFT). A multi-agency task force maximizes and coordinates investigative resources, expertise, and agency-aligned Federal statutes to apply when appropriate. Such task force approaches are not limited to Cartel heads as Paul Manafort can testify.
Grand Jury investigations expand as the evidence accumulates and ushers down different paths. A key question the current GJ investigation should be probing — Has Mr. Giuliani received compensation for his foreign dealings in Ukraine? Should evidence exist of Mr. Giuliani’s receipt of income from Ukrainian officials related to his fishing for Hunter Biden corruption evidence, then Rudy would have a lot of explaining to do regarding his lack of FARA registration.
SDNY may well be interested in whether Mr. Giuliani has demonstrated past shady patterns in regard to receipt of foreign income from other overseas ventures such as Romania, Africa, South America, or Kazakhstan, where he maintained law offices for several years. Some questions investigators might delve into would be: just how and where did Rudy bank his foreign-sourced income? Did he make use of any shell companies regarding this income or did he route this income through third parties?
Expanding the current ongoing Grand Jury investigation of Lev Parnas and Igor Fruman to include the financial investigative assistance of the IRS Criminal Investigation(IRS-CI), the Financial Crimes Enforcement Network(FinCEN), and the Small Business Agency(SBA) to unite investigative expertise and statutory tools with the FBI, would represent one time-honored pathway to such a task force approach. A further consideration for SDNY — adding subjects for investigation to include individuals, businesses, and shell companies associated with Rudy Giuliani described and identified for potential inclusion as follows.
Fraud Guarantee — a company honchoed by Lev Parnas agreed to pay Rudy Giuliani $500K for his advice. But Mr. Parnas did not have the money so he persuaded a Long Island-based personal injury attorney Charles Gucciardo to front the money. Gucciardo paid Mr. Giuliani $250K in September 2018, and another $250K the following month on behalf of Fraud Guarantee. Randy Zelin, an attorney for Mr. Gucciardo, advised the New York Times that Mr. Gucciardo made the payments to Giuliani through an LLC controlled by Rudy called Giuliani Partners. The $500K payment was structured as a loan convertible to capital and the loan was tailored to be repayable in full in 2020.
By January 2019, Rudy had enlisted Parnas and Fruman to collect information and to make connections in Ukraine that could be used to damage Joseph R Biden the Democratic presidential contender, and to undermine the Special Counsel’s investigation into Russian interference in the 2016 election.
The potential sham transaction regarding the shady $500K compensation funneled to Rudy Giuliani via an attorney conduit, through an LLC into what appears to be a shell company(Fraud Guarantee) which has no clients in a funky loan repayable in 2020 that could be converted into an investment deal — raises a host of questions that a potential financial investigation might answer:
Did Rudy repay the loan in 2020
If not, was the loan forgiven, and did Rudy pay taxes on the forgiveness of the debt
Who was the original source of the $500K and was this source foreign based
Did Mr. Gucciardo act as a conduit in funneling this compensation to Rudy
If there were other investors in Fraud Guarantee who are they
Did Fraud Guarantee in fact quickly go belly up, thereby confirming its apparent shell company status
Could IRS or FinCEN investigators shed light on this murky deal
Would bank subpoenas to accounts styled in the name of Fraud Guarantee, Giuliani Partners, and Charles Gucciardo facilitate a financial investigation and answer these questions?
It should be noted that Giuliani Partners which was alleged to have first received the $500K from Mr. Gucciardo on behalf of Lev Parnas to be infused into Fraud Guarantee — was registered in New York along with Giuliani Safety & Security. Tangential to these business recordings, it is noted that an S corporation named WorldCapital Payroll Corp. was incorporated in Delaware on January 8, 2002 — the same day Giuliani Partners registered in New York. Rudy Giuliani is listed as the President of WorldCapital Payroll.
Rudy has created a number of companies over the years in addition to those referenced above:
Giuliani Analytica, Giuliani Media, Giuliani Communications, and Rudolph Giuliani PLLC are noted here. Tangentially, it is further noted that Rudy was employed at various times by the massive law firm Greenberg Traurig wherein Rudy was special, or senior advisor to the Chairman before he was dumped for publicly noting his law firm(Greenberg Traurig) utilized similar funky tactics as Michael Cohen when dealing with sensitive hush-money payments that needed — as Rudy put it — to go through attorney accounts.
Rudy was Global Chairman of Greenberg’s cybersecurity and crisis management practice and acknowledged that he housed his own ventures — Giuliani Partners & Giuliani Safety and Security — within Greenberg’s offices. According to a Rollcall article, all through his time with the law firms Bracewell, which maintained an office in Kazakhstan, and then with Greenberg, Giuliani maintained both those two separate businesses.
CNN provides a useful timeline as a handy reference to track Rudy Giuliani’s work history here.
Can we make the rebuttable presumption that Rudy was aware of the offshore shell companies and bank accounts maintained by Greenberg Traurig as evidenced by the ICIJ Offshore leaks database?
Wouldn’t SDNY want to know whether Rudy has ever made use of offshore shell companies and/or foreign bank accounts in the past, either personally or through one of his companies, thereby establishing a predisposition to conceal financial transactions and possible compensation from the eyes of the government — in a fashion similar to Paul Manafort? If so, has he ever neglected to make the necessary reports to FinCEN and IRS with regard to overseas financial transactions — you know, in a manner similar to his neglect to file FARA?
What about Rudy’s relationship with the shadowy company TriGlobal Strategic Ventures(TGSV)? The website of this shady firm that claimed to have forged business contacts for Giuliani in Ukraine and Russia for more than a decade — suddenly vanished after Rudy’s communications were subpoenaed. Other media reports reflect the intentions of TGSV to engage in future ventures with Mr. Giuliani. Forensic News reported that Vitaly Pruss, the chief honcho of TGSV, claims an association with the head of Burisma — Mykola Zlochevsky as well as Parnas and Fruman. Further, a past board member of TGSV, a mysterious rich Russian by the name Ara Abramhan aka Abramyan, has allegedly received multiple honors from Vladimir Putin while being neighbors in an upscale neighborhood with Rosneft CEO and past Putin chief of staff Igor Sechin. TGSV claims to maintain offices in New York, Moscow, Kiev, and Zurich, Switzerland. Did any financial transactions go down between anyone associated with TGSV and Rudy Giuliani? If so, what were they for and how were they processed?
Or was Rudy content to run payments funneled to him through his various domestic shell companies? Did Rudy, in fact, run the $500K received from the Attorney, Charles Gucciardo through any other companies besides Giuliani Partners? How about WorldCapital Payroll Corp?
Independent investigative journalist — the wondrous Wendy Siegelman — first reported that WorldCapital Payroll Corp., located on Park Ave. in NY received a payroll protection plan payment(PPP) from the SBA through Trump-related Signature Bank of $209,117 on April 28, 2020. WorldCapital self-identified its business as ‘foreign business-related.’ To be fair, many would say that any business located outside of the state of New York would qualify as ‘foreign.’
Roger Sollenberger wrote an article in Salon wherein he referred to WorldCapital as a ghost company and questioned whether it had any of its own employees or was entitled to the PPP loan. Siegelman seems to think that a deep dive into the PPP database and SBA sources could eventually demonstrate that WorldCapital did in fact have as many as 11 employees that rebut the ghost company theory but still leaves many questions with regard to this loan that needs to be pursued.
Given Rudy Giuliani’s demonstrated cavalier attitude towards financial transactions and his questionable dealings with foreign officials and oligarchs — further financial investigation of WorldCapital Payroll could be warranted.
Rudy just had his law license suspended in New York for making false statements in court so his credibility is questionable. Should Rudy Giuliani have made any misrepresentations on his PPP loan application to Signature Bank or SBA, then Federal Bank and/or Mail fraud charges may be a consideration for SDNY.
An expansion of the current SDNY Grand Jury investigation of Giuliani acolytes Lev Parnas and Igor Fruman, to include FinCEN, IRS, and SBA for the purpose of conducting a financial investigation into each of the individuals and businesses highlighted above is believed to be justified. FinCEN databases could be scrutinized for SARs, FBARs, Wire Transfers, et al, in a fashion similar to Paul Manafort which succeeded in unearthing shell companies in Belize and undisclosed bank accounts in Cyprus.
Tax returns and bank account transactions for each of the above Giuliani referenced businesses need to be analyzed by financial investigators to determine if any foreign-sourced compensation was directed to Rudy Giuliani — either directly or indirectly. Evidence of such compensation might complement the current FARA investigation of Giuliani, reveal further foreign sources of compensation, and/or support consideration of financial fraud charges as Tax fraud, Bank fraud, Money laundering, and Klein Conspiracy to impede or impair the functions of Federal government agencies.
In a nutshell — adding a financial investigative dimension to the current FARA query by following the money — could potentially transform an investigation into an indictment, or possibly superseding indictments — Not like a Drug cartel capo but ala Paul Manafort — the pardoned but humbled Federal felon.
Yogi Berra would certainly remind everyone with regard to Rudy’s presumption of innocence. And he might supply SDNY in regard to a prospective expanded investigation with some insightful advice — “when you come to a fork in the road — take it.” And as for Rudy Giuliani’s future — “the future isn’t what it used to be.”
Sounds like a nightmare!
Martin J. Sheil
Photo by Pavel Churiumov — One Ukrainian Kopek