In the summer of 2018, two Soviet-born businessmen who’ve served as middlemen between top Kyiv officials and President Donald Trump’s personal attorney Rudy Giuliani made a six-figure contribution to a leading pro-Trump political group.
Since then, the two businessmen, Lev Parnas and Igor Fruman, have been thrust into the middle of a national scandal that has congressional Democrats on the verge of attempting to impeach the president. But the sources of the money they’ve used to buoy Trump’s political operation remain largely a mystery.
In July, Parnas told BuzzFeed for its joint investigation with the Organized Crime and Corruption Reporting Project (OCCRP) that the company he and Fruman used to make the contribution—which did so in the name of a wholly different company—had drawn the funds used for the donation just days earlier from a real estate transaction.
So PAY DIRT decided to look into their real estate deals, and the investigation led us down a rabbit hole of financial transactions that ended this year with a faceless LLC’s purchase of a multimillion-dollar Miami condo and began five years earlier in a Manhattan restaurant run, in part, by a man recently indicted for his alleged involvement in a $99 million pharmaceutical scam.
Strap in and take notes, because you’re coming down the rabbit hole too.
Let’s start with the basics. Parnas and Fruman are Giuliani clients. In that capacity, they’ve managed to make introductions between Giuliani and Ukrainian officials including Victor Shokin. Shokin is the former prosecutor who Giuliani and Trump say was fired under pressure from then Vice President Joe Biden—in an effort, they dubiously claim, to protect his son Hunter from an investigation into an energy company on whose board the younger Biden served.
As they worked with Giuliani to uncover ostensible Biden-related corruption in Ukraine, Parnas and Fruman were also running Global Energy Producers, a company that hopes to capitalize on Trump administration plans to open up European energy markets to U.S. natural gas exports. According to one former GEP investor, Russian energy executive Felix Vulis, the pair bragged that their extensive connections to Giuliani and other Trumpworld luminaries, and their high-dollar donations to Republican political outfits, would guarantee them a Trump-enabled windfall. (GEP’s attorney has denied that they made such claims. A lawsuit filed by Vulix against the company was settled under undisclosed terms last month.)
The largest of those donations was a $325,000 contribution last year to America First Action, the Trump campaign’s official “independent” political group. But that donation didn’t actually come from GEP. According to financial records released in federal court, where Parnas is being sued by a jilted former business partner, it was an entirely different company called Aaron Investments I, LLC, that ponied up the money. The misreporting of the actual donor has led the Campaign Legal Center, a nonprofit ethics watchdog, to allege a potential violation of campaign finance laws.
Those financial records also provided some insight into the source of money used to make that contribution. Two days before Aaron Investments cut the check to America First, it reported receiving a $1.2 million wire transfer from Russell Jacobs, a Florida real estate attorney who specializes in compliance with international money laundering laws.
Parnas told BuzzFeed in July that the money came from the sale of a Florida condominium. That was more detail than had ever been revealed about the source of the donation. So PAY DIRT dove into Florida records to see what we could find on real estate transactions around that time involving Parnas or Fruman.
Sure enough, five days before the wire transfer from Jacobs, a company called Seafront Properties LLC—a company managed by Igor Fruman’s brother Steven and for which Igor serves as a registered agent—reported a major transaction involving a Miami condo. On May 10, 2018, Seafront, which lists the same New York address in corporate records as Fruman does on FEC filings, reported paying off a $1.5 million mortgage on a tony Miami condo with stunning oceanfront views.
The entity that had lent that money back in 2014 wasn’t a bank. It was a New Jersey company called Grelex LLC. That company is run by Alex Fleyschmakher, a man who just last week was indicted by federal prosecutors on a kickback conspiracy charge for his alleged role in a scheme to bribe doctors who steered patients to a pharmacy with which he was financially involved.
Public records indicate that Steven Fruman had been in business with Fleyschmakher for some time. Both men, as well as Grelex, are listed as principals on a New York liquor license application filed in 2014 for a Manhattan Italian joint called Mamo Restaurant.
Five days after paying off Grelex, on the same day that Aaron Investments received its cash infusion from Jacobs, Seafront reported taking out a new $3 million loan on the same condo. Once again, the money came not from a bank but from three individual lenders. Just over a year later, Seafront paid off that mortgage in full. That transaction, like the repayment of the Grelex loan, listed a lawyer at Jacobs’ firm as the attorney of record.
That’s where the trail goes cold. FVV23’s only listed officer is a Florida accountant. It had existed for less than two months when it bought the condo from Seafront.
The half-dozen or so of you who are still with us may be wondering what this has to do with Giuliani and the recent rush to Trump’s impeachment. Well, there are no direct connections. But it does give us a rather jarring insight into the global cast of characters seeking to work with Trump and capitalize off his presidency.
Igor Fruman’s background is instructive. He’s one of his country’s richest men and runs a handful of businesses with interests in the country’s agriculture, dairy, and luxury goods sectors. He’s extensively politically connected in his native Odessa and, according to BuzzFeed and OCCRP, has some notable connections to prominent figures in the city’s notorious criminal underworld.
The degree to which he and Parnas allegedly pitched GEP investors on their Trumpworld pull harks back to the sort of political favoritism and corruption that pervades the former Soviet bloc, where connections to those in power are frequently a business’s most critical asset.
We can’t say with any certainty that the trail of real estate transactions described above was related to the America First contribution. It’s also not clear that Parnas’ and Fruman’s political contributions have produced much in the way of business for GEP; they are far from achieving their self-declared goal, according to their former investor, of becoming America’s largest natural gas exporter.
What is clear is that as Giuliani, Trump, and their allies have exported American political spats to Ukraine, so too have the Ukrainians involved added a tinge of their own politics to Washington.