Lev Parnas, a businessman and associate of Rudolph W. Giuliani. He helped bring a Long Island lawyer into a deal with Mr. Giuliani.Credit…Scott McIntyre for The New York Times
WASHINGTON — It has been one of the enduring mysteries of the impeachment drama: Where did a cash-strapped Ukrainian-born American businessman get $500,000 to pay President Trump’s personal lawyer, Rudolph W. Giuliani?
It turns out that the money came from a Long Island lawyer named Charles Gucciardo, a Republican donor and supporter of Mr. Trump. The payment was part of a deal in which Mr. Gucciardo would become an investor in a company started by the businessman, Lev Parnas, according to Mr. Giuliani, Mr. Gucciardo’s lawyer and other people familiar with the arrangement.
The money, paid to Mr. Giuliani’s firm in September and October 2018, cemented a relationship between Mr. Parnas and Mr. Giuliani. Within months that relationship would evolve into a critical front in the campaign by the president and Mr. Giuliani to pressure the Ukrainian government to start investigations that would benefit Mr. Trump politically.
Mr. Gucciardo, 62, a plaintiff’s lawyer, has not been implicated in any wrongdoing, and there is no evidence that he was involved in the Ukrainian pressure campaign.
Mr. Gucciardo’s lawyer, Randy Zelin, said Mr. Gucciardo invested in the company because of Mr. Giuliani’s involvement.
“He understood that he was investing in a reputable company that Rudolph Giuliani was going to be the spokesman and the face of,” Mr. Zelin said, comparing Mr. Giuliani’s role to the one he had played for the personal data-security company LifeLock, which ran commercials featuring Mr. Giuliani. “When you think of cybersecurity, you think of Rudolph Giuliani,” Mr. Zelin said.
The company being promoted by Mr. Parnas, Fraud Guarantee, was billed as a way for investors to get insurance against the risk of being defrauded. Mr. Gucciardo’s money was a loan that could be converted into a stake in the company, according to people familiar with the deal.
But it is not clear the stake would have any value, since Fraud Guarantee does not appear to have any customers. Mr. Giuliani did not make any commercials for the company or otherwise engage in any public marketing for it. Mr. Parnas, who was arrested last month on federal campaign finance charges, has opened talks with congressional impeachment investigators about his role in the Ukraine pressure campaign.
The disclosure that Mr. Gucciardo provided the money that put Mr. Giuliani in business with Mr. Parnas fills in some blanks in a story that has left Mr. Giuliani under federal investigation for possible foreign lobbying violations, and Mr. Trump facing the likelihood of impeachment by the House.
The payment is another example of how Mr. Giuliani, a former federal prosecutor and New York mayor who is facing the prospect of a potentially costly divorce, capitalized on the spike in demand for his services after he signed on as Mr. Trump’s personal lawyer in April 2018.
And it helps explain how Mr. Parnas came to suggest that he and another Soviet-born South Florida businessman, Igor Fruman, had the blessing of a lawyer for the president of the United States as they pursued business and political ventures around the world, including in Ukraine.
In an interview, Mr. Giuliani called the arrangement a “perfectly legitimate payment” for which Mr. Gucciardo received “promissory notes that were convertible into a percentage of the company.”
Mr. Giuliani said he “verified the stock agreement” and “felt comfortable getting it from somebody as reputable as him,” adding that, after the payments, “I’ve gotten to know Charles very well. He’s a very honorable man, a very good man.”
Mr. Zelin said Mr. Gucciardo did not pay Mr. Giuliani personally, but rather made his investment by paying one of Mr. Giuliani’s consulting firms, Giuliani Partners. Mr. Gucciardo was “simply one of numerous other investors in the company and is nothing more than a passive investor,” Mr. Zelin said.
Mr. Parnas and his co-founder in Fraud Guarantee, David Correia, as well as Mr. Fruman and another associate, Andrey Kukushkin, were arrested last month on campaign finance charges that included accusations that Mr. Parnas and Mr. Fruman made illegal donations to a member of Congress allied with them in efforts to remove the United States ambassador to Ukraine.
In an interview last month before he was arrested, Mr. Parnas said Mr. Giuliani “offered some advice on” Fraud Guarantee. He said his efforts to help Mr. Trump in Ukraine were self-funded and “have nothing to do with our business.”
Joseph A. Bondy, a lawyer for Mr. Parnas, declined to comment, as did a lawyer for Mr. Correia, Jeff Marcus.
In 2016, Mr. Gucciardo donated $2,000 to Mr. Trump’s campaign and the Republican National Committee, and spoke at an event that appears to have taken place at the Trump International Hotel in Washington.
In the speech he accused Mr. Trump’s Democratic opponent, Hillary Clinton, of “perpetrating a fraud on the American people,” while saying Mr. Trump had “made more people, more workers, more money than anybody on Capitol Hill here.”
In 2018, he made his biggest donation on record to date — $50,000 to the pro-Trump super PAC America First Action — and attended an event for major donors at the Trump hotel featuring appearances by the president and Donald Trump Jr.
It was there that he met Mr. Parnas and Mr. Fruman, who had recently co-founded a company called Global Energy Producers that donated $325,000 to the PAC.
The next month, Mr. Parnas, Mr. Fruman and Mr. Gucciardo all went on a group trip to Israel, according to people who traveled with them.
“Those two guys were operators and they were definitely trying to rope people into their game, whatever their game was,” said Anthony Scaramucci, who was briefly the White House communications director for Mr. Trump and who was on the Israel trip. He said Mr. Fruman and Mr. Parnas often cited their connections in Mr. Trump’s orbit, and particularly to Mr. Giuliani.
Around the time Mr. Parnas returned from the trip, he promised to pay Mr. Giuliani $500,000 to provide what Mr. Giuliani described as “a combination of business advice and consulting, consistent with what my company does, and legal advice.”
But Mr. Parnas, whose business ventures had left him with a trail of debts and lawsuits, did not have the cash and feared that if he did not come up with it, he and Mr. Fruman might lose their access to Mr. Giuliani, according to people who know the men.
In September 2018, Mr. Gucciardo stepped in, paying Mr. Giuliani $250,000 on behalf of Fraud Guarantee, according to people familiar with the arrangement. Mr. Gucciardo paid the second $250,000 the next month, not long after he saw Mr. Giuliani and Mr. Parnas in Boca Raton, Fla., at a bris ceremony for Mr. Parnas’s son, for whom Mr. Giuliani had agreed to serve as the godfather.
By January, Mr. Giuliani had enlisted Mr. Parnas and Mr. Fruman to collect information and make connections in Ukraine that could be used to damage Joseph R. Biden Jr., the Democratic presidential contender, and to undermine the special counsel’s investigation into Russian interference in the 2016 election.
Kenneth P. Vogel reported from Washington, and Ben Protess and Sarah Maslin Nir from New York. William K. Rashbaum and Michael Rothfeld contributed reporting from New York.
Ben Protess covers the Trump administration, including its overhaul of Obama-era regulations and potential conflicts of interest arising out of the president’s personal business dealings. He previously covered white-collar crime, Wall Street lobbying and the private equity industry. @benprotess
Sarah Maslin Nir covers breaking news for the Metro section. She was a Pulitzer Prize finalist for her series “Unvarnished,” an investigation into New York City’s nail salon industry that documented the exploitative labor practices and health issues manicurists face. @SarahMaslinNir