The other defendants, Lev Parnas, Igor Fruman and Andrew Kukushkin have pleaded not guilty. A trial was set to open in March but was indefinitely postponed due to Covid-19 concerns.
Giuliani has not been charged in the case. However, in a court filing last week related to Correia’s sentencing, prosecutors describe how a prominent lawyer featured in the pitch Correia and Parnas made to bring in money for their venture, known as “Fraud Guarantee.”
“To seal the deal with Victim-7, Correia texted Parnas the next day that ‘all is good’ with Victim-7 and the ‘only contingency he had was that he was asking that Attorney-1 jump on the phone with him to welcome him aboard so he knows he’s really a part of it,’” prosecutors wrote.
Prosecutors say the victim investor remained jittery.
“Just please confirm here that [Attorney-1] is a partner on this and be in it for the long haul with all of us,” the unnamed investor wrote, according to prosecutors.
Correia replied: “He is absolutely on board and part of the company. He, via [his consulting firm] will be with us and help with compliance and regulatory issues, advertising and marketing, and several other deliverables. He has also agreed that we can use his likeness to be the ‘face of the company’ (should we choose) for commercials, advertisements, etc. He personally will also engage in sales/business development . . . . Simply put, we will have full access to his entire team. Extremely broad list of things he has agreed to do. The relationship is very strong and we are doing business with him in other capacities as well.”
Prosecutors say that prompted this reply from the would-be investor: “Ok. I’m in.”
The public filings do not name Giuliani but details in the prosecution filing align with press reports about payments totaling $500,000 that a Long Island personal injury lawyer, Charles Gucciardo, wired to Giuliani Associates in September and October 2018.
Assistant U.S. Attorney Nicolas Roos pointed to the same exchanges about the $500,000 during Monday’s hearing, although he stopped short of publicly naming the attorney or victim.
“Correia was effectively the closer,” Roos told the judge. “He wasn’t some sidekick. He wasn’t an assistant to Parnas…They may play different rules, but both roles are equally important.”
Oetken also focused on the $500,000, asking the prosecutor if all that money was destined for Fraud Guarantee “as opposed to something else.”
“Bottom line is the record is not fully developed on that question,” Roos replied.
Harrington said his client had not diverted any of those funds. “Every penny of the $500,000 went to Attorney-1. Mr. Correia didn’t take any of that money,” the defense lawyer said.
Lawyers for Gucciardo and Giuliani did not immediately respond to requests for comment Monday. Giuliani and his attorney have said Giuliani had no knowledge of any fraud or of political donations made under false names.
The case drew widespread attention when charges were filed in 2019, not just because of the ties to Giuliani but because prosecutors alleged that part of the broader scheme involved efforts to oust the U.S. Ambassador to Ukraine, Marie Yovanovich. That effort eventually led to Trump’s first impeachment. There was no discussion of those matters during Monday’s sentencing hearing.
Correia has conceded that he made false statements to investors, but has insisted that he “full heartedly” believed the company — ironically aimed at insuring investors against losses — would eventually be successful.
“He really hoped that these businesses would become something. He spent years working on them,” Correia’s lawyer William Harrington said during Monday’s hearing. “There really was an effort to build a business here.”
Correia, who has described himself as a former professional golfer, has said he was drawn in by Parnas’ high-flying lifestyle.
Harrington also noted that not all victims in the case called for severe punishment. “Two of the victims of the offense submitted letters that talked very positively about David,” the defense attorney said.
“That is something that you don’t see every day in a fraud case,” Oetken, the judge, observed.
Prosecutors urged a sentence in the federal guidelines range of 33 months to 41 months in prison. However, Harrington said the court’s probation office favored a sentence “well below” that range.
Roos said Correia deserved a stiff sentence, in part because “Fraud Guarantee” was advertised as a business that would effectively prevent investors from being swindled.
“There’s of course an irony or a pun involved in the fact that that’s the name of the business here,” Roos said. “While they were saying those thing acknowledging specifically the damage that can come from fraud, they were stealing money….It’s just so brazen and it demands a significant sentence.”
“The irony of the business’ name, Fraud Guarantee, is hard to ignore,” the judge said.