The other defendants, Lev Parnas, Igor Fruman and Andrew Kukushkin pleaded not guilty. A trial was scheduled to start in March, but has been postponed indefinitely due to concerns from Covid-19.
Giuliani was not charged in the case. However, in a lawsuit last week over Correia’s sentence, prosecutors describe how a prominent lawyer appeared in the bid that Correia and Parnas made to bring money to their venture, known as “Fraud Guarantee”.
“To seal the deal with Victim-7, Correia sent a message to Parnas the next day that ‘everything is fine’ with Victim-7 and the ‘only contingency he had was that he was asking the Prosecutor-1 to call him to welcome him on board so that he knows that he really is part of it ‘”, the prosecutors wrote.
Prosecutors say the victim investor remained nervous.
“Just confirm here that [Attorney-1] he is a partner in this and will be in it for a long time with all of us ”, wrote the anonymous investor, according to the promoters.
Correia replied: “He is absolutely integrated and is part of the company. He saw [his consulting firm] will be with us and will help with compliance and regulatory issues, advertising and marketing and various other results. He also agreed that we can use his image to be the ‘face of the company’ (if we wish) for commercials, advertisements, etc. He personally will also be involved in sales / business development. . . . Simply put, we will have full access to your entire team. Extremely broad list of things he agreed to do. The relationship is very strong and we are doing business with him in other roles as well. ”
Prosecutors say this led to this response from the potential investor: “Okay. I’m in.”
Public records do not mention Giuliani, but the details of the lawsuit align with press reports of $ 500,000 payments that a Long Island personal injury lawyer, Charles Gucciardo, transmitted to Giuliani Associates in September and October 2018.
US Attorney Attorney Nicolas Roos pointed to the same exchanges on the $ 500,000 during Monday’s hearing, although he avoided publicly naming the lawyer or victim.
“Correia was effectively the closest,” Roos told the judge. “He was no companion. He was not an assistant to Parnas … They may play different roles, but both roles are equally important. “
Oetken also focused on the $ 500,000, asking the prosecutor if all that money was intended for the Fraud Guarantee “and not the other thing”.
“The main point is that the registry is not fully developed on this issue,” replied Roos.
Harrington said his client did not embezzle any of those funds. “Every penny of the $ 500,000 went to Attorney-1. Mr. Correia didn’t take any of that money, ”said the defense lawyer.
Gucciardo and Giuliani’s lawyers did not immediately respond to requests for comment on Monday. Giuliani and his lawyer said Giuliani was not aware of any fraud or political donations made under false names.
The case attracted widespread attention when the charges were brought in 2019, not just because of ties to Giuliani, but because prosecutors claimed that part of the broader scheme involved efforts to oust U.S. Ambassador to Ukraine Marie Yovanovich. That effort eventually led to Trump’s first impeachment. There was no discussion of these matters during Monday’s sentencing hearing.
Correia admitted that he made false statements to investors, but insisted that “with all my heart” believed that the company – ironically designed to insure investors against losses – would eventually succeed.
“He really expected these businesses to 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 described himself as a former professional golfer, said he was attracted to Parnas’ lifestyle.
Harrington also noted that not all victims in the case have called for severe punishments. “Two of the crime victims sent letters that spoke very positively about David,” said the defense attorney.
“This is something you don’t see every day in a fraud case,” noted Oetken, the judge.
Prosecutors asked for a sentence in the range of federal guidelines from 33 months to 41 months in prison. However, Harrington said the court’s parole office favored a sentence “well below” that range.
Roos said Correia deserved a harsh sentence, in part because the “Fraud Guarantee” was advertised as a deal that would effectively prevent investors from being deceived.
“Of course, there is an irony or a pun involved in the fact that this is the name of the business here,” said Roos. “While they were saying these things while specifically acknowledging the damage that can come from fraud, they were stealing money … It is so brazen and requires a meaningful sentence.”
“The irony of the company’s name, Guarantee of Fraud, is difficult to ignore,” said the judge.