Trial For Ex-Giuliani Associates Delayed Again

By Stewart Bishop
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Law360, New York (November 30, 2020, 10:59 PM EST) -- A New York federal judge on Monday signaled he would again delay the trial of former associates of Rudy Giuliani accused of campaign finance charges and bilking investors, in light of the COVID-19 pandemic and ensuing trial backlog.

During a virtual hearing, U.S. District Judge J. Paul Oetken said he was inclined to delay the trial of Lev Parnas, Igor Fruman and Andrey Kukushkin, former associates of President Donald Trump's lawyer, Giuliani, in light of the sizable backlog of cases awaiting trial in the Southern District of New York.

Parnas, Fruman and Kukushkin are accused of conspiring to skirt the ban on political contributions by foreign nationals. Parnas and Fruman were also accused of using straw donors, false statements and bogus records to obstruct the Federal Election Commission.

In a superseding indictment filed in September, Parnas and Fruman were further charged with making a contribution by a foreign national. Parnas is also accused of defrauding investors in the insurance startup, Fraud Guarantee, that was supposed to protect securities investors from fraud. Multiple news organizations have reported that Giuliani received $500,000 from Fraud Guarantee in 2018, purportedly for consulting work.

Parnas, Fruman and Kukushkin are also accused of unlawfully donating to the campaign of candidate Wesley Duncan, part of a failed plan to use donations to help a Russian businessman enter the U.S. cannabis business.

Parnas and Fruman and Kukushkin on Monday pled not guilty to the latest indictment. A fourth co-defendant, David Correia, pled out last month.

Judge Oetken, who had previously set trial dates for October 2020 and most recently March 2021, said the Southern District has essentially stopped doing trials for the time being, explaining that Chief Judge Colleen McMahon has issued "very strong instructions … not to do anything in the courthouse unless we really have to."

In an order issued late Monday, Judge McMahon suspended all in-person proceedings in the Southern District from Dec. 1 to Jan 15, "to preserve public health and safety in light of the recent spike in coronavirus cases," both and nationally and within the district. 

While Judge Oetken said he had already asked courthouse officials to schedule a trial for March 1, there are "dozens and dozens" of other pending SDNY trial requests for the first quarter of 2021.

"There's a significant backlog of trials, many of which involve detained defendants, which take priority," Judge Oetken said.

Defense attorneys had urged the judge to delay the trial, as well as motion practice, citing difficulties preparing for trial amid the pandemic as well as problems with reviewing the enormous amount of discovery the government is producing.

An attorney for Fruman, Todd Blanche of Cadwalader Wickersham & Taft LLP, told Judge Oetken it would be difficult to try and plan a trial amid the pandemic with three defendants who do not live in New York, as well as many out-of-state witnesses, all of whom could be required to quarantine after traveling.

"With COVID, we're very limited as to what we can do," Blanche said. "As far as trying to reach out to witnesses, it's not easy, it's just a different time."

Assistant U.S. Attorney Nicolas Roos urged Judge Oetken to keep the March 1 trial date, and not to delay motion practice, calling complaints about discovery production "overblown." He also cited recent SDNY criminal trials that have taken place without incident, including a multi defendant trial, in apparent reference to the fraud trial of two former MiMedx Group Inc. executives.

"The court has been great in adjusting some of the rules for some of the out-of-state witnesses and some of the precautions that are being taken," Roos said. "We have a track record indicating the trial can be accomplished here in the Southern District."

Judge Oetken opted not to delay motion practice, which is due to commence on Tuesday, but noted that he would be open to additional motions based on discovery that has not yet been produced.

The judge asked for the parties to meet and confer over potential trial dates "hoping a vaccine is around the corner, possibly between June and October.

The government is represented by Douglas Zolkind, Rebekah Donaleski and Nicolas Roos of the U.S. Attorney's Office for the Southern District of New York.

Parnas is represented by Joseph Bondy of the Law Offices of Joseph A. Bondy and Stephanie Schuman of Leaf Legal PC.

Fruman is represented by Todd Blanche of Cadwalader Wickersham & Taft LLP.

Kukushkin is represented by Faith Alison Friedman and Gerald B. Lefcourt of Gerald B. Lefcourt PC.

The case is U.S. v. Parnas et al., case number 1:19-cr-00725, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Pete Brush. Editing by Emily Kokoll.

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