United States v. Parnas

1

UNITED STATES OF AMERICA v. LEV PARNAS and ANDREY KUKUSHKIN, Defendants.

No. 19-CR-725 (JPO)

United States District Court, S.D. New York

March 7, 2022

OPINION AND ORDER

J. PAUL OETKEN, District Judge.

Defendants Lev Parnas and Andrey Kukushkin, along with other individuals, were charged with federal election law violations for a scheme in which they conspired to disguise and use a foreign national's money for contributions to political candidates in U.S. elections (the “Foreign Donor Scheme”), in violation of the prohibition on political contributions from foreign nationals. See 52 U.S.C. § 30121. These contributions went to candidates in states where Defendants intended to seek licenses to operate a cannabis business. Parnas, along with another individual, was also charged with federal election law violations for conspiring to disguise and falsely report the source of donations to political action committees and campaigns (the “Straw Donor Scheme”), thereby evading federal contribution limits. See 52 U.S.C § 30122. Following a jury trial in October 2021, Parnas and Kukushkin were convicted on all counts against them. Both Defendants have moved for judgment of acquittal or, in the alternative, for a new trial.

I. Background

The Court presumes familiarity with the background of this case and with the legal issues addressed in the Court's opinion resolving Defendants' pretrial motions. See United States v. Parnas, No. 19 Cr. 725, 2021 WL 2981567 (S.D.N.Y. July 14, 2021).

The trial against Defendants began on October 13, 2021. On October 22, 2021, the jury found Parnas guilty on all counts for his role in the Foreign Donor Scheme - Counts One (conspiracy to make contributions by a foreign national), Two (solicitation of a foreign national), Three (aiding and abetting the making of a contribution by a foreign national) - and on all counts for his role in the Straw Donor Scheme - Counts Four (conspiracy to make contributions in the name of another), Five (false statements), and Six (falsification of records). The jury also found Kukushkin guilty on all counts for his role in the Foreign Donor Scheme - Counts One and Three. (See Dkt. No. 249.) Kukushkin was not alleged to have participated in, or to have had any connection to the Straw Donor Scheme. (See Dkt. No. 207.)

Parnas and Kukushkin have both moved for judgment of acquittal pursuant to Rule 29 of the Federal Rules of Criminal Procedure. They move, in the alternative, for a new trial pursuant to Rule 33.

II. Motions for Judgment of Acquittal

A motion for judgment of acquittal under Rule 29 may be granted only if “no rational trier of fact could find guilt beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 317 (1979). When considering such a motion, the Court “must view the evidence in the light most favorable to the government, crediting every inference that could have been drawn in the government's favor, and deferring to the jury's assessment of witness credibility and its assessment of the weight of the evidence.” United States v. Pauling, 924 F.3d 649, 656 (2d Cir. 2019) (internal quotation marks omitted). A defendant challenging a jury's guilty verdict “bears a heavy burden.” United States v. Martoma, 894 F.3d 64, 72 (2d Cir. 2017) (internal quotation marks omitted).

Defendants argue that the evidence at trial was insufficient to support the jury's guilty verdict for several reasons. Each is addressed in turn.

A. Foreign Donor Scheme

Defendants contend that there was evidence of facts in the case that would have prevented a rational trier of fact from concluding that there was any kind of conspiracy with respect to the Foreign Donor Scheme. Kukushkin also challenges the sufficiency of the evidence that he had a meeting of the minds with his co-conspirators and that he joined the conspiracy willfully.

1. Existence of a Conspiracy

First, Parnas and Kukushkin point out that the political contributions in this case went to recipients who were staunch opponents of legalized cannabis. But this fact does not exculpate Defendants from participating in a conspiracy. The relevant statutes here, which criminalize donation of foreign money, straw donations, and defrauding the Federal Election Commission (“FEC”), do not also require that political donations actually influence the recipient or help the donor. See 52 U.S.C. §§ 30121, 30122, and 30109(d)(1)(A) & (D). At best, this argument provides circumstantial evidence that the schemes here might have been illogical and perhaps less likely to have occurred - an inference that the jury could, and did, reject in light of the ample evidence of a conspiracy. Indeed, the government introduced evidence that supported the inference that defendants believed, even if mistakenly, that their donations would help their cannabis business. For instance, after the Nevada cannabis license deadline passed, Kukushkin texted his co-conspirators that they could “change the rules” with the help of “the Governor” and “the Attorney General.” (See GX 81.) And a chart of proposed donations to political candidates, which Kukushkin sent to Muraviev, was titled “Cannabis Schedule and Budget.” (See GX 33, 45.) A reasonable jury could rely on this evidence to infer that the political contributions in this case were made as a part of an illegal conspiracy.

Second, Parnas and Kukushkin argue that the evidence did not support the existence of a conspiracy because of the timing of some donations and the fact that Muraviev's money could not be traced to all the donations. It is true that some of the political donations in this case were made before Muraviev transferred any money. The government, however, introduced evidence of an agreement among Kukushkin, Parnas, and other individuals that Muraviev's money would reimburse these earlier donations. Fruman texted Muraviev, in a message later forwarded to Parnas and Kukushkin, that he and Parnas “handed out a lot ....We had no doubt that the funds would come according to the set schedule.” (See GX 58-A-84-T.) A text from Kukushkin stated that “we all have a clarity from day 1” on the “precise course of action” for the “[m]oney transferred by Andrey M” to be used “to support” the individuals in a chart of proposed donations. (See GX 83.) There was also the testimony of Kimberly Espinoza, a forensic accountant who traced over $136, 000 of Muraviev's money to reimbursing political contributions. (See GX 1403.) Though Parnas and Kukushkin accurately note that Espinoza could not identify which funds paid off the credit card used to fund donations to Adam Laxalt and Wes Duncan (see Tr. 1015-17), the money Espinoza could trace was more than sufficient since the relevant threshold to sustain Defendants' convictions is $25, 000. See 52 U.S.C. § 30109(d)(1)(A) & (D). Moreover, there were communications among the co-conspirators supporting the inference that Muraviev's money also reimbursed the Laxalt and Duncan donations. (See, e.g., GX 58 (chat exchange noting that donations were “committed” but not yet “paid” to Laxalt and Duncan, among others).)

Viewing all the evidence in the light most favorable to the government, and deferring to the jury's assessment of witness credibility, the Court concludes that a rational jury could find that there was a conspiracy among Parnas, Kukushkin, and other individuals.

2. Meeting of the Minds

Kukushkin contends that the evidence at trial failed to show that he reached an agreement with Parnas and the other co-conspirators to funnel Muraviev's money to political candidates. Kukushkin instead asserts that the evidence, at best, showed fluid negotiations that never materialized into an agreement. This argument is directly undermined by evidence of Kukushkin's own words to his co-conspirators.

The government introduced several text messages that Kukushkin sent to his coconspirators about their illicit agreement to donate Muraviev's money to political candidates:

• “Leva, the money where wired to Global Energy in order cover all the donations whatsoever” (GX 86);

• “please allocate 10% of the existing donation funds” (GX 54);

• “We were supposed to tell him that the check(s) from Global are indeed the donations from us” (GX 86);

• “I believe we all have a . . . precise course of action .... Money transferred by Andrey M to Global was to support the very specific people & states (per Igor's table) in order to obtain green light for licensing” (GX 83).

Kukushkin maintains that the “donations” he spoke of in his text messages were for the benefit of Global Energy (“GEP”), but one of his messages states that the checks from GEP were “the donations from us.” (GX 86.) And a separate message from Kukushkin lays out that the money “transferred by Andrey M to Global” was meant to support “specific people & states, ” not GEP. In addition to these text messages, Kukushkin forwarded a chart of proposed campaign contributions to Muraviev and asked Muraviev to transfer $500, 000 to Parnas and Fruman. (See GX 45.)

Kukushkin's arguments against the weight of this evidence are availing. Kukushkin counters that his text messages were cherry picked, and that many of his text exchanges with his co-conspirators were about completely legal aspects of the group's ventures. To be sure, the evidence showed that Kukushkin and his co-conspirators also discussed lawful plans, which the government acknowledges. Yet Kukushkin and others discussing lawful plans does not exculpate Kukushkin of agreeing to unlawful plans too.

Kukushkin also argues that these text exchanges do not show a true meeting of the minds because other evidence showed that his co-conspirators were not sincerely invested in the cannabis venture and even diverted some of Muraviev's money for their personal...