Pot lawsuit may provide clues to Russian funds in Parnas, Fruman straw donor scheme

The federal indictment of South Florida businessmen Igor Fruman and Lev Parnas — associates of Rudy Giuliani who have emerged as key figures in the House impeachment inquiry into President Donald Trump — contained a mystery as to the source of Russian money prosecutors said was used for political donations tied to a fledgling, and ultimately unsuccessful, marijuana business.

While the indictment doesn’t reveal the name of the Russian businessman who allegedly bankrolled the effort, court documents in an unrelated California breach of contract lawsuit involving Russian businessman Andrey Muraviev may provide clues to the identity of the unnamed Russian identified as Foreign National-1.

The indictment, released Wednesday, did lay out Parnas and Fruman’s efforts to hide their identities and give more money politically than legally allowed to win influence in the Trump administration. It went on to describe the pair’s scheme to serve as straw political donors for the unnamed Russian businessman who was hoping to invest in marijuana businesses in Nevada and other states.

And it named two other people in addition to Fruman and Parnas: David Correia and Andrey Kukushkin, who were tied to the marijuana business effort.

The Russian businessman, though, remains unnamed. But a review of marijuana businesses connected to Kukushkin could provide some pieces of the puzzle about his identity: Kukushkin has been involved in several marijuana-related ventures with the wealthy Russian businessman Muraviev.

Three of the indicted men have been arrested. Fruman and Parnas were picked up Wednesday night at Washington Dulles International Airport, reportedly fleeing the country with one-way tickets to Vienna. Kukushkin was arrested in San Francisco Wednesday night. He was to be fitted with an ankle monitor Saturday and was ordered by a judge Friday to appear at a court hearing in New York Thursday.

During Kukushkin’s court appearance Friday, federal prosecutors noted he was incorrect a day earlier when he said he wasn’t sure if his Ukrainian passport was still valid. It was renewed in 2018 and Kukushkin traveled on it multiple times and as recently as this September, they said.

The federal indictment indicates that Parnas, Fruman, Correia, Kukushkin and the Russian businessman met in Nevada — where marijuana had been legalized for recreational use in 2017 — in early September 2018 to discuss the marijuana business. They formalized the plan soon after, with the Russian businessman sending the first of two $500,000 wire transfers to Fruman on Sept. 18, 2018.

Two months later, in November, Fruman donated $10,000 to Nevada’s then-attorney general, Republican Adam Laxalt, who was running for governor, and the same amount to the 2018 Republican nominee for state attorney general, Wesley Duncan, according to state campaign finance records. Duncan lost the election to Democrat Aaron Ford.

On Friday, after news of the alleged scheme came out, Nevada Democratic Gov. Steven Sisolak said he was “outraged” and announced creation of a special multi-agency task force to root out potential criminal influence in the legal marijuana market.

But back in 2018, Correia and Kukushkin were still trying to break into the marijuana market in Nevada. They originally registered a Nevada company called Cannabis Management Group Inc. on Sept. 14, 2018, before changing the name to Strategic Investment Group Inc. 10 days later.

The same national law firm that incorporated the Nevada company — Greenspoon Marder — has also done work for Kukushkin in other marijuana-related ventures. A lawyer from that firm, Robert Finkle, representing Kukushkin in a lawsuit he brought against the owners of a San Francisco medical marijuana dispensary called MediThrive, said that he was “in a state of shock” after hearing of Kukushkin’s indictment.

In the California suit, Kukushkin claims that managers of the dispensary breached their contract and misused the $1 million he invested with them. But the lawsuit hit an early snag after Kukushkin admitted that the $1 million wasn’t actually his money. Much like the federal indictment of Parnas, Fruman, Correia and Kukushin, court filings showed the money in this venture actually came from a wealthy Russian businessman.

Subsequent filings in the case revealed that the money at issue in Kukushkin’s lawsuit appears to have come from Muraviev, the Russian businessman who was the only other investor listed in the California venture. Lawyers representing the owners of Medithrive declined to comment and a call to the management of the dispensary wasn’t returned. The Russia-based Muraviev (whose last name is sometimes spelled Muravyov) runs a Moscow-based investment fund called Parus Capital Limited and has served as an executive for several Russian companies.

Muraviev invested in the California marijuana venture through a company called Palmway Holdings Limited, which appears to be the same British Virgin Islands entity through which he invested in Qiwi, a Russian online payment platform that has been called the Russian PayPal. Muraviev was one of Qiwi’s biggest investors and served on its board for several years. When the company first went public, Muraviev reportedly sold more than 2 million shares for $37 million.

“Not particularly bright in his decision making”

Alan Dressler, a San Francisco-based criminal lawyer for Kukushkin, wouldn’t comment on the indictment, Kukushkin’s relationship with Muraviev and whether Muraviev was involved in the Nevada marijuana scheme.

Representatives at a venture capital fund Run Capital in which Muraviev is one of five investors conveyed questions to Muraviev about his relationship with Kukushkin and whether he was involved in the Nevada scheme but he did not respond.

Lawyers for Parnas and Fruman could not immediately be reached, either.

Jim Margolin, a spokesman for the U.S. Attorney’s Office for the Southern District of New York , which brought the federal indictment, wouldn’t comment on whether Muraviev was involved in the scheme and said that the Russian businessman was not identified in the indictment because he had not been charged.

The indictment, which references a table showing which state and federal candidates were targeted for contributions, shows a concerted effort to clear political hurdles for the marijuana investments.

But it also highlights the group’s incompetence. The Nevada marijuana venture went up in smoke, after Parnas, Fruman, Correia and Kukushin failed to apply for a recreational marijuana license in time.

A Roseville, California, lawyer named Brad Hirsch, who incorporated a company involving Kukushkin and Muraviev but parted ways with them, didn’t mince words when describing Kukushkin.

“I thought he was not particularly bright in his decision making,” Hirsch said.

That company, KKMC Management, LLC, also involved the de facto cannabis king of Sacramento, Garib Karapetyan, who the Sacramento Bee reported controls nearly a third of the legal marijuana industry in the city.

‘Air of flamboyance’

Fruman and Parnas have other ties to the marijuana industry beyond the venture laid out in the federal indictment.

In the spring of 2018, the duo lobbied at least one member of Congress, Carlos Curbelo, now a former Republican from Florida, on marijuana issues.

“They stood out a little bit. They had an air of flamboyance to them,” Curbelo said Thursday on MSNBC, adding that they boasted of White House ties and being “frequent guests at Mar-a-Lago.” Though President Trump said Thursday he did not know them, photos have circulated widely showing the men with Trump and Giuliani.

McClatchyDC reporting intern Alexandra Marquez contributed to this report.

Ben Wieder is a data reporter in McClatchy’s Washington bureau. He worked previously at the Center for Public Integrity and Stateline. His work has been honored by the Society of American Business Editors and Writers, National Press Foundation, Online News Association and Association of Health Care Journalists.
Investigative reporter Kevin G. Hall shared the 2017 Pulitzer Prize for the Panama Papers. He was a 2010 Pulitzer finalist for reporting on the U.S. financial crisis and won of the 2004 Sigma Delta Chi for best foreign correspondence for his series on modern-day slavery in Brazil. He is past president of the Society of American Business Editors and Writers.
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