WASHINGTON — Two IRS whistleblowers told Congress in closed-door testimony released Thursday that the Justice Department waged a coverup in the tax fraud investigation of first son Hunter Biden — revealing stunning details of alleged interference and new evidence indicating President Biden was involved in his son’s foreign dealings.
Among the shocking details made public by the House Ways and Means Committee:
*The Hunter Biden probe was opened in November 2018 off the back of an investigation the IRS was conducting of a “foreign-based amateur online pornography platform,” according to whistleblower Gary Shapley.
*The first son was given the code name “Sportsman” by investigators.
*Delaware US Attorney David Weiss sought to bring federal charges against Hunter, 53, in the Central District of California and in Washington, DC, last year and was denied both times by Biden-appointed US attorneys Martin Estrada and Matthew Graves, respectively.
*According to the second whistleblower, who has remained anonymous, the investigation covered the years 2014 through 2019, during which Hunter and his “associates” received approximately $17.3 million from Ukraine, Romania and China — with the first son alone scooping $8.3 million.
*Investigators pressed for felony charges against Hunter for ducking $2.2 million in tax payments — rather than misdemeanors announced Tuesday as part of a probation-only plea deal.
*Assistant US Attorney Lesley Wolf discouraged investigators from pursuing lines of questioning related to Joe Biden, saying at one point that there was “no specific criminality,” according to Shapley.
The revelation that Biden appointees blocked charges against his son is politically explosive because Attorney General Merrick Garland testified under oath to Congress earlier this year that Weiss was empowered to bring charges outside of Delaware. Intentionally misleading Congress is a crime.
Weiss, who signed off this week on the Delaware plea deal, sought to be appointed special counsel in the case at least twice — including as recently as spring 2022 — but was turned down by the Biden Justice Department, both whistleblowers alleged.
Shapley, who sat for a six-hour deposition with the committee on May 26, took over the Hunter Biden case in January 2020 and said that investigators had turned up fresh evidence of Joe Biden’s involvement in his family’s overseas income.
That included eye-popping communications from Hunter Biden’s iCloud account, Shapley said, citing a message that directly implicated the president in an attempt to coerce money from a Chinese businessman.
“[W]e obtained a July 30th, 2017, WhatsApp message from Hunter Biden to Henry Zhao, where Hunter Biden wrote: ‘I am sitting here with my father and we would like to understand why the commitment made has not been fulfilled. Tell the director that I would like to resolve this now before it gets out of hand, and now means tonight. And, Z, if I get a call or text from anyone involved in this other than you, Zhang, or the chairman, I will make certain that between the man sitting next to me and every person he knows and my ability to forever hold a grudge that you will regret not following my direction. I am sitting here waiting for the call with my father,'” Shapley recounted.
Shapley identified the businessman as Henry Zhao, but two sources identified Raymond Zhao, an employee and translator at CEFC China Energy, as the recipient to The Post.
Hunter’s firm took nearly $5 million from the Chinese energy firm within 10 days of the message.
“We couldn’t believe that we saw that,” the second whistleblower told the committee. “That was more indication that the dad might have been involved.”
Henry Zhao, of Harvest Fund Management, is a Communist Party official and his fund was associated with BHR Partners, an investment fund Hunter that co-founded in 2013 12 days after he joined his Vice-President Biden aboard Air Force Two for an official trip to Beijing, the Wall Street Journal reported.
Hunter held onto his 10% stake in BHR Partners through at least part of his father’s first year in office as president and the White House and Hunter’s representatives have refused any transparency into his alleged divestment.
The BHR venture was the first of two major Biden family dealings in China. Through the second with CEFC China Energy, Hunter and first brother James Biden received $4.8 million in 2017 and 2018, according to a Washington Post review of laptop records. A May 2017 email about the CEFC deal referred to Joe Biden as the “big guy” due a 10% cut and an October 2017 document listed Joe Biden as a participant on a call about CEFC’s attempt to buy US natural gas.
Another $100,000 from CEFC flowed directly to Hunter’s law firm Owasco P.C., according to the IRS whistleblowers.
Shapley said investigators were barred from searching a guest house at Joe Biden’s Wilmington, Del. home to find supporting evidence and that Wolf objected during a meeting on Dec. 3, 2020, to questioning a key Biden family associate, Rob Walker, about the president.
“Wolf interjected and said she did not want to ask about the big guy and stated she did not want to ask questions about ‘dad'” he said.
“When multiple people in the room spoke up and objected that we had to ask, she responded, there’s no specific criminality to that line of questioning. This upset the FBI too,” Shapley testified.
But investigators later did ask Walker about Joe Biden’s role. An FBI agent asked if there were “any times when he was in office, or did you hear Hunter Biden say that he was setting up a meeting with his dad with them while dad was still in office?”
“Yes,” Walker answered, according to Shapley, before “inexplicably, the FBI agent changed the subject.”
The Walker interview, on Dec. 8, 2020, was one of 12 investigators had planned to conduct on a so-called “day of action.” However, Shapley said, he learned the night before that “FBI headquarters had notified Secret Service headquarters and the transition team about the planned actions the following day. This essentially tipped off a group of people very close to President Biden and Hunter Biden and gave this group an opportunity to obstruct the approach”. According to Shapley, the first son’s attorneys refused to allow him to be interviewed.
As for the guest house, Shapley said that on Sept. 3, 2020, “Wolf told us there was more than enough probable cause for the physical search warrant there, but the question was whether the juice was worth the squeeze.”
Wolf added, according to Shapley, that “optics were a driving factor in the decision on whether to execute a search warrant. She said a lot of evidence in our investigation would be found in the guest house of former Vice President Biden, but said there is no way we will get that approved.”
The testimony also mentions Hunter’s infamous abandoned laptop was verified by the FBI in November 2019, but investigators thereafter were barred from seeing it, Shapley said.
“When the FBI took possession of the device in December 2019, they notified the IRS that it likely contained evidence of tax crimes,” Shapley said.
However, the laptop was then not shared, prompting an outcry from tax investigators who wanted to look into evidence of criminality on the device — including potential crimes by Joe Biden, whom Hunter griped in a laptop message took “half” of his lucrative foreign income from countries where the elder Biden held sway as vice president.
Wolf “stated that she would not have seen it because, for a variety of reasons, prosecutors decided to keep it from the investigators. This decision is unprecedented in my experience,” Shapley said while recalling a meeting involving investigators and FBI computer analysts in October 2020.
“Investigators assigned to this investigation were obstructed from seeing all the available evidence,” Shapley said. “It is unknown if all the evidence in the laptop was reviewed by agents or by prosecutors. Based on guidance provided by the prosecutors on a recurring basis to not look into anything related to President Biden, there is no way of knowing if evidence of other criminal activity existed concerning Hunter Biden or President Biden.”
Another investigative dispute erupted in December 2020 over the question of whether to search Hunter Biden’s Northern Virginia storage unit, with Shapley saying the IRS had “prepared an affidavit in support of a search warrant for the unit, but … Wolf once again objected.”
On Dec. 14, Weiss — Wolf’s boss — told Shapley that “that if the storage unit wasn’t accessed for 30 days we could execute a search warrant on it.
“No sooner had we gotten off the call then we heard AUSA Wolf had simply reached out to Hunter Biden’s defense counsel and told him about the storage unit, once again ruining our chance to get to evidence before being destroyed, manipulated, or concealed,” he testified.
Days earlier, the second whistleblower said he had prepared an affidavit in support of searching the storage unit at Wolf’s direction.
“I would like to possibly execute this sometime next week,” he emailed Wolf Dec. 8. “I think that is
reasonable, given the upcoming holiday.”
According to him, Wolf responded the following day: “We are getting to work on this, but I want to manage expectations with you regarding timing. It has to go through us, DOJ Tax, possibly [Office of Enforcement Operations], and definitely Eastern District of Virginia, who has never seen the case before, layer in the filter requirements in the Fourth Circuit, and it’s just not clear it’s going to happen next week, even with everyone making it a priority.”
“That tells me two things right there,” the second whistleblower said. “[First,] That David Weiss wasn’t really in charge. And it also tells me that I have never had a case where, if we needed to get records and preserve them, that we didn’t do everything in our power to get a search warrant approved and get moving on that expeditiously.”
Although she allegedly blunted some of the inquiries, Wolf did support much harsher charges than ultimately were leveled, according to the testimony.
“AUSA Wolf supported charging Hunter Biden for tax evasion and false return in 2014, 2018, and 2019, and failure to file or pay for 2015, 2016, and 2017,” Shapley said. “The proper venue for a tax case is where the subject resides or where the return is prepared or filed. That meant the proper venue for the years we were looking into would either be Washington, D.C., or California, not Delaware,” resulting in the impasse with Biden’s appointees.
According to Shapley, the refusal by Graves to bring charges in the District meant Hunter’s actions in 2014 and 2015 would not be prosecuted.
“The years in question included foreign income from Burisma and a scheme to evade his income taxes through a partnership with a convicted felon,” he said. “There were also potential [Foreign Agents Registration Act] issues relating to 2014 and 2015. The purposeful exclusion of the 2014 and 2015 years sanitized the most substantive criminal conduct and concealed material facts.”
The shocking allegations came two days after Weiss revealed that Hunter Biden had accepted a deal in which he agreed to plead guilty to two misdemeanor counts of willful failure to pay taxes on at least $3 million in income earned across 2017 and 2018. The first son also agreed to enter a pretrial diversion program to avoid a felony conviction for owning a firearm while addicted to drugs. The plea deal still must be approved by a judge.
“Attorney General Merrick Garland told Congress Weiss had all the authority necessary,” Ways and Means Committee Chairman Jason Smith (R-Mo.) pointed out Thursday. “Well, which is it?”
This past March, Sen. Chuck Grassley (R-Iowa) pressed Garland on whether Weiss was truly able to bring charges without the approval of other Justice Department officials, specifically if the alleged crime occurred outside Delaware.
“Without special counsel authority, he could need permission of another US attorney in certain circumstances to bring charges outside the district of Delaware,” Grassley noted at the time. “I would like clarification from you with respect to these concerns.”
Garland replied that Weiss would be able to charge Hunter Biden even for crimes that occurred outside Delaware.
“The US attorney in Delaware has been advised that he has full authority to make those kind of referrals that you’re talking about or to bring cases in other jurisdictions if he feels it’s necessary. And I will assure that if he does, he will be able to do that,” the AG said.
Grassley pressed: “Does the Delaware US attorney lack independent charging authority over certain criminal allegations against the president’s son outside of the district of Delaware?”
“If it’s in another district, he would have to bring the case in another district, but as I said, I’ve promised to ensure he’s able to carry out his investigation and that he be able to run it and if he needs to bring it in another jurisdiction, he will have full authority to do that,” Garland said.
Chris Clark, an attorney for Hunter Biden, did not immediately respond to a request for comment.
The IRS said in a statement: “Under federal law, the IRS can’t comment on specific taxpayer matters. These are laws designed to protect taxpayers, and we take them seriously.”
Joe Biden has repeatedly denied speaking with his son about his overseas business interests, despite clear evidence to the contrary.
Additional reporting by Ryan King
This story was updated June 26, 2023, to reflect additional reporting that indicates Hunter Biden was contacting CEFC translator Raymond Zhao. An earlier version of this story cited Shapley’s testimony that Hunter was texting Henry Zhao, who serves as the chairman of Harvest Fund Management and partnered on a separate deal with the first son’s firm BHR Partners.
