WASHINGTON — In the year after he announced a federal inquiry into his “tax affairs” in late 2020, President Biden’s son, Hunter Biden, paid a significant tax debt even as a grand jury continued to gather evidence in an extensive investigation of his international business dealings , according to people familiar with the case.
Mr Biden’s inability to pay all of his taxes has been a focus of the Justice Department’s ongoing investigation. While eliminating his liability doesn’t rule out criminal charges, the payment could make it harder for prosecutors to get a conviction or long sentence for tax-related crimes, according to tax law experts, as juries and judges are generally more sympathetic to defendants who have paid their bills.
But Mr Biden’s taxes are just one part of the wider investigation that has come out of work he’s done around the world. Hunter Biden is a Yale-trained attorney; his professional life has crossed paths with his father’s public service, which includes working as a registered lobbyist for domestic interests and, while his father was vice president, pursuing deals and clients in Asia and Europe.
Just last month, the federal grand jury in Wilmington, Del., heard testimony from two witnesses, one of whom was a former employee of Hunter Biden whose attorney was later subpoenaed over financial records reflecting the money Mr. Biden received from a Ukrainian energy company. business.
The investigation, which began as a tax investigation under the Obama administration, expanded in 2018 into possible criminal violations of tax laws, as well as foreign lobbying and money laundering rules, according to people familiar with the investigation.
But prosecutors face a number of hurdles to bring criminal charges, people familiar with the investigation said, including evidence that Mr Biden deliberately violated the Foreign Agents Registration Act, or FARA, which required disclosure to the ministry. of Justice from lobbying or public relations assistance required. on behalf of foreign clients.
The Justice Department has given no public indication that it has made decisions on any part of the case, and Mr Biden has not been charged with any crime.
Speaking about the post-2020 election investigation, Hunter Biden said that “a professional and objective review of these matters will demonstrate that I have conducted my business legally and correctly.”
Biden’s attorney, the Department of Justice and the U.S. law firm in Delaware, which oversees the investigation, all declined to comment.
It is not clear whether the criminal investigation is solely focused on Hunter Biden, or whether he is part of a group of individuals and companies under investigation. Prosecutors have also asked about possible FARA violations by a Washington consulting firm, Blue Star Strategies, that worked for the Ukrainian energy company in a scheme that helped Mr. Biden act as an intermediary, according to documents and those familiar with the investigation.
For President Biden, the long-running case is both politically and personally fraught. Hunter Biden’s work for Ukrainian energy company Burisma Holdings became a flashpoint in his father’s 2020 race against President Donald J. Trump and helped kick-start the events leading up to Trump’s first impeachment.
The elder Biden now oversees the Justice Department conducting the investigation. And Hunter Biden, who has pursued a career as a painter in recent years, has acknowledged serious drug addiction and other problems during his time seeking international business while coping with the illness and death of his brother Beau.
The investigation is overseen by David C. Weiss, the US attorney for Delaware. He worked in the office during the Bush and Obama administrations, and was nominated by Mr. Trump to lead it. Mr Weiss has been cleared to remain in office until the Biden case is resolved.
Hunter Biden told employees in recent months that he paid federal taxes that were the subject of investigation by the Department of Justice. He told an employee that the tax debt was over $1 million and that he needed to take out a loan to pay it off.
Federal tax prosecutors generally fight to prevent jurors from knowing whether defendants have paid their back tax bills, arguing that the crime occurs when the return is filed incorrectly or not at all, said Jeffrey Neiman, a former Justice Department tax attorney. and a partner at Marcus, Neiman, Rashbaum & Pineiro. Such knowledge can influence jurors even if a judge asks them not to take it into account.
Mr. Neiman said defense attorneys encourage clients to pay their back taxes if they believe they could be charged with federal tax crimes, as this often aids in conviction.
Mr Biden’s extensive work with foreign companies came under scrutiny by prosecutors investigating whether he should have registered with the Justice Department as a foreign agent.
Investigators have been examining Mr Biden’s relationships with interests in Kazakhstan, a Chinese energy conglomerate, and Burisma, the Ukrainian energy company, according to people familiar with the investigation.
They said prosecutors had been investigating payments and gifts Biden or his associates received from foreign interests, including a vehicle paid for with money from a company associated with a Kazakh oligarch and a diamond from a Chinese energy magnate. Prosecutors also sought documents related to corporate entities through which Mr. Biden and his associates conducted business with interests around the world.
But there has been debate within the Justice Department as to whether the available evidence proves Mr Biden intended to violate FARA, which the government must prove to get a criminal conviction. Prosecutors have discussed approaching potential FARA violations as a civil matter, which would require Biden retroactively register as a foreign agent but avoid criminal charges, according to those familiar with the case.
Such a resolution could complicate a potential money laundering case, as money laundering is usually charged in connection with another crime.
Over the past two years, federal prosecutors in Delaware have issued dozens of subpoenas for documents related to Hunter Biden’s foreign work and for bank accounts linked to him and his associates, including two former close business associates, Eric Schwerin and Devon Archer, according to the report. people familiar with the study.
Last year, prosecutors interviewed Mr. Archer and subpoenaed him for documents and testimony from the grand jury, the people said. Mr. Archer, who was convicted last month in an unrelated securities fraud case that overturned a decision to withdraw his conviction, had served on Burisma’s board along with Mr. Biden as of 2014.
People familiar with the investigation said prosecutors had been investigating emails between Mr Biden, Mr Archer and others about Burisma and other foreign business activities. Those emails were obtained by DailyExpertNews from a cache of files that appear to come from a laptop left by Mr. Biden at a Delaware repair shop. The email and others in the cache have been verified by people familiar with them and the research.
In some emails, Mr. Biden expressed familiarity with FARA and a desire not to activate it.
In an email to Mr. Archer in April 2014, Mr. Biden’s vision for the collaboration with Burisma. In the email, Hunter Biden indicated that Vice President Biden’s upcoming announcement of a trip to Ukraine — who is referred to in the email as “my husband” but not by name — “should be characterized as part of our advice and thinking. – but what he will say and do is not in our hands.”
The announcement “could be a very good thing, or it could lead to too high an expectation. We need to temper expectations regarding that visit,” Hunter Biden wrote.
Vice President Biden traveled to Kiev, the capital of Ukraine, about a week after the email.
In the same April 2014 email, Hunter Biden indicated that Burisma officials “should know in no uncertain terms that we will not and cannot intervene directly with domestic policymakers, and that we must abide by FARA and other U.S. laws.” in the strict sense of the word. across the board.”
He suggested bringing in the law firm where he worked at the time, Boies Schiller Flexner, to assist Burisma through “direct discussions with the state, energy and NSC,” citing two cabinet departments and the National Security Council in the White House.
The company “can create a media plan and arrange for legal protections and mitigate domestic negative press in the US regarding current leadership if necessary,” Biden wrote in the email.
Mr. Biden, Mr. Archer, Boies Schiller Flexner and Blue Star Strategies have not registered with FARA on behalf of Burisma.
In another series of emails investigated by prosecutors, Hunter Biden and Mr. Archer discussed inviting foreign business associates, including a director of Burisma, to dinner in April 2015 at a Washington restaurant that Vice President Biden was due to visit. come. It is not clear whether the Burisma chief executive attended the dinner, although the vice president did appear, according to people familiar with the event.
According to her attorney, the prosecutors also subpoenaed documents related to a lawsuit filed by Mr. Biden’s former employee, Lunden Alexis Roberts, in Arkansas District Court.
Ms. Roberts sued Mr Biden for child support and paternity in 2019 after one of his companies stopped paying her and provided her with health insurance, according to court records.
Mr Biden and Ms Roberts reached an amicable settlement in the paternity case in March 2020.
Last year, prosecutors traveled to Little Rock, Ark., and asked Ms. Roberts and her attorney about Mr. Biden’s finances, including which legal entity he paid her, and whether that entity had received payments from Burisma, according to a person familiar with the question.
And last month, in response to another subpoena, Ms. Roberts before the grand jury in Delaware, according to her attorney.