Hunter Biden Charged With Evading Taxes on
Millions From Foreign Firms
The Justice Department charged President Biden’s son
after a long-running and wide-ranging investigation with substantial political
repercussions.
Glenn
ThrushMichael S. Schmidt
By Glenn
Thrush and Michael S. Schmidt
Reporting
from Washington
Dec. 7,
2023
https://www.nytimes.com/2023/12/07/us/politics/hunter-biden-indictment.html
A federal
grand jury charged Hunter Biden on Thursday with a scheme to evade federal
taxes on millions in income from foreign businesses, the second indictment
against him this year and a major new development in a case Republicans have
made the cornerstone of a possible impeachment of President Biden.
Mr. Biden,
the president’s son, faces three counts each of evasion of a tax assessment,
failure to file and pay taxes, and filing a false or fraudulent tax return,
according to the 56-page indictment — a withering play-by-play of personal
indulgence with potentially enormous political costs for his father.
The
charges, filed in California, came five months after he appeared to be on the
verge of a plea deal that would have avoided jail time and potentially granted
him broad immunity from future prosecution stemming from his business dealings.
But the agreement collapsed, and in September, he was indicted in Delaware on
three charges stemming from his illegal purchase of a handgun in 2018, a period
when he used drugs heavily and was prohibited from owning a firearm.
The tax
charges have always been the more serious element of the inquiry by the special
counsel, David C. Weiss, who began investigating the president’s son five years
ago as the Trump-appointed U.S. attorney for Delaware. Mr. Weiss was retained
when President Biden took office in 2021.
Mr. Biden
“engaged in a four-year scheme to not pay at least $1.4 million in
self-assessed federal taxes he owed for tax years 2016 through 2019,” Mr. Weiss
wrote.
“Between
2016 and Oct. 15, 2020, the defendant spent this money on drugs, escorts and
girlfriends, luxury hotels and rental properties, exotic cars, clothing, and
other items of a personal nature, in short, everything but his taxes,” he
added.
If
convicted, he could face a maximum of 17 years in prison, Justice Department
officials said.
The
charges, while serious, were far less explosive than ones pushed by former
President Donald J. Trump and congressional Republicans, who have been angry
with the department for failing to find wider criminal wrongdoing by the
president’s son and family.
But the
failure of Mr. Biden’s lawyers to reach a new settlement after talks with Mr.
Weiss fell apart has now subjected Mr. Biden to the perils of two criminal
proceedings in two jurisdictions, with unpredictable outcomes.
Many of the
facts laid out in Thursday’s indictment were already widely known, and the
litany of Mr. Biden’s actions tracks closely with a narrative he drafted with
prosecutors in the plea deal that collapsed over the summer under the withering
scrutiny of a federal judge in Delaware.
Prosecutors
said that he “subverted the payroll and tax withholding process of his own
company,” Owasco PC, by withdrawing millions from the coffers that he used to
subsidize “an extravagant lifestyle rather than paying his tax bills.” They
also accused him of taking false business deductions.
Mr. Weiss
called out Mr. Biden for failing to pay child support and his reliance on
associates, including the Hollywood lawyer Kevin Morris, to pay his way.
Prosecutors included a chart that tracked the cash he siphoned from Owasco’s
coffers — $1.6 million in A.T.M. withdrawals, $683,212 for “payments — various
women,” nearly $400,000 for clothing and accessories, and around $750,000 for
restaurants, health and beauty products, groceries, and other retail purchases.
Throughout
the document, Mr. Weiss presented an unflattering split-screen of Mr. Biden,
scooping up millions in income and gifts from friends while stubbornly refusing
to pay his taxes. That pattern even persisted into 2020, after he had borrowed
money to pay off his tax liabilities from the previous few years, prosecutors
wrote.
“Defendant
spent $17,500 each month, totaling approximately $200,000 from January through
Oct. 15, 2020, on a lavish house on a canal in Venice Beach, Calif.,” they
wrote, adding that “the I.R.S. stood as the last creditor to be paid.”
In a
statement, Abbe Lowell, Mr. Biden’s lawyer, said Mr. Weiss had “bowed to
Republican pressure” and accused him of reneging on their previous agreement.
He said the special counsel had not responded to his request for a meeting a
few days ago to discuss the details of the case.
“If
Hunter’s last name was anything other than Biden, the charges in Delaware, and
now California, would not have been brought,” he said.
The
indictment includes a more detailed description of Mr. Biden’s activities and
tangled business deals than the government had previously made public. Taken in
its totality, the filing paints a damning portrait of personal irresponsibility
by a man who leveraged his last name to finance his vices while willfully
ignoring his tax liabilities.
The Hunter
Biden case sits at the crowded intersection of America’s colliding political
and legal systems. There is now a very real prospect that President Biden’s son
will be defending himself in two federal criminal trials during a presidential
election year — as Mr. Trump, his father’s likely opponent, confronts the
possibility of two federal criminal trials in his classified documents and
election interference cases.
The
additional charges come on the cusp of a vote by the Republican-led House to
formalize its impeachment inquiry into President Biden, which is largely based
on unsubstantiated allegations that he benefited from his son’s lucrative
consulting work for companies in Ukraine and China.
Republican
leaders in the House released draft text of a procedural impeachment resolution
against President Biden on Thursday, just hours before word of the new charges
started to percolate through official Washington. It is not clear what effect
the indictment will have on their inquiry.
The
indictment contains no reference to President Biden. But prosecutors pointed
out that Hunter Biden’s compensation from Burisma, a Ukrainian energy company,
dropped from $1 million a year in 2016, when his father was still in office, to
$500,000 in March 2017, two months after he left office.
The
decision to indict the president’s troubled son was an extraordinary step for
Mr. Weiss, who was named a special counsel in August by Attorney General
Merrick B. Garland.
The Justice
Department has been investigating Mr. Biden since at least 2018. Despite
examining an array of matters — including Hunter Biden’s work for Burisma, ties
to oligarchs and business deals in China — the investigation ultimately
narrowed to questions about his taxes, like his failure to file his 2017 and
2018 returns on time, and the gun purchase.
The
investigation appeared to have come to a conclusion in June when Mr. Weiss and
Mr. Biden’s lawyers announced that Mr. Biden would plead guilty to two
misdemeanor tax charges.
As part of
the deal, prosecutors charged Mr. Biden with lying about whether he was using
drugs but, under a so-called pretrial diversion agreement, agreed not to
prosecute Mr. Biden on that. In return, Mr. Biden agreed to admit that he had
used drugs at the time of the purchase and the deal remained contingent on him
remaining drug free for the next two years.
But the
deal abruptly imploded.
At a
hearing in July, Judge Maryellen Noreika of the Federal District Court in
Wilmington, Del., sharply questioned elements of the deal, telling the two
sides repeatedly that she had no intention of being “a rubber stamp.”
One
objection centered on a provision that would have offered Mr. Biden broad
insulation against further prosecution on matters under scrutiny during the
federal inquiry. Mr. Weiss’s prosecutors and Mr. Biden’s lawyer at the time,
Christopher J. Clark, disagreed on whether that shielded him from being
prosecuted in connection with his foreign business dealings.
The other
objection had to do with the diversion program on the gun charge, under which
the judge would play a role in determining whether Mr. Biden was meeting the
terms of the deal.
Judge
Noreika said she was not trying to sink the agreement, but to strengthen it by
ironing out ambiguities and inconsistencies. But by the end, the sides had
splintered, prosecutors filed paperwork indicating they would proceed with a
prosecution and the embattled Mr. Weiss requested to be named special counsel,
which requires him to file a report at the conclusion of the investigation.
Since
taking control of the House in January, top Republicans have used their new
investigative power to push the narrative that the president has been complicit
in an effort engineered by Hunter Biden to enrich his family by profiting from
their positions of power, especially through business and investment
transactions abroad.
The
investigation has become a central focus of House Republicans, and of Mr.
Trump, who has seized upon it as a counter to his own legal woes. Earlier this
year, two former I.R.S. agents who worked on the investigation testified before
a House committee that they had been discouraged from fully investigating
interactions of Hunter Biden and his father, and that Mr. Weiss had complained
that he did not have the authority to expand the investigation to other
jurisdictions.
Mr. Weiss
denied those claims.
On
Thursday, Representative James R. Comer of Kentucky, the chairman of the House
oversight committee, credited the “two brave I.R.S. whistle-blowers” for
forcing Mr. Weiss to abandon plea negotiations and file charges.
“The
Department of Justice got caught in its attempt to give Hunter Biden an
unprecedented sweetheart plea deal,” Mr. Comer said in a statement, adding that
the men should be applauded “for their courage to expose the truth.”
Luke
Broadwater and Kenneth P. Vogel contributed reporting.
Glenn
Thrush covers the Department of Justice. He joined The Times in 2017 after
working for Politico, Newsday, Bloomberg News, The New York Daily News, The
Birmingham Post-Herald and City Limits. More about Glenn Thrush
Michael S.
Schmidt is an investigative reporter for The Times covering Washington. His
work focuses on tracking and explaining high-profile federal investigations. More
about Michael S. Schmidt
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