Hunter Biden under tax investigation in Delaware 1:16
After being silent in the months leading up to the election, US federal authorities are now actively investigating Hunter Biden's business dealings, a person with knowledge of the investigation said.
His father, President-elect Joe Biden, is not implicated.
Now that the elections are over, the investigation is entering a new phase.
Federal prosecutors in Delaware, working with the IRS criminal investigation agency and the FBI, are taking blatant steps such as issuing subpoenas and seeking interviews, the source said.
The activity in the investigation was conducted undercover in recent months due to Department of Justice guidelines prohibiting overt actions that could affect an election, the person said.
Hunter Biden, son of Joe Biden, says he is under tax investigation
CNN reached out to Biden's attorney and the campaign this week seeking comment on the investigation.
On Wednesday, they issued a statement acknowledging the investigation.
“Yesterday I learned for the first time that the US Attorney's Office in Delaware informed my legal counsel, also yesterday, that they are investigating my tax matters.
I take this matter very seriously, but I am confident that a professional and objective review of these matters will demonstrate that I handled my affairs legally and appropriately, including with the benefit of professional tax advisers, ”Hunter Biden said in a statement.
Investigators have been examining multiple financial matters, including whether Hunter Biden and his associates violated tax and money laundering laws in business in foreign countries, primarily China, according to two people briefed on the investigation.
Some of those transactions involved people who, according to the FBI, raised counterintelligence concerns - a common problem when it comes to Chinese companies, according to another source.
The investigation began in 2018, prior to the arrival of William Barr as US Attorney General, two people briefed on the investigation said.
The existence of the investigation will represent immediate proof of Biden's promise to maintain the independence of the Justice Department.
Sinclair Broadcast Group reported in October that the FBI had opened a criminal investigation into Hunter Biden.
CNN has learned new details about the scope of the investigation, including that it focuses on China.
A mysterious computer
The leads from the investigation came after President Donald Trump's personal attorney, Rudy Giuliani, helped orchestrate news stories centered on a laptop that allegedly belonged to Hunter Biden and was said to include his business documents and other personal material. .
The FBI took possession of the laptop in late 2019, according to a computer repairman in Delaware who showed reporters a copy of a subpoena.
The subpoena is real, according to people briefed on the matter, but the FBI and Delaware prosecutors have declined to confirm the existence of the investigation.
It is unclear if the contents of the laptop are relevant to the ongoing federal investigation and even if investigators can use it, given possible chain of custody requirements for evidence.
CNN previously reported that at least some of the information Giuliani claims came from the laptop appears similar to information others shared last year in Ukraine, according to a witness who was approached by the FBI for information.
Giuliani's efforts to unearth damaging information about the Bidens in Ukraine last year were at the center of Trump's impeachment.
The current investigation into Hunter Biden appears to predate those efforts.
The involvement of Trump's lawyers in the news published about Biden's alleged laptop sparked a flurry of activity from Republican lawmakers and the Trump campaign seeking to amplify allegations of corruption ahead of the election.
The FBI met with a former Hunter Biden business associate who made public statements about possible wrongdoing.
The FBI released a statement at the time saying that "as a general matter, when contacted, the FBI reviews public information for any violation of applicable federal laws."
The political implications of the investigation have already been a problem in recent months for Barr, who was under public pressure from Trump to turn Hunter Biden's business activities into an electoral issue.
To date, the investigation does not involve allegations of wrongdoing by the president-elect, according to the two main sources briefed on the matter.
Barr has publicly said that Biden Sr. was not being investigated, despite a public campaign by Trump urging Barr to announce a corruption investigation of the two Bidens.
A focus on China
Investigators appear to be focused on Hunter Biden's business activities related to China.
Some of his business in the Asian country is publicly known through interviews and documents published in September by Senate Republicans in the Finance Committee and the Committee on National Security and Government Affairs.
After his father stepped down as vice president in 2017, Hunter Biden worked toward a deal with CEFC China Energy to invest in U.S. energy projects, according to documents released by Republicans.
At least one of the issues investigators have examined is the gift, in 2017, of a 2.8-carat diamond Hunter Biden received from CEFC founder and former chairman Ye Jianming after a business meeting in Miami, he said. a person informed about the matter.
In 2019, Biden provided the New Yorker magazine with an account of Ye's diamond reception.
He told the magazine that he was uncomfortable receiving the diamond and gave it to other associates, and that he does not know what they did with it.
I knew it wasn't a good idea to accept it.
I felt it was strange, "he said in his interview with the New Yorker.
Hunter Biden told the magazine that the CEFC deal fell through and that he did not consider Ye to be a shady character.
Later, Chinese authorities detained Ye, amid Chinese media reports of corruption allegations against him.
In the interview with the magazine, Hunter Biden made public the account of his personal struggles, including substance abuse and the breakdown of his marriage.
During the divorce proceedings, his ex-wife's attorneys cited a diamond that Biden had received and suggested it was worth $ 80,000.
Biden told the New Yorker it was worth about $ 10,000.
Receiving such a gift could have potential tax implications for Biden and in his interview with the New Yorker he does not describe how he dealt with the problem thereafter.
Sources tell CNN that investigators have been looking into whether Biden properly reported his income for tax purposes over a period of time.
While the diamond was initially part of the investigation, it is unclear whether the gift is still part of the researchers' focus.
Hunter Biden then briefly acted as attorney to represent Patrick Ho, who ran a CEFC-backed organization, and who was convicted in 2018 of paying millions of dollars in bribes to officials in Chad and Uganda to benefit CEFC's energy projects there. countries.
Ho was sentenced to a federal prison term of three years.
He has since been released and is back in Hong Kong, his lawyer said.
Hunter Biden had been involved in a previous Chinese business venture that raised concerns in the Obama White House and Joe Biden's staff, according to the New Yorker.
In 2013, Hunter Biden became involved with American and Chinese partners who were creating an investment fund called BHR Partners for deals outside of China.
Hunter Biden was an unpaid member of the BHR board and took an equity stake after his father stepped down as vice chairman, New Yorker reported.
Challenge for a new president
In an interview with CNN's Jake Tapper last week, President-elect Biden vowed to maintain an independent Justice Department free from political influence.
I'm not going to tell you what to do and what not to do.
I'm not going to tell you, go prosecute A, B or C, ”Biden said.
"That's not the paper, it's not my Justice Department.
It's the people's Justice Department. "
"The person or people you choose to run that department will be people who will have the independent ability to decide who will be prosecuted and who will not," Biden said.
Republicans in Congress are almost certain to use the existence of the investigation to further their argument that Hunter Biden's activities in China are a sign of his father's conflict of interest when it comes to dealing with foreign policy with Beijing.
This is also likely to be an issue Biden's attorney general will have to face during a Senate confirmation hearing.
Trump faced a similar, but much more thorny problem after taking office in 2017 when his then Attorney General Jeff Sessions quickly had to refrain from overseeing the federal investigation of Trump's campaign and possible links to Russian interference. in the 2016 elections.
Sessions was part of the president's election campaign and held meetings with the then Russian ambassador, which became part of the FBI investigation.
The likely Biden attorney general candidates are not known to have such entanglements.