Hunter Biden pleads not guilty in tax-evasion case

Prosecutors’ allegations likely to be tested at trial as President Biden campaigns for re-election.

Hunter Biden and his lawyer Abbe Lowell attend a House oversight committee meeting in Washington on Wednesday. Picture: AFP

Hunter Biden pleaded not guilty on Thursday to charges he evaded taxes on millions of dollars in income from foreign businesses, one of two federal prosecutions that will keep his legal woes in the public eye while his father campaigns for re-election.

Not that the younger Biden is avoiding the limelight: On Wednesday, he had made a surprise visit to Capitol Hill, where he watched from the gallery of a House hearing room as Republican lawmakers moved toward holding him in contempt of Congress. As he looked on beside his lawyer, one lawmaker declared that Hunter Biden should be “arrested right here, right now, and go straight to jail.”

President Joe Biden’s son entered his plea before U.S. District Judge Mark C. Scarsi, appointed to the bench by former President Donald Trump. Scarsi set the trial to begin June 20. The schedule sets the stage for criminal proceedings against the younger Biden during critical months of his father’s re-election bid.

The hearing marked Hunter Biden’s first court appearance in response to a nine-count indictment last month alleging he “engaged in a four-year scheme to not pay at least $1.4 million in self-assessed federal taxes.” Prosecutors also say Hunter Biden claimed illegal deductions to evade taxes for 2018.

In the indictment, federal prosecutors cast the younger Biden as a privileged, Yale-educated lawyer who leveraged his last name to bankroll an indulgent, freewheeling lifestyle of drugs, escorts, luxury hotels and exotic cars without paying what he owed to the Internal Revenue Service.

A Department of Homeland Security police K-9 unit checks out a bag outside the Los Angeles courthouse where Hunter Biden pleaded not guilty to tax fraud charges. Picture: AFP

The indictment’s three felony charges center on 2018, a year in which prosecutors said Hunter Biden “continued to earn handsomely and to spend wildly.” Prosecutors alleged that in 2020, as Biden worked with an accounting firm to prepare his 2018 tax return, he claimed personal costs as deductible business expenses, improperly lowering what he claimed to owe the IRS. Among the fraudulent write-offs, prosecutors said, were payments to escorts and exotic dancers, along with a $US30,000 payment for his daughter’s law-school tuition.

Hunter Biden was previously charged in Delaware with federal gun offenses related to his purchase of a handgun in 2018, during a period in which he was using illegal drugs and was prohibited from owning a firearm. The younger Biden, who has publicly acknowledged struggles with addiction, said at a court hearing last summer that he hasn’t used drugs or alcohol since June 2019. He pleaded not guilty to the gun charges in early October.

Both the gun and the tax cases were brought by a special counsel, David Weiss, who started overseeing the investigation into Biden in 2018 as the Trump-appointed U.S. attorney in Delaware. After five years examining Hunter Biden’s foreign business dealings, including his work for the Ukrainian energy firm Burisma, Weiss reached a plea agreement last summer with the president’s son in which he was set to admit to a pair of misdemeanor tax charges and avoid prosecution on a gun charge.

But the plea deal collapsed in a July court hearing as prosecutors and Biden’s legal team disagreed over the extent of immunity it granted the president’s son from possible future charges. Weiss received special-counsel status in the aftermath of the hearing, a move that formally handed him additional autonomy from Biden-appointed Justice Department leaders.

Republican lawmakers have made the tax prosecution a centerpiece of their potential impeachment of President Biden. Last year, in testimony before House lawmakers, two IRS agents said the Justice Department had slow-rolled and stymied the investigation into the president’s son. The agents also testified that Weiss had been blocked from bringing charges in Washington and in Los Angeles. Weiss denied the claims.

Trump, who faces criminal charges of his own in two separate federal cases, has also seized on Hunter Biden’s cases. When Weiss reached the since-dissolved plea deal, Trump called the prosecutor a coward on social media and said he “gave out a traffic ticket instead of a death sentence.” On Capitol Hill, Republicans slammed the agreement as a “sweetheart deal.” Republicans later hailed Hunter Biden’s indictment on tax charges. Rep. James Comer (R., Ky.), chair of the House Oversight Committee, credited the IRS agents, saying their testimony “forced the hand of prosecutors.”

Hunter Biden faces up to 17 years in prison on the tax charges, Justice Department officials said, although convicted criminal defendants typically receive a fraction of the maximum penalty.

In response to the indictment, Biden’s lawyer Abbe Lowell said last month that Weiss had bent to pressure from Republicans with his decision to “renege” on the plea deal, in which the president’s son was set to admit to failing to pay his taxes in 2017 and 2018. Lowell noted that Biden paid back his taxes in the course of the five-year investigation led by Weiss.

“Based on the facts and the law, if Hunter’s last name was anything other than Biden, the charges in Delaware, and now California, would not have been brought,” Lowell said.

In the indictment, prosecutors detailed a period of Hunter Biden’s life in which they said he spent extravagantly while knowingly ignoring his tax obligations. Prosecutors said Hunter Biden chose not to pay his taxes even when he could afford to cover some or all of them — and even after he regained his sobriety.

In 2020, for instance, he received more than $US1.2 million in financial support from a friend but used it to “pay various personal expenses but not any of his federal individual income tax liabilities for 2016-2019.” The financial support included hundreds of thousands of dollars in payments for housing, media relations, accountants, lawyers and his Porsche. For housing, he spent $US17,500 each month, totaling approximately $US200,000 from January through mid-October 2020, “on a lavish house on a canal in Venice Beach, California,” prosecutors said.

“In each year in which he failed to pay his taxes, the Defendant had sufficient funds available to him to pay some or all of his outstanding taxes when they were due. But he chose not to pay them,” prosecutors said.

The IRS, prosecutors added, “stood as the last creditor to be paid.”

Richard Rubin contributed to this article.

The Wall Street Journal