Hunter Biden’s criminal case: What IRS whistleblowers said about Joe Biden, DOJ

Editor’s note, July 21: The second unidentified whistleblower described in this story has since come forward publicly as Joseph Ziegler. He testified July 19, 2023 before the House Oversight and Accountability Committee.

An IRS agent who oversaw a criminal investigation into Hunter Biden has testified to a House committee that the Justice Department slow-walked the case and gave Biden preferential treatment because he is President Joe Biden’s son.

Gary Shapley, a longtime FBI agent, gave detailed testimony May 26 to the Republican-controlled House Ways and Means Committee. His testimony, which was made public June 22, alleges that Justice Department officials stonewalled the case by thwarting investigative steps, including search warrants. 

"I am blowing the whistle because the Delaware U.S. Attorney's Office, Department of Justice Tax (Division), and Department of Justice provided preferential treatment and unchecked conflicts of interest in an important and high-profile investigation of the President's son, Hunter Biden," Shapley testified, according to a transcript. 

A second IRS official who worked for Shapley and initiated the investigation, but whose name was redacted, echoed Shapley’s account in testimony to lawmakers.

The testimony became public shortly after Justice Department officials offered Hunter Biden a deal to plead guilty to two misdemeanor tax charges. Prosecutors are recommending a sentence of probation, and a "diversion" program on a gun-related charge that is available to nonviolent offenders with substance abuse problems. The agreement was scheduled to go before a judge July 26.

Republicans have portrayed the plea agreement as a "sweetheart deal" that would let the president’s son avoid prison time. They pointed to Shapley’s testimony as evidence that Delaware U.S. Attorney David Weiss could have pushed harder to prosecute felony charges that IRS officials recommended.

Democrats countered that it’s common for prosecutors to seek plea deals rather than take complex cases to trial, especially if they involve complicating factors such as drug addiction, as was the case with Hunter Biden. President Donald Trump appointed Weiss, they argued, and many of the events occurred while Trump was president. Legal analysts, meanwhile, pointed to past cases to suggest that similar charges might not even be brought against a lower-profile defendant.

Here’s what most experts agree upon: Prosecuting a defendant connected to a high-ranking government official poses unique challenges.

Still, Joan Meyer, a former federal prosecutor who is now a partner with the Thompson Hine law firm, said the whistleblower’s testimony raises pointed questions that merit further inquiry. The testimony is "very detailed with supporting documents," she said. "It includes lots of names and specific detailed information."

Here’s a primer on the whistleblower testimony.

Shapley has been an IRS agent since 2009. In January 2020, he became the supervisor of the Hunter Biden case, which was code-named "Sportsman."

Shapley’s legal team is Empower Oversight Whistleblowers & Research, a group founded by Jason Foster, a former aide to Sen. Chuck Grassley, R-Iowa. Three other members on its leadership team used to work for Grassley, including Dean Zerbe, the second whistleblower’s attorney.

The unnamed whistleblower joined the IRS in 2010.

The investigation into Hunter Biden was opened in November 2018 as an offshoot of an IRS investigation into a pornography platform. According to the unnamed whistleblower, bank records identified Hunter Biden as "paying prostitutes related to a potential prostitution ring." They also showed evidence that he was "living lavishly through his corporate bank account."

The second whistleblower testified that his then-supervisor told him he’d have to show much more evidence to begin a case against "a political family." He said it took three attempts before his manager allowed him to send a criminal tax initiation package to the Justice Department’s Tax Division for review.

After Biden became the presumptive Democratic presidential nominee in April 2020, Shapley testified, "career DOJ officials dragged their feet" on the IRS taking investigative steps.

Shapley said Lesley Wolf, an assistant U.S. Attorney in Delaware, said in September 2020 that there was more than enough probable cause to secure a search warrant on Joe Biden’s Delaware guest house, where Hunter was staying. But she raised concerns about "optics" and said the warrant wouldn’t get approved. Months later, a second search warrant was also thwarted, Shapley said.

When federal officials planned to show up at Hunter Biden’s residence in Los Angeles, FBI headquarters alerted the Secret Service headquarters and the Biden presidential transition team, Shapley said. Shapley said he didn’t interview Hunter Biden – instead his attorney reached out to federal officials.

The second whistleblower also recalled wanting to interview Joe Biden’s grandchildren about expenses listed on Hunter Biden’s tax deductions. But the whistleblower said Wolf nixed that idea in October 2021 on grounds they would get into "hot water" if they did.

Then, in a January 2022 report, the IRS recommended felony charges against Hunter Biden for tax evasion and filing a false tax return for tax years 2014, 2018, and 2019, Shapley said, and misdemeanor charges for failing to pay taxes for multiple years. However, some senior IRS leaders disagreed with the charges, and the recommendation stalled.

Both whistleblowers said their team was eventually cut out of the Hunter Biden investigation at the Justice Department’s request.

Hunter Biden’s lawyer has said it was "preposterous" to say the investigation cut him any slack, adding, "Any verifiable words or actions of my client, in the midst of horrible addiction, are solely his own and have no connection to anyone in his family."

Shapley said Weiss, the Delaware-based prosecutor, sought special counsel status, which would have provided a layer of insulation from Justice Department officials. Weiss also sought to have charges brought in Washington D.C., arguing that tax charges are supposed to be filed where taxpayers live or file their taxes, Shapley said. But the department denied Weiss’ proposal, Shapley said.

Shapley described an Oct. 7, 2022, meeting between senior-level managers from the IRS, FBI and prosecutors at the Delaware U.S. attorney's office that became a "red line" for him.

According to Shapley, Weiss said the U.S. Attorney Matthew Graves, would not allow Weiss to charge Biden in his Washington, D.C., district for the 2014-15 years. (Graves, unlike Weiss, was a Biden appointee.)

That was pivotal, because the statute of limitations was set to expire in one month. 

"I expressed to United States Attorney Weiss several concerns with how this case had been handled from the beginning," Shapley said. "The meeting was very contentious and ended quite awkwardly."

Weiss disputed this account in a June 7 letter to House Judiciary Chairman Jim Jordan, R-Ohio. Weiss said Attorney General Merrick Garland granted him "ultimate authority" over the investigation, "including responsibility for deciding where, when, and whether to file charges."

Garland has also disputed the whistleblower’s account, testifying in March to Grassley that Weiss "had been advised that he has full authority to make those referrals you're talking about or to bring cases in other districts if he needs to do that." 

The U.S. Attorney’s office in Delaware declined to comment to PolitiFact. Spokespeople for the U.S. attorney in Washington, D.C., and for the Central District in California referred PolitiFact back to Garland’s statements.

Both whistleblowers mentioned Joe Biden periodically in their testimony, but some of the evidence is difficult to decipher because it lacks details.

Some examples:

• Shapley testified that the IRS obtained a WhatsApp message dated July 30, 2017, from Hunter Biden to Chinese businessman Henry Zhao. PolitiFact has not seen the WhatsApp message directly, but according to Shapley, Hunter Biden wrote, "I am sitting here with my father and we would like to understand why the commitment made has not been fulfilled. … I am sitting here waiting for the call with my father."

What the "commitment" was, and whether Joe Biden was present, are unclear. Prosecutors raised such concerns when this evidence was presented.

The White House told PolitiFact that President Biden had no recollection of what was described in Shapley’s recounting.

• The second whistleblower said Hunter Biden deducted on his taxes two nights of hotel room stays for his father in California in 2018. 

• The IRS shared with prosecutors its plan to interview Hunter Biden's associate, Rob Walker, hoping to ask Walker about an email that said: "Ten held by H for the big guy." It’s not clear who the email was to. Shapley said they wanted to ask who the "big guy" was, but that Wolf said in a Dec. 3, 2020, meeting that she did not want to ask about the "big guy" and did not want to ask questions about "dad."

Agents interviewed Walker and tried to skirt Wolf’s direction, Shapley said. Walker said Biden, then the former vice president, showed up at a Four Seasons meeting of CEFC Infrastructure Investment U.S. LLC., a company linked to Hunter Biden. According to excerpts included in the transcript, Walker told agents that Joe Biden "just said hello to everybody. I don’t even think he drank water. Hunter Biden said, 'I may be trying to start a company or try to do something with these guys and could you?' And I think he was like, if I'm around and he'd show up."

• Shapley said agents had "guidance provided by the prosecutors on a recurring basis to not look into anything related to President Biden."

The Wall Street Journal reported in 2020, citing unnamed people familiar with the matter, that Joe Biden never received money from the company or completed any deals.

Ian Sams, a White House spokesperson, told PolitiFact, "As we have said many times before, the president was not in business with his son" and added that the White House has not been involved in the investigation.

Legal experts cautioned against assuming the whistleblowers are fully correct. A full understanding of the government’s handling of the case can emerge only with a wide examination of evidence, such as emails, texts and testimony from other participants who may have seen the same events from a different perspective.

But it’s not uncommon in major prosecutions to have different players wanting to pursue different approaches, said Mark Osler, a University of St. Thomas law professor.

"Members of a prosecution team often disagree about charging and investigation," Osler said. It’s "very common," he said, for "investigators to want a higher charge than the prosecutors. The prosecutor will usually win out if they have the will."

Osler said it might have been wise for the Justice Department to have appointed a special prosecutor in this case.

"We can't pretend that everyone can effectively ignore the implications of a president's son being in serious legal trouble," Osler said.

Meyer, the Thompson Hine law partner, agreed. "It would be almost impossible as a United States Attorney to be free of the political influence of any administration when you are investigating the son of the president."

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