Hunter Biden’s alleged efforts to write off payments to suspected prostitutes as business expenses caught the attention of investigators at banks and law enforcement agencies.
Documents released last week by the House Ways and Means Committee, as well as separate documents cited in a news report this week, suggest the payments involved large quantities of money and may have entailed paying women to cross state lines for prostitution, a crime in itself.
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A pair of IRS whistleblowers first revealed the allegations of illegal tax deductions involving prostitutes when they spoke to Congress in May about the Hunter Biden investigation. They said two U.S. attorneys appointed by President Joe Biden declined to bring charges against his son despite the evidence that Hunter Biden had improperly listed the payments as business expenses.
The new documents offer details about the payments.
IRS investigators interviewed Jeffrey Gelfound, an accountant who in 2020 appeared to help Hunter Biden prepare his tax returns for several years in which he had failed to file, according to documents released last week by the House Ways and Means Committee.
A Justice Department Tax Division official pressed Gelfound on payments that Hunter Biden appeared to send to an escort.
Gelfound said he never viewed documentation to verify that thousands of dollars Hunter Biden sent via Venmo were actually business expenses.
“I never asked,” Gelfound told investigators.
A heavily redacted excerpt of an interview with at least one woman involved in those transactions appears to show that the payments were for escort services. When Hunter Biden showed a photo of his father and President Barack Obama to one of the women whose services he had procured, she became afraid of him, according to the excerpt.
The interview with Gelfound took place in April 2021 in a conference room in the office building of the U.S. attorney for the Central District of California. At the time, Joe Biden had not yet nominated his pick for a U.S. attorney to oversee that district. He did not do so for more than a year.
Gelfound also told investigators that he did not believe he’d ever asked another client to sign a letter affirming that the information provided to accountants was accurate. Hunter Biden was asked to sign such a letter.
Joseph Ziegler, one of the IRS whistleblowers, had testified about that letter, known as a representation letter, before Congress, telling lawmakers that “the accountants didn't feel comfortable with the information being provided by Hunter.”
“And essentially with this representation letter, [Hunter Biden is] representing that all the income is being reported and all the deductions are being — they're for business nature, and they're being reported properly,” Ziegler said in May of why Hunter Biden was asked to sign the letter.
Investigators spoke to Gelfound again in November 2021, this time at the Delaware U.S. attorney’s office.
During this interview, according to a summary memo, Gelfound said he did not realize Hunter Biden’s daughter attended Columbia University when he signed off on a tax return that wrote off her $30,000 tuition as a business expense.
Notably, Gelfound also told investigators that Hunter Biden had personally gone through his financial documents with a highlighter and pen to handwrite notes about which transactions he wanted to classify as business expenses. That interview focused on the 2018 tax year, but also included discussions about 2016, 2017, and 2019, according to a memo summarizing the interview.
A Suspicious Activity Report filed to the Treasury Department by Hunter Biden’s bank in 2019 flagged millions of dollars in questionable transactions dating back to at least 2014, according to a Daily Mail report this week.
Some of those transactions appeared to be payments to women linked to an Eastern European sex trafficking ring.
IRS and Justice Department officials had focused in on Hunter Biden’s possible violations of the Mann Act, a law that criminalizes the transport of prostitutes over state lines, by the fall of 2020.
Prosecutors from Delaware U.S. Attorney David Weiss’s office and Justice Department officials discussed “some, but not all” of the documents they’d uncovered in October 2021 that appeared to show Hunter Biden paying for escorts’ travel to see him.
By September 2021, investigators had gathered enough evidence to start pursuing interviews with women they believed to be prostitutes, according to emails released last week.
“Some of these individuals could be prostitutes (some are even his prior employees), and locating them could be a challenge,” Ziegler wrote to other members of the investigative team from the IRS and FBI. He was referring to witnesses he was preparing to interview at the time.
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Other IRS documents indicate that the sprawling Hunter Biden investigation may never have been opened without payments to an alleged prostitute.
IRS agents stated in a December 2020 document that the agency opened its investigation into Hunter Biden after combing through the books of a British amateur pornography website that had unpaid taxes in the U.S. That pornography company had failed to pay taxes on payments it sent to an alleged escort, and IRS agents ultimately discovered that Hunter Biden had made payments to the same woman.