This is Part Two of my recap of the transcribed interview of Gary Shapley, IRS Criminal Investigations Supervisory Special Agent. (Part 1 here) Shapley supervised the investigation of Hunter Biden that started in November 2018. As noted below, Shapley and his Group were cut-out of the investigation — DOJ prosecutors quit communicating with them in October 2022, and in May 2023 the entire Group was removed from the investigation and replaced. Just a couple of weeks after that it was announced that Hunter Biden would be pleading guilty to two misdemeanor tax charges.
Part One of my recap only covered the first 25 pages of his transcribed interview — much of that being Shapley reading his own prepared comments for the staffers who were present. Because Congressional oversight of the IRS falls first to the House Ways and Means Committee, the whistleblower investigation based on Shapley’s reporting is being done by the Majority and Minority staffs of that Committee. Part One is now available for everyone to read.
From March 2022 to October 7, 2022, Shapley was under the impression that the Delaware US Attorney Weiss was still deciding whether to file felony counts for 2014 and 2015. He only found out later from Weiss that the US Attorney for DC, Biden Appointee Matthew Graves, had declined to file charges for 2014 and 2015. He says he was told by Weiss that he sought special counsel status so he could file the case in DC, but his request was denied. Now the statute of limitations for those years has expired.
Shapley is direct and pointed there — “The purposeful exclusion of 2014 and 2015 ….” He did not accept for a single minute that there was any legitimate reason to debate the validity of criminal charges for those two years — he saw the mechanics of how the delays unfolded as a deliberate plan to not have Hunter Biden’s income for those two years scrutinized in a public trial.
The breakdown in the relationship between the Delaware USAO and the IRS investigation group happened after March 2022. Emails and other communications by Agents are commonly requested by prosecutors as those would be discoverable if the Agents were going to testify as witnesses. But the Delaware prosecutors asked for communications between IRS Supervisors — including status reports exchanged between them about the progress of the investigation — which were critical of how the prosecutors had overseen the investigation.
In some of his contemporaneous IRS internal communications Shapley had been blunt in writing about what he saw as DOJ interference with the investigation. For more than two years he had been communicating to his management that DOJ attorneys were acting in an unethical fashion by action/inaction that showed preferential treatment to Hunter Biden. No one from DOJ ever made contact with him about the content of his memos so he assumed they had not read them.
Note: No case was filed as of March 2022 so it is quite unlikely that the DOJ attorneys really wanted these communications for discovery purposes. More likely, the DOJ attorneys had heard — maybe from FBI — that Shapley had been criticizing their decision-making, and wanted to see what was being said about them in the IRS’s internal communications.]
As late as July 29, 2022, the AUSA on the case was still telling the IRS team that charging 2014 and 2015 was still the plan, the only question was timing — before or after the election.
But then the prosecutors — based in Joe Biden’s home state of Delaware — are told in conversations with Hunter Biden’s lawyers if they file felony counts against Hunter for 2014 and 2015 they will be destroying their careers. These are career prosecutors — not political appointees — who are working at this point in the Biden Administration Department of Justice.
Note: Joe Biden is POTUS at this point. The fact that a holdover Trump-appointed U.S. Attorney might take that step made the prospects worse for the line Assistants who would be the one’s left holding the bag going forward. There would be no reason for Weiss to stay after the indictment was returned — the burden would have been on a couple of AUSA’s making $150,000 a year to prosecute the President’s son on felonies with the intent to send him to federal prison — after the President had proclaimed his son’s complete innocence. This is why a Special Counsel should have been appointed by AG Barr when Biden was elected.
It wasn’t until Sept. 2022 that the case for tax years 2016, 2017, 2018 and 2019 was presented to the US Attorney for the Central District of California — Los Angeles. Shapley and the Case Agent again asked to be part of the meeting but their request was denied. On a Sept. 22 telephone conference of the prosecution team, AUSA Wolf said no action of any kind would the taken until after the mid-term elections.
On October 7, 2022, there was a meeting of all the senior management of the IRS, FBI, and USAO who had been working on the Hunter Biden case for almost 4 years at that point. USAO Weiss was present and surprised everyone when he said he did not have final authority on charging decisions regarding Hunter Biden. It was at this meeting that he first communicated to the investigators that DC US Attorney Matthew Graves had declined to charge HB in DC on the 2014 and 2015 felonies.
Weiss added that he had next asked for Special Counsel authority to bring the charges himself, but was denied. Instead he was told to go through the US Attorney in Los Angeles with respect to 2016-2019 and file charges California. If that US Attorney did not approve — and ultimately he did not — then no charges would be filed.
At the direction of Shapley’s supervisor — the SAC who oversaw his Group and who had attended the meeting — Shapley memorialized the events of this meeting in a memorandum, including the comments of US Attorney Weiss. When Shapley forwarded the memorandum to his SAC, he made a note at the end that the SAC should add anything that Shapley omitted. The SAC responded that Shapley had accurately captured what was said.
Shapley stated that because Graves turned down the 2014 and 2015 years, the statute of limitations would be expiring in November — just one month after the Oct. 7 meeting — and those two years would be lost completely. These were the years involving the Burisma income while Joe Biden was VP. The IRS group had worked on this for nearly 4 years, and all the time spent tracking down that evidence would be wasted.
During the Oct. 7 meeting Shapley explained to Weiss all the ways the investigation had been obstructed by lawyers in his office, and the exchanges became contentious and awkward. It was Shapley’s last in-person meeting with Weiss. After this meeting either the regular prosecution team meetings were cancelled or the IRS Group was cut-out of them because there was no IRS involvement after October 2022.
Shapley began to suspect his complaints about the Delaware USAO and DOJ Tax in his internal IRS communications — delivered at DOJ’s request earlier in 2022 — had played a role in the IRS Group being cutout because after the Oct. 7 meeting he was asked to provide to the DOJ all his internal status memos from May to October. He was previously asked for the ones up through May on the basis they would be needed for discovery after the case was indicted. But now in Oct., after the 2014 and 2015 years had been blocked, the DOJ attorneys wanted his status memos from May forward. At that point he was sure it was sure DOJ wanted to know more specifics about his internal complaints about their unethical behavior.
In early Nov. he heard from an FBI Agent working on the investigation that the USAO had asked for similar reports from the FBI during the same time period. The Agent said he had never heard of such a request before from DOJ, and his management refused to produce such records.
In Jan. 2023 he learned that the US Attorney in Los Angeles declined to file for the years 2016-2019. That meant all the tax charges were dead.
NOTE: As noted at the top, Hunter Biden has agreed to plead guilty to misdemeanor tax charges in Delaware — filed by Weiss. A defendant in a criminal case can “waive venue” and agree to have a case resolved in a district other than where the crime took place. The charges to which he has agreed to plead guilty should be filed in California, but HB has agreed to “waive venue” and have them resolved where Weiss can file them without any need for special authority or the agreement of any other DOJ official. Since venue for the firearm charge is in Delaware, it made sense to make it part of the plea agreement — with a “Deferred Prosecution Agreement” which are like Unicorns in federal court. But the real key — and we won’t know until we see the final paperwork — is whether the agreement is what is called “Global” plea, the effect of which is to resolve ALL outstanding criminal allegations including ones never charged or even referenced in the agreement. It resolves all potential charges the Government might be able to bring — even if not specified — as of the date of the guilty plea. I doubt the documents for resolving Hunter’s tax problems will be worded as a global agreement. If they are, impeachment of the AG should begin immediately.
Shapley next goes into the circumstances of his entire Group being removed from the investigation in May 2023, after his attorney wrote a letter to Congress under the Whistleblower statute.
Note: It’s no small matter that Shapley puts his SAC out as the source for this information. That is a SENIOR management official in the IRS CI chain of command. It would take a call from DOJ to someone at the level of an SAC or higher to force this change to happen — and it did happen. Shapley and his IRS Group were removed from the investigation later in May 2023. Remember the IRS is part of the Department of Treasury, not DOJ. These agencies are very territorial, and defend their turf and the right to make their own decisions about how they do their work. It is much easier for DOJ to issue dictates down the chain within DOJ. Doing the same to another Department — particularly into an agency with the “heft” of the IRS — is significant. The call to remove Shapley’s group after four and one-half years of work came from very high up in DOJ in order for it to be carried out.
At this point Shapley ended his prepared comments and the interview became question-and-answer from the members of the Majority and Minority staffs. Unlike the interview of the IRS Case Agent, the staffers showed Shapley numerous documents that they had either obtained on their own, or were among records that Shapley delivered to the Committee when he became a whistleblower.
He described the IRS tax group that he supervises as hand-picked, located across the country, and specializing in international tax crimes.
Note: This is exactly as this Group was described to me. The members of the Group do not share office space. They work together remotely with the individual members spread out around the country, and travel when necessary. The members of the Group apply to join, and selections are merit-based. Only high achievers get selected. Shapley himself is located in Baltimore, and his immediate supervisor is in DC. He spent time working in both offices depending on what he was working on.
Because of the specific nature of the assignment of this Group, they almost always work with attorneys from DOJ Tax, not local US Attorney’s offices. When local US Attorneys offices are brought into cases, it is usually DOJ Tax who does that and handles most of the communications. If the IRS Group recommends prosecution, that goes to DOJ Tax who then evaluates all the evidence and makes a decision whether the case will go forward with criminal charges.
Note: This is an arrangement that is unique to tax cases. DOJ Tax must approve all criminal tax cases before they are filed. The reason for that is to promote consistent application of criminal tax prosecutions across the country, and not have different charging standards in different judicial districts based on varying policies developed by each of the 93 US Attorneys. Other kinds of cases have a wide range of charging considerations, with individual US Attorneys given discretion as to what kinds of enforcement priorities are most important in their districts.
The senior most official at DOJ Tax that he dealt with was Deputy Assistant AG Stuart Goldman. But that was even a bit odd because Goldman was head of DOJ Tax on the civil side, not the criminal side. The criminal position was unfilled at the time the issues arose, so his communications at that level were with Goldman even though he was not a criminal prosecutor.
After the investigation was underway, and attorney from the DOJ National Security Division joined the attorney group. There were 4-5 from FBI participating including one SSA. Having team meetings every two weeks was more than normal, but its as needed on this case given both the FBI and IRS had different cases.
DOJ Tax offers the cases to local USAO. But if USAO says “no” then DOJ Tax takes over and files the case itself. The Referral from his Group that went to DOJ Tax was 8,000 to 10,000 pages long, including all the supporting documents.
The FBI never communicated with his Group the CHS information regarding a Burisma bribe having been paid to Hunter and/or Joe Biden in the 2014-2015 time frame.
The prosecution team was focused on March 2022 as the statute of limitations for the 2014 tax year. So there was a big push to get the Report through DOJ Tax before March 2022. HB’s attorney’s had first been contacted in late 2020, and had agreed to extend the statute of limitations while the two sides engaged in negotiations to try to resolve the case. Two extensions were agreed to that pushed the statute out to Nov. 2022. But once the DC US Attorney declined to file 2014 and 2015 in DC, DOJ Tax decided to let the statute runout rather than seek another extension.
Read more (Consider subscribing to Ship, he defends some of the J6 political prisoners and the money goes to their defense fund)