The Senate’s report on Hunter Biden’s activities released several months ago, which was spun by the New York Times as having shown “no evidence of wrongdoing,” nevertheless had several important gaps in the business activities of the troubled son of the former vice president.
Draft legal documents and 2017 bank records obtained by The American Conservative show at least $5 million was transferred to Hunter and Jim Biden from companies associated with the Chinese conglomerate CEFC, with millions coming after the company had come under legal scrutiny both in the United States and China.
CEFC official Patrick Ho was arrested in November 2017 and charged by the Southern District of New York with corruption, and was convicted last year. In addition, on or about March 1, 2018, CEFC Chairmen Ye Jianming was arrested in China for economic crimes and hasn’t been seen since. CEFC assets in China were seized by Chinese state agencies. In the U.S., major beneficiaries were Hunter and Jim Biden.
What the following documents show is that as regulators moved to seize CEFC’s assets, Hunter Biden attempted to take control of the company founded in partnership with it. Instead, after striking a deal with two CEFC employees in the U.S., the funds were disbursed over the next six months to his and his uncle’s companies until it was all gone, in total at least $5 million.
2017 Bank Records
On August 5, 2017, the Bidens and CEFC entered into a 50-50 limited liability company agreement (Hudson West III) between Owasco, Hunter Biden’s company, and Hudson West V (CEFC). The Sep 22, 2020 report from the Senate Judiciary Committee (the “HGSAC Report”) surmised an agreement like this, but a copy can be seen, for the first time here. In early 2017, CEFC was ranked as one of the top 500 corporations in the world.
Hudson West III set up two bank accounts with Cathay Bank, with the first set up on or about August 5. A company associated with CEFC deposited $5 million into the account on August 8; no contribution was made by the Bidens. On Nov 2, 2017, CEFC Limited deposited a further $1 million into the account. (Subsequently, the Hudson West III account shows a wire of $1 million back to CEFC Limited on Nov 21, followed a few days later on Nov 27 by a credit memo for $999,938. The HGSAC Report interpreted the Nov 21 wire transfer as a return of the $1 million, but appear to have omitted consideration of the credit memo apparently reversing the return). The net result is that CEFC and its affiliates deposited almost exactly $6 million into Hudson West III in 2017.
In the 5 months between August 8 and Dec 31, 2017, Hudson West III disbursed almost $1.6 million to Owasco (Hunter Biden) in wire transfers and credit card binges by the Bidens. The transfers appear to have been structured as $165,000 in monthly payments, plus two other payments of $400,000 and $220,387.
The HGSAC Report reported on the $99,000 credit card spree by the Bidens in early September 2017, but, in addition to that spree, there was an additional $77,700 in credit card sprees, making a total of $176,700 for the five month period.
Total expenditures by Hudson West III in the five months were $1,947,439, of which $1,522,000 went to the Bidens (via Owasco and credit cards). Hudson West III bank accounts contained more than $4 million in cash at the end of 2017.
March 2018 Deal
Shortly after the arrest of CEFC Chairman Ye Jianming on March 1, 2018, there appears to have been a rolling seizure of CEFC assets. Even with the profligate spending by the Bidens, Hudson West III would still have had about $3.5 million in cash in March.
On March 26, a Chinese-American employee who was fiercely loyal to Hunter suggested to him that Hunter and the two CEFC employees in the U.S. (Mervyn Yan and Kevin Dong) figure out a way to appropriate the Hudson West III cash before it was frozen by Chinese regulators or receivers:
you guys (You/Mervyn/Kevin) figure out a way to have the money transferred to the right U.S. account before any restriction levied by Chinese regulators or appointed new boss in charge of manage the enterprise Ye left behind.
In fact, Hunter had already begun the process of appropriating Hudson West III cash before a receiver could arrive. On March 18, Hunter’s lawyer sent a letter to Mervyn Yan proposing that Hudson West V (the proximate CEFC entity) assign its interest in Hudson West III to Owasco (Hunter), a transaction which would give control of all the cash to Hunter (see here, and here).
On or about March 30, 2018, Hunter and the two Chinese appear to have worked out a different arrangement. Among the newly available documents are redlined versions of an assignment agreement in which Hudson West V assigned its 50% interest in Hudson West III to Coldharbour Capital Inc., with Kevin Dong the proposed signatory for Hudson West V, Mervyn Yan for Coldharbour Capital and Hunter signatory for Owasco’s consent to the assignment.
The HGSAC Report does not appear to have had access to these documents: they noted that ownership of Hudson West III at some point was 50% Coldharbour, but does not appear to have been aware of the prior ownership of this interest by Hudson West V or the assignment to Coldharbour in late March 2018.
During the next six months, the cash was completely drained into the accounts of Owasco and Coldharbour, spent on consulting fees and expenses. According to the HGSAC Report, total payments from Hudson West III to Owasco amount to an astonishing $4,790,375 by September 2018, when the Hudson West III accounts were totally depleted. In November 2018, Hudson West III was dissolved by Owasco and Coldharbour.
From the 2017 bank records, we know that $1,444,000 had been transferred to Owasco in 2017 (excluding direct payment of credit card sprees); thus, transfers to Owasco in the first eight months of 2018 were approximately $3,345,000.
The assignment of Hudson West V’s interest in Hudson West III to Coldharbour and the dissipation of cash to the Hudson West III managers would probably not have stood up to a determined receiver appointed by the Chinese parent company, but there doesn’t appear to have been any attempt by the parent company to stop or control the dissipation of Hudson West III’s cash reserves.
Lion Hall (Jim Biden) Invoices
Included in the newly available material are invoices to Owasco and, separately, to Hudson West III from Jim Biden doing business as Lion Hall Group. The HGSAC Report stated that, between Aug 14, 2017 and Aug 3, 2018, Owasco sent 20 wires totaling $1,398,999 to Lion Hall Group. The newly available documents show that Jim Biden charged Owasco $82,500 per month as a “monthly retainer for international business development”:
Readers will recall that Hudson West III bank statements showed regular monthly payments of $165,000 for the last 5 months of 2017. The corollary is that Hunter split this regular monthly payment from Hudson West III 50:50 with Jim Biden. The HGSAC Report notes that the payments to Lion Hall Group had been flagged by Owasco’s bank (Wells Fargo) for potential criminal activity. The new documents contain an inquiry email from Wells Fargo compliance, together with a reply from Hunter which was unresponsive on the key compliance questions. By the time that Wells Fargo raised its compliance concerns, the Hudson West III cash had been exhausted and with it, presumably the stream of 50-50 payments to Uncle Jim.
As noted above, in addition to the regular $165,000 monthly payments, Owasco received other large transfers in 2017 and presumably in 2018. It is not known whether Uncle Jim split these 50-50 as well, or whether this was a side transaction by Hunter.
Concurrent with this flood of money from CEFC, Hunter continued to receive a lavish stipend from Burisma. Nonetheless, by the end of 2018, Hunter had hundreds of thousands in tax liens. In March 2019, despite having received millions from Chinese business interests, Hunter even had to plead with former partner Jeffrey Cooper to email him $100 for gas so that he wouldn’t be stranded on the highway.
November 3, 2020 5:01 am