DOJ looked at transactions linked to Jim Biden as part of criminal investigation

Federal investigators in South Florida recently probed transactions linked to Jim Biden as part of a criminal investigation, according to two people familiar with the matter. The investigation remains open, according to one of them.

Meanwhile, Justice Department officials prosecuting an ongoing Medicare fraud case in Pennsylvania were seeking information about the activities of President Joe Biden’s brother as recently as last year, according to a third person familiar with that case. All three were granted anonymity to discuss sensitive matters.

The revelations add to the potential legal minefield surrounding the first family at a time when House Republicans are pursuing an impeachment inquiry aimed at the Biden family’s business dealings and Hunter Biden faces federal tax charges in California and gun charges in Delaware.

Both investigations have scrutinized a troubled hospital chain, Americore, that Jim Biden worked with in the years after President Joe Biden left the Obama administration.

In Pennsylvania, where a health care entrepreneur has pleaded guilty to his role in the alleged fraud scheme, prosecutors say an Americore hospital received tens of millions of dollars in improper Medicare reimbursements.

In Florida, the dealings said to be under investigation were part of an effort by Jim Biden and his business partners to land investments from sources in the Middle East to finance Americore and other ventures in the U.S.

Investigators in Florida sought information about an agreement that Jim Biden was a party to, according to one of the people familiar with that case. They have also focused on a series of loans made to Americore by an investment fund run by a Jim Biden associate, according to the other. Jim Biden told Congress last month that he was paid to arrange some of those loans.

But a previously unreported lawsuit alleges that the payments Jim Biden received were improper. In a complaint filed in Palm Beach County in 2022, investors in the Third Friday Total Return Fund allege that the money manager in charge of the fund looted millions of dollars from it by making sham loans to Americore, then diverted roughly $600,000 of the embezzled funds to Jim Biden.

Jim Biden transferred $200,000 of the disputed money to Joe Biden in a transaction that he and the White House have said was a loan repayment.

Several of the loans have an additional, previously unreported, link to the Bidens. An email obtained by POLITICO shows that a lawyer who has worked for Jim and Hunter Biden, George Mesires, represented the lender in some of the transactions being scrutinized. Mesires did not respond to requests for comment.

Jim Biden is not named as a defendant in the Palm Beach suit, and it is not clear whether his activities are a focus in either criminal investigation.

The White House referred a request for comment to Jim Biden’s representatives. Through a spokesperson, Jim Biden’s lawyer, Paul Fishman, said “Jim Biden is not being investigated by federal law enforcement in Florida or Pennsylvania,” and that he was unaware of any ongoing or recent executive branch investigations of his client. He did not respond to a follow-up question about how he knows that Jim Biden is not being investigated in the Florida or Pennsylvania cases.

The South Florida Office of the Justice Department declined to comment, and the Western Pennsylvania office did not respond to a request for comment.

Jim Biden’s foray into the health care business, which picked up in the months after his brother left the vice presidency in 2017, was the subject of a recent POLITICO investigation. It found that Jim Biden leveraged President Joe Biden’s name to promote the hospital chain, Americore, and that several members of the former vice president’s inner circle worked for the company or participated in meetings with its representatives in the years leading up to his 2020 presidential run. The investigation did not find that Joe Biden involved himself in the company.

As part of the venture, Jim Biden worked with a group of Florida-based business partners to seek investments for Americore and other companies from sources in the Middle East.

But Americore did not receive the investment funding that its executives expected. The company went bankrupt in 2019, and has been at the center of legal and political controversies ever since.

‘A brazen scheme’ in Florida

In 2017, Jim Biden began working with a money manager and a business development entrepreneur based in South Florida in an effort to land tens of millions of dollars to invest in the U.S. health care sector, POLITICO’s investigation found.

The money manager, Michael Lewitt, ran a popular investing newsletter as well as the Third Friday fund. Amer Rustom, the CEO of a business development company, the Platinum Group, boasted of ties to leaders in the Middle East.

The Platinum Group did not respond to requests for comment. A person answering the phone at a number associated with Rustom said that Rustom was out of the country, and Rustom did not respond to a request for comment left with the person. The Florida law firm Cohen Norris, which has represented Rustom, also did not respond to requests for comment.

Jim Biden, Lewitt and Rustom worked to secure investment funding from overseas investors with a focus on potential investment sources in Qatar.

In early 2018, as the group continued to seek long-term funding, Lewitt’s Third Friday fund began making a series of bridge loans to Americore to tide the company over.

The first loan on Jan. 12 coincided with a $400,000 payment from Americore to Jim Biden’s company, the Lion Hall Group. In his prepared statement for his impeachment inquiry interview, Jim Biden said that payment and a subsequent one he received for $200,000 were made partly as compensation for arranging the loans.

On the same day Jim Biden received the $200,000 payment, March 1, he or his wife, Sara Biden, made out a $200,000 check to Joe Biden from their joint account, describing it as a loan repayment on the memo line.

The White House has also characterized it as a loan repayment in statements to media outlets. POLITICO previously reviewed bank records that show a $200,000 payment to Jim Biden from an account that appeared to belong to Joe Biden made several weeks earlier.

The loans from Third Friday have another connection to the Bidens, a previously unreported email shows. On July 30, 2018, Mesires, an attorney who represented both Hunter and Jim Biden in the past, wrote to Americore’s outside counsel, Christopher Anderson, notifying him that “We represent Third Friday Total Return Fund in connection with several loans made to Americore Health and Americore Holdings.”

In the email, part of a cache of internal Americore documents obtained by POLITICO, Mesires seeks several copies of documents related to the loans. Anderson did not respond to requests for comment.

A few weeks before Mesires’ email, Jim Biden had cut ties with Americore’s CEO. But he continued to work with Lewitt and Rustom to identify health care investments.

In 2019, two health care companies sued Jim Biden, Lewitt, Rustom and others in federal court in Tennessee, alleging that they engaged in a “classic fraudulent bait-and-switch.”

The companies alleged a scheme to drive them into bankruptcy and steal their business model by holding out the prospect of imminent investment from overseas, including the Qatar Investment Authority, that never arrived.

Jim Biden and his co-defendants’ denied wrongdoing in that case, which ultimately settled on undisclosed terms.

After the case attracted media attention, one of the plaintiffs, Tennessee businessperson Michael Frey, reported receiving a threat: A package delivered to his home that included the currency of an unspecified Middle Eastern country that appeared to be covered in blood along with a message that referred to “torture.” The FBI opened an investigation of the package, according to a December 2019 report in the Knoxville News Sentinel.

Meanwhile, over the course of 2019, Lewitt’s fund lent Jim Biden’s company, Lion Hall Group, an additional $225,000.

The current status of that loan remains in dispute: In the years since, Lewitt’s fund has faced financial strains as Americore’s bankruptcy made it unlikely that the fund would collect on its loans to the hospital chain and some of Lewitt’s investors have found themselves unable to withdraw their funds from Third Friday. Despite these financial problems, Jim Biden told congressional investigators that Lewitt forgave the $225,000 loan.

Lewitt contested that, telling POLITICO earlier this month that Jim Biden’s debts were assumed by a third-party benefactor whom he declined to name, and remain unpaid.

The financial problems at Lewitt’s funds also drove a rift between the money manager and several of his investors.

In 2022, some of those investors, led by prominent short-seller David Rocker, sued Lewitt and his fund, alleging that they had engaged in “a brazen scheme of fraud, illicit self-dealing, and looting,” by embezzling the fund’s money through Americore and refusing to honor investor redemption requests.

According to their complaint, Lewitt diverted roughly $20 million out of the fund by making sham loans to Americore, embezzled some of the money by diverting it from Americore to himself and his associates, and misled his investors about it.

The complaint does not name Jim Biden. Instead it alleges that one of Lewitt’s “Platinum Group partners” received payments from Americore that were embezzled from Third Friday. The details of those payments make it clear they refer to payments made to Jim Biden.

Lawyers for Lewitt and the investor plaintiffs did not respond to requests for comment. Lewitt, who also did not respond to requests for comment for this story, denied wrongdoing and has counter-sued some of the investors in a related action for breach of contract. The cases remain ongoing.

But the loans to Americore have come under federal scrutiny. This past September, the Securities and Exchange Commission sued Lewitt and his fund for fraud, alleging that the loans violated the fund’s policies. Lewitt has denied wrongdoing and that case remains ongoing.

The FBI has been probing some of the same dealings at issue in the SEC case, according to one of the people familiar with the case.

And last year, a federal grand jury in south Florida sought information on related dealings involving Jim Biden, Lewitt and Rustom, according to the other.

Among the officials involved in the investigation is Assistant U.S. attorney Eli Rubin, according to one of the people. Rubin did not respond to a request for comment. A review of Justice Department press releases shows that recent cases prosecuted by Rubin have pertained to money laundering and bribery, sanctions evasion, and pandemic relief fraud.

For his part, Jim Biden has distanced himself from Lewitt, telling congressional investigators he had not been aware of some of the impropriety alleged by the SEC.

“I was absolutely shocked,” Jim Biden said. “Michael Lewitt was a refined — he was just a nice guy. And up until last week, I thought that he was that same nice guy.”

Medicare fraud in Pennsylvania

In Pennsylvania, a federal criminal probe of activity at Americore has advanced further.

For the past four years, DOJ investigators in Western Pennsylvania have pursued a conspiracy to defraud Medicare in which they say an Americore hospital outside of Pittsburgh paid kickbacks to a businessman who provided the hospital with lab testing specimens for which it improperly billed the government.

Investigators pursuing that case sought information about Jim Biden as recently as last year, according to the person familiar with that case.

Jim Biden’s involvement with Americore stemmed from his relationship with Joey Langston, a disbarred trial lawyer from Mississippi, and the man’s son, Keaton Langston.

POLITICO previously reported that Jim Biden began working with Americore in 2017 after attending a meeting with the Langstons at which they pitched the hospital chain on the services of Fountain Health, a company that provided medical lab services to hospitals.

Jim Biden went on to help Americore gain regulatory approval to acquire its Pennsylvania hospital, Ellwood City Medical Center.

Two years later, in October 2019, an anonymous whistleblower filed a secret lawsuit — known as a qui tam complaint — alleging Medicare fraud at the hospital and elsewhere, according to filings in Americore’s federal bankruptcy case in Kentucky.

Federal investigators began investigating that complaint, and in December 2019, with Americore on the verge of bankruptcy, FBI agents visited its hospital in Pineville, Kentucky, according to a person questioned by them there.

A month later, the FBI raided the Ellwood hospital.

Jim Biden’s representations to potential Americore investors was one early focus of the investigation, according to another person familiar with the early stages of the federal investigation of Americore’s activities,

In 2022, health care entrepreneur Daniel Hurt pleaded guilty to his role in the Medicare fraud, in which prosecutors say he received kickbacks from the Ellwood hospital.

Keaton Langston participated in the Medicare fraud, according to a civil suit filed in federal court by Americore’s bankruptcy trustee. Langston denied wrongdoing and the civil case settled.

The Pennsylvania criminal case remains open.

Last week, federal prosecutors pursuing a separate Medicare fraud case in New Jersey named Keaton Langston as a co-conspirator in that case. Keaton Langston, who has not been named as a defendant in that case, did not respond to requests for comment.