EMAIL DETAILS

I am doing a call with the RSB accountant in the morning to ascertain what cash is available to be paid out to Hunter prior to the 18th to make Hunter “whole” prior to taxes. I’ll let everyone know when I find out.

The challenge we are up against in getting the cash is much of it has in fact been paid to the IRS in the form of quarterly estimates by Devon personally. Without knowing the rest of Devon’s situation he will likely have overpaid his taxes for 2015 (and ultimately 2014) and should be due a refund. But he wouldn’t receive that for months after he amends 2014 and files 2015 so that doesn’t help us in the immediate. At the very least I hope that is a good fact point that could be used with the IRS to help Hunter avoid any penalties.


Eric D. Schwerin
Rosemont Seneca Advisors, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
eschwerin@rosemontseneca.com <x-msg://59/eschwerin@obblaw.com>
P Consider the environment before printing this email.

> On Apr 13, 2016, at 6:01 PM, Levinson, Kenneth S. <ken.levinson@FaegreBD.com> wrote:
>
> Eric,
>
> I agree with Mike. Very helpful and it confirms (with updates) the information in your earlier email as well as my efforts to reconstruct what happened.
>
> As respects “getting the money back from Alex,” I don’t see that as an option, either. In fact, Hunter owed Alex that amount personally and the fact that Alex was paid supports the proof of that expense. (Not sure there is a contract or other substantiation of the monthly obligation to Alex, but for now I’d assume all parties accept that for what it was and will apply it as a deduction (as appropriate) in both years.)
>
> I assume that distribution of $188,616.56 from Rosemont Realty is “gone” at this point, i.e., contributed to RSB/Devon in payment of a prior obligation and used by them already, in which case those funds would not be available for the 18th. Right?
>
> The fact that there were “diversions” of cash flow into and out of RSB, etc., is of course the subject of upcoming explanations. But, as we’ve discussed the substance is that the income amounts were his personally, and the Alex payments were deductions/expenses of his personally, so telescoping those items into his personal calculations for his 2015 year extension filing (and required payments) will be appropriate even if the paper trail needs explanations later… You might consider having Alex confirm in writing to Hunter that Alex received the $277,775 from or on behalf of Hunter during 2015 in payment and discharge of the Finder’s Fee obligation Hunter owed Alex in connection with securing the Board seat on Burisma. At least that document would help substantiate the deduction (and confirm the payments on Hunter’s behalf).
>
> I think we all hope the $329,692.56 is still available in RSB and that Devon assists, forthwith, in transferring it to Hunter…
>
> Thanks for the assistance and follow up.
>
> Let me know if you or Hunter want to talk further about any of this. I’m glad to see his/your CPA is standing by to assist.
>
> Best regards.
>
> Ken
>
>
> Kenneth S. Levinson
> Partner
> ken.levinson@FaegreBD.com <mailto:ken.levinson@FaegreBD.com> Download vCard <http://www.faegrebd.com/vcard/ken.levinson.vcf>
> D: +1 612 766 8341
>
> Faegre Baker Daniels LLP <http://www.faegrebd.com/>
> 2200 Wells Fargo Center | 90 South Seventh Street | Minneapolis, MN 55402-3901, USA
>
> This message and any attachments are for the sole use of the intended recipient(s) and may contain confidential and/or privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message and any attachments. Thank you.
>
>
> From: MacPhail, Michael R.
> Sent: Wednesday, April 13, 2016 4:33 PM
> To: 'Eric Schwerin'; Levinson, Kenneth S.
> Cc: Mesires, George R.; Klinefeldt, Nicholas A.; Hunter Biden
> Subject: RE: CONFIDENTIAL: ATTORNEY-CLIENT PRIVILEGE; ATTORNEY WORK-PRODUCT PRIVILEGE
>
> Eric, this is very helpful – thanks for sending.
>
> Mike
>
> From: Eric Schwerin [mailto:eschwerin@rosemontseneca.com <mailto:eschwerin@rosemontseneca.com>]
> Sent: Wednesday, April 13, 2016 3:20 PM
> To: Levinson, Kenneth S.
> Cc: Mesires, George R.; MacPhail, Michael R.; Klinefeldt, Nicholas A.; Hunter Biden
> Subject: Re: CONFIDENTIAL: ATTORNEY-CLIENT PRIVILEGE; ATTORNEY WORK-PRODUCT PRIVILEGE
> Importance: High
>
> Adding Hunter to this email chain.
>
> I started from scratch to make it simpler. Attached is a spreadsheet showing all income received by RSB on Hunter’s behalf for 2014 and 2015. In addition, I have listed all payments received by Hunter from RSB for the same time periods.
>
> If you look at these numbers for 2015, Hunter received $1,021,946.56 in income that he has not yet accounted for for taxes purposes. This includes 10 Burisma payments of $83,333 a month and a distribution of $188,616.56 (that we had not discussed previously) from “Rosemont Realty” which were the proceeds from an equity interest that Hunter owned and which he “contributed to RSB”.
>
> In 2015, RSB paid Hunter $414,479.00. As a result, Hunter is owed $607,467.56 from RSB.
>
> However, of that $607,467.56, $277,775 was paid to Alex as a Finders Fee (I was told that Alex’s payments went through October 2015 not August as I originally thought). That money has already left RSB and gone to Alex. It would be impossible to have Alex return that money to RSB so that it could go back to Hunter and then have Hunter pay it directly. I did confirm with our personal accountant that those payments to Alex could be treated as an expense. Just not sure how to handle from a moving money around perspective.
>
> If we deduct the Alex payments from what Hunter is owed, there should be $329,692.56 in RSB that could be paid to Hunter to make him whole. I am confirming that this money is in the account but we need to be prepared for the fact that it may not be.
>
> So, based on all of the above and minus the payments made to Alex, Hunter should ultimately have $744,170.56 in reportable income that passed through RSB and he should be owed $329,692.56 from RSB which could be used to pay any taxes on this.
>
> I am putting off 2014 for now but the numbers are included on the attached spreadsheet.
>
> Let me know if you have any questions or I did anything erroneously.
>
> Thanks,
>
> Eric
>
>
>
> Eric D. Schwerin
> Rosemont Seneca Advisors, LLC
> 1010 Wisconsin Ave., NW
> Suite 705
> Washington, DC 20007
> (202) 333-1880
> eschwerin@rosemontseneca.com <mailto:eschwerin@rosemontseneca.com>
> P Consider the environment before printing this email.
>
> On Apr 13, 2016, at 11:48 AM, Levinson, Kenneth S. <ken.levinson@FaegreBD.com <mailto:ken.levinson@faegrebd.com>> wrote:
>
> CONFIDENTIAL: ATTORNEY-CLIENT PRIVILEGE; ATTORNEY WORK-PRODUCT PRIVILEGE
>
> Eric, All
>
> Here are the cash “numbers” I referenced in our call this morning; these were derived (hopefully accurately) from Eric’s email of April 11th (his was time stamped at 4:50 PM EDT; we got it from George via email time stamped 5:23 PM that day).
>
> Given Eric’s description of the $51,835 “over draw” by Hunter in 2015, I have accounted for that amount below both as a “receipt” and as a subset of the “taxes” account/payout. However, as Eric clarified in our call today, the “taxes” hold back (whether constituting the gross amount of $245,498, or the “net” amount after “repayment” of the overdraw (the net being $193,663 per Eric’s email)) was NOT actually paid to the IRS by or on behalf of Hunter during 2015.
>
> Based on the calculations and assumptions shown below, it appears there is a “net” unexplained difference that I can’t identify (thus far) for 2015 of +$222,944. I’m hoping Eric’s more experienced and knowledgeable eyes will let us know what I am missing.
>
> In any case, here are my calculations from last night:
>
> Hunter receives/is owed:
> · $833,333 (10 months of Burisma tracked through RSB)
> · 51,835 (the “excess draw” taken out by Hunter from RSB)
> · 166,666 (2 months of Burisma payments to Owasco)
> $1,051,834
>
> Hunter pays out:
> · $361,168 (payoff/down of Devon’s loan to fund Hunter’s investment in BHR)
> · 222,224 (per Eric, which works out to 30%/mo, $27,778, paid to Alex for 8 months as Finder’s Fee)
> · 51,835 (repayment attributable to Hunter out of “taxes” Hold Back to repay “over draw” from RSB)
> · 193,663 (balance of “taxes” Hold Back of $245,498 remaining after repayment of “over draw” to RSB)
> $828,890
>
> 2015 cash payments attributable to Hunter not accounted for: $222,944 (the difference between $1,051,834 and $828,890)
>
> What am I missing?
>
> Thanks for any input from any of you, especially Eric…
>
> Best regards.
>
> Ken
>
>
> Kenneth S. Levinson
> Partner
> ken.levinson@FaegreBD.com <mailto:ken.levinson@FaegreBD.com> Download vCard <http://www.faegrebd.com/vcard/ken.levinson.vcf>
> D: +1 612 766 8341
>
> Faegre Baker Daniels LLP <http://www.faegrebd.com/>
> 2200 Wells Fargo Center | 90 South Seventh Street | Minneapolis, MN 55402-3901, USA
>
> This message and any attachments are for the sole use of the intended recipient(s) and may contain confidential and/or privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message and any attachments. Thank you.