Staff Report –

WASHINGTON, D.C. — The director of a think tank in Maryland who claimed to have damaging information about President Joe Biden’s son Hunter Biden has been charged with arms trafficking, violating sanctions against Iran and acting as an unregistered foreign agent for China, according to a federal indictment unsealed this week by the U.S. Department of Justice.

Prosecutors in the Southern District of New York accused Gal Luft, a dual U.S.-Israeli citizen, of violating the Arms Export Control Act and the Foreign Agents Registration Act in brokering arms deals between Chinese companies, Iran and countries in the Middle East. Some Republicans promoted him because he claimed to have damaging information on the president’s son.

Now he is on the run as a fugitive from justice.

Luft was detained by law enforcement officials in Cyprus in February in connection with the indictment, but fled after being freed on bond while awaiting extradition. If convicted, he faces up to 100 years in prison.

“He subverted foreign agent registration laws in the United States to seek to promote Chinese policies,” Damian Williams, the top federal prosecutor in Manhattan, said when making the announcement. “He acted as a broker in deals for dangerous weapons and Iranian oil, and he told multiple lies about his crimes to law enforcement.”

Luft has denied any wrongdoing, and claims he only became a subject of Justice Department scrutiny after discussing the Hunter Biden investigation with prosecutors who met with him in Belgium in 2019.

Hunter Biden, President Biden’s troubled son, has agreed under a deal with the Justice Department to plead guilty to two misdemeanor tax charges and accept terms that would allow him to avoid prosecution on a separate gun charge, likely ending a long-running federal investigation into his finances, drug use and international business dealings.

Republicans have assailed the agreement as a “sweetheart deal” for the president’s son and have promised to intensify their investigations of the Biden family. They have also used congressional testimony from an IRS official involved in the case to promote the idea that political interference played a role in the outcome.

Gary Shapley, the lead IRS agent on the case, told Congress that the U.S. attorney in Delaware was rebuffed by Justice Department officials in Los Angeles and Washington when he asked about pursuing charges against the president’s son in those jurisdictions and was turned down when he sought special counsel status, which would have allowed him greater flexibility in handling the inquiry.

Attorney General Merrick Garland has forcefully denied Shapley’s claims. David Weiss, the Trump-appointed U.S. attorney in Delaware who has led the five-year investigation, has also pushed back on a key element of the IRS official’s testimony, saying that he never asked to be named a special counsel.

A federal judge must still approve the agreement between the younger Biden and the Justice Department. The president’s son is expected to appear in federal court in Delaware soon to be arraigned on the misdemeanor tax charges and plead guilty. The deal will most likely resolve the investigation without a prison sentence.

But prosecutors painted a portrait of Luft, who split his time between Israel and Washington, as an unscrupulous political fixer working for China who made much of his cash as a back-channel arms and oil broker.

Luft, prosecutors said, helped Chinese arms manufacturers sell anti-tank launchers, grenade launchers and mortar rounds to Libya (he referred to them as toys in communications obtained by the government), bombs and rockets to the United Arab Emirates and military drones to Kenya. He told an associate that the unwillingness of U.S. officials to sell weapons to Kenya provided them with an “opportunity” for profit, prosecutors said.

He also carved out a role as a middleman in transactions to broker sales of oil from Iran, in violation of U.S. sanctions, ordering a business associate to refer to the products as Brazilian petroleum, the government charged. In one instance, Luft received a letter telling him explicitly that a shipment of the oil was Iranian but that it should be “be presented as U.A.E. origin without Iranian papers,” according to the filing.

At the same time, he was using his post as co-director of the Institute for the Analysis of Global Security in Gaithersburg, Md., to exert political influence on behalf of Beijing, according to the Justice Department.

In late 2016, Luft recruited and paid an unnamed former U.S. government official who was acting as an adviser for President-elect Donald Trump as part of a larger effort to “publicly support certain policies” favorable to China, prosecutors wrote in their filing.

In a video published by The New York Post last week, Luft claimed — without offering evidence — that he had informed Justice Department and Federal Bureau of Investigation officials of wrongdoing by the Biden family, prompting what he cast as his persecution.

Representative James Comer, a Republican from Kentucky and the chairman of the House Oversight Committee, recently described Luft as a “very credible witness on Biden family corruption” and said that he hoped to interview him, regardless of the government’s allegations.

Shortly before the indictment was unsealed, Senator Ron Johnson, Republican of Wisconsin and a supporter of Trump, said in an interview with Fox Business that Luft’s work on behalf of Chinese energy companies gave him a “wealth of information” about the Bidens. He provided no evidence for that assertion.

Johnson accused federal prosecutors of bringing the case against Luft “to silence him,” and said the researcher — whom he suggested was hiding out in Israel — should be granted immunity from prosecution to testify before Congress.

Democrats said that Comer and other Republicans have shown they are willing to go to any lengths to smear the Bidens, even to the point of accepting the word of a man accused of being a Chinese agent and illegal arms dealer over that of federal law enforcement officials.

“These recent revelations naturally raise serious concerns that congressional Republicans’ purported ‘whistle-blowers’ are manipulating them by tailoring misinformation to support unfounded and baseless allegations made by Chairman Comer,” said Representative Dan Goldman, a New York Democrat who served as the lead counsel for the House Intelligence Committee during Trump’s first impeachment.

According to court documents, Luft, 57, is charged in an eight-count indictment with offenses related to willfully failing to register under the Foreign Agents Registration Act, arms trafficking, Iranian sanctions violations and making false statements to federal agents. Luft was arrested on Feb. 17 in the Republic of Cyprus based on the charges in the indictment. Luft subsequently fled after being released on bail while extradition proceedings were pending and remains a fugitive.

According to the allegations contained in the indictment, for years, Luft conspired with others in an effort to act within the United States to advance the interests of the People’s Republic of China as agents of China-based principals, without registering as foreign agents as required under U.S. law. As part of this scheme, while serving as the co-director of a Maryland-based nonprofit think tank, Luft agreed to covertly recruit and pay, on behalf of principals based in China, a former high-ranking U.S. government official (Individual-1), including in 2016 while the former official was an adviser to the then-President-elect, to publicly support certain policies with respect to China without Luft or Individual-1 filing a registration statement as an agent of a foreign principal with the Attorney General of the United States, in violation of FARA.

Among other things, in the weeks before the 2016 U.S. presidential election, Luft and a co-conspirator (CC-1), who is a Chinese national and worked for a Chinese nongovernmental organization affiliated with a Chinese energy company, created a written “dialogue” between CC-1 and Individual-1, in which Luft wrote Individual-1’s responses and included information that was favorable to China. The dialogue was then published in a Chinese newspaper online and sent to, among others, individuals in the United States, including a journalist and professors at multiple U.S. universities.

When Luft was writing the dialogue, CC-1 told Luft that “[i]n these articles, we do not want to spill all the beans yet, just enough to let ‘people’ know he [i.e., Individual-1] is in the corridor of power to be. Just broad stroke policy consideration that leaves plenty of room for interpretation and imagination to be filled in later.”

After the purported “conversations” were published, Luft told CC-1 that certain information, favorable to China, had been “tucked between the lines.” Shortly after the 2016 election, Luft and CC-1 also discussed possible roles Individual-1 might have in the incoming U.S. administration, and discussed Individual-1 taking a “silent trip” to China. Luft responded that “[w]e are debating about his role in the new admin. There are all kinds of considerations . . .We should talk ftf [i.e., face-to-face] as there can be a supremely unique opportunity for china.”

Second, Luft conspired with others and attempted to broker illicit arms transactions with, among others, certain Chinese individuals and entities. In his role as a broker or middleman, Luft worked to find both buyers and sellers of certain weapons and other materials, without a license to do so as required under U.S. law, in violation of the Arms Export Control Act.

Among other things, Luft worked to broker a deal for Chinese companies to sell certain weapons to Libya, including anti-tank launchers, grenade launchers and mortar rounds (which Luft and his associates referred to in coded language as “toys”).

Luft also worked to broker deals for certain weapons to be sold to the United Arab Emirates, including arial bombs and rockets. Luft further worked to broker deals for certain weapons to be sold by a Chinese company to Kenya, including unmanned aerial vehicles (UAVs) – and specifically “strike” UAVs, which Luft acknowledged “[t]he US doesn’t want to sell[, . . .] hence the opportunity.”

Luft also discussed brokering a deal for weapons to Qatar, and told CC-1 that Israel was “not a good fit” as the middleman for the deal because it had the “[s]ame problem the [] Q [i.e., Qataris] have w uncle [i.e., the United States]. Need a third party. . . . I will activate.”

In his role as a broker for illicit arms deals, Luft worked on a commission basis, and traveled to meetings and received and passed on documentation needed to secure the deals. During a voluntary interview with U.S. law enforcement in which he was asked questions about his involvement in arms trafficking, Luft made multiple false statements, including that he had just been checking prices for a friend and had not sought to engage in or profit from arms deals.

Third, Luft conspired with others and attempted to broker deals for Iranian oil – which he directed an associate to refer to as “Brazilian” oil in an effort to conceal the activity and evade sanctions – in violation of U.S. sanctions against Iran and the International Emergency Economic Powers Act (IEEPA). In his role as a broker or middleman, Luft solicited buyers and passed on pricing and other information. One offer letter for Iranian oil that Luft received noted that the “origin” of the oil was “Iranian / It can be presented as UAE origin without Iranian papers.” He also assisted in setting up meetings between Iranian representatives and a Chinese energy company for the purpose of discussing oil deals. During a voluntary interview with U.S. law enforcement in which he was asked about his role brokering deals in Iranian oil, Luft made multiple false statements, including that he had tried to prevent oil deals with Iran and had not been present during meetings with the Chinese energy company and Iranians.

Luft is charged with the following offenses, which carry the maximum prison terms listed below. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI New York Field Office and FBI’s Counterintelligence Division are investigating the case, with valuable assistance provided by the IRS-Criminal Investigation (IRS-CI) and the Justice Department’s Office of International Affairs.

Assistant U.S. Attorneys Daniel C. Richenthal and Catherine Ghosh for the Southern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

If you have any information about Luft’s whereabouts, please contact your local FBI office or the nearest American Embassy or Consulate. Tips can be reported anonymously and can also be reported online at tips.fbi.gov.