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Guo Wengui

Exiled Chinese Billionaire Guo Wengui Charged With Billion-Dollar Fraud in US

Prosecutors claim Guo Wengui and his financial advisor, Kin Ming Je, conspired to defraud thousands of victims of more than $1 billion using “a series of complex fraudulent and fictitious businesses and investment opportunities.”

(Bloomberg) -- Chinese billionaire Guo Wengui, the exiled businessman and vocal critic of Beijing with ties to former Donald Trump adviser Steve Bannon, was arrested and charged with fraud after the US seized $634 million linked to his alleged crimes.

Guo, also known as Miles Kwok, and his financial adviser, Kin Ming Je, were charged with conspiracy, wire and securities fraud and money laundering in a 38-page indictment unsealed Wednesday in Manhattan. Guo was arrested in New York, while Je is at large, Manhattan US Attorney Damian Williams said in a statement.

Guo and Je conspired to cheat thousands of victims out of more than $1 billion using “a series of complex fraudulent and fictitious businesses and investment opportunities,” prosecutors alleged. The two used more than $300 million of the proceeds to benefit themselves and their families, according to the indictment. Among the spoils the government listed are a $26.5 million mansion in New Jersey for Guo and his family, a $37 million yacht, a $3.5 million Ferrari and a pair of $35,000 mattresses.

Guo was to appear before a judge in the afternoon, according to the US. The case then took a strange turn when a fire broke out on the 18th floor of the Sherry-Netherland hotel in Manhattan, where Guo lives and where he was arrested by FBI agents at 6 a.m. 

A lawyer who represents Guo in other cases didn’t respond to a call seeking comment on the charges. 

Subject of Spectacle

Guo, 54, an associate of Bannon, has been sharply critical of the Chinese Communist Party and has lived in the US since 2015, according to the US. He has long been the subject of legal wrangling. 

In 2020 Trump fundraiser Elliott Broidy pleaded guilty to illegally lobbying Trump’s White House to seek the extradition of Guo and squelch the investigation of 1MDB, the Malaysian fund at the center of a spectacular global bribery scandal. Trump later pardoned Broidy.

Bannon, the chief strategist of Trump’s victorious 2016 presidential campaign, was on board Guo’s yacht in 2020 when he was arrested for fraud in connection a nonprofit group that took private donations to build a wall on the US-Mexico border. Bannon, whom Trump pardoned on the federal charges, still faces related charges in New York state court and has pleaded not guilty.

The indictment unsealed Wednesday includes 11 criminal counts against Guo and Je and one charge of obstruction against Je, who is also known as William Je. The most serious charges, including fraud and money laundering, carry a maximum sentence of 20 years in prison. 

Fire at Hotel

The New York Fire Department declared a two-alarm fire at the hotel, which boasts the famed Harry Cipriani restaurant just off its lobby. Several firetrucks and a Police Department Bomb Squad vehicle were parked outside.

The FBI agents was conducting a search of Guo’s residence and were expected to return to continue their work after fire officials determined it was safe, said a person familiar with the matter who spoke on the condition of anonymity because it wasn’t public. 

The FDNY is investigating the cause of the fire, the person said. A firefighter who didn’t identify himself said no one was hurt in the blaze. 

Seized Lamborghini

Prosecutors seized the $634 million from 21 bank accounts tied to the alleged fraud, which they say Guo and Je committed through a series of securities offerings, Williams said in the statement. A Lamborghini Aventador is among the seized assets.

One of the fake business opportunities the government says Guo and Je touted involved the Himalaya Exchange, a cryptocurrency “ecosystem” that featured the Himalaya Dollar, pitched as a stablecoin. To cover their tracks, they allegedly employed a money-laundering network involving more than 500 accounts held by at least 80 people and entities, according to the US.

Je is a dual citizen of Hong Kong and the UK who lived in London at the time of the alleged crimes. The US claims he ran numerous companies and investment vehicles involved in the scheme and was its financial architect and money launderer.

In 2018, prosecutors said, Guo set up two groups, the Rule of Law Society and the Rule of Law Foundation, to attract people who supported his efforts against the Chinese Communist Party. The US alleges he plied his hundreds of thousands of online followers with fraudulent investment opportunities, promising them unrealistic returns. 

Gold Reserves

Instead, the government says, from 2018 until this month, Guo, Je and unidentified co-conspirators fleeced thousands of victims out of more than $1 billion. 

Prosecutors claim Guo and Je solicited money from their followers for an unregistered stock placement for their GTV Media Group, selling $452 million in common stock. The government says the pair reaped another $262 million from the Himalaya Exchange pitch. 

The criminal charges follow a lawsuit earlier in the day by the US Securities and Exchange Commission. Guo was behind three unregistered securities offerings for GTV Media Group Inc. and another to buy a crypto security he falsely said was backed by gold reserves, according to the suit. 

The criminal case is US v. Ho Wan Kwok, 23-cr-00118; the civil case is Securities and Exchange Commission v. Ho Wan Kwok, 23-cv-02200; US District Court, Southern District of New York (Manhattan).

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