The controversial exiled Chinese billionaire businessman Guo Wengui — an associate of former Trump White House advisor Steve Bannon — was arrested in Latest York on Wednesday for orchestrating what federal prosecutors called a greater than $1 billion fraud conspiracy that duped online followers with guarantees of outsized investment returns.
Guo allegedly used a few of the money raised through his company GTV Media and other entities to purchase a 50,000-square foot mansion in Latest Jersey, a $37 million luxury yacht, a $3.5 million Ferrari for his son, a $140,000 Bosendorfer piano and two Hasten 2000T mattresses that cost a whopping $36,000 apiece.
Prosecutors said they seized greater than $650 million in alleged fraud proceeds from 21 different bank accounts and assets that included a Lamborghini Aventador SVJ Roadster automobile as a part of the case against Guo and his financial advisor William Je in Manhattan federal court.
The Securities and Exchange Commission individually filed a related civil grievance against the 52-year-old Guo and Je, a resident of the UK and Hong Kong who stays at large.
Guo, who is understood by multiple different names, including Miles Guo and Miles Kwok,” Brother Seven, and The Principal, has lived in the US since 2015 after fleeing China, reportedly to duck expected corruption charges. In
In 2018, he founded two purported nonprofit organizations, the Rule of Law Foundation and the Rule of Law Society, which he used as a part of his public relations campaign against the Chinese Communist Party.
Guo “used the nonprofit organizations to amass followers who were aligned together with his purported policy objectives in China and who were also inclined to consider [Guo’s} statements regarding investment and money-making opportunities,” the U.S. Attorney’s Office for the Southern District of New York said in a statement.
Guo is due to appear in court Wednesday afternoon.
The SEC accuses Guo and Je of involvement in unregistered and fraudulent financial offerings.
The SEC separately accused Guo of making misrepresentations in raising hundreds of millions of dollars from investors through a cryptocurrency asset known as H-Coin.
Last September, three companies linked to Guo, including GTV Media, agreed to pay nearly $540 million to settle civil allegations by the SEC of making illegal offerings of stock and digital assets.
In August 2020, federal authorities arrested Bannon on a mega-yacht belonging to Guo off the coast of Connecticut on charges related to siphoning off money for the “We Build the Wall” fundraising campaign. Former President Donald Trump months later pardoned Bannon in that case, shortly before Trump left the White House.
Bannon, who served Trump as senior White House advisor for less than a year, at one point was on the board of directors of the Rule of Law Society. In June 2021, Guo’s two non-profits hosted a private party in New York attended by Bannon, former Trump lawyer Rudy Giuliani, former Trump national security advisor Michael Flynn, and the Trump ally and conspiracy theorist Mike Lindell, CEO of MyPillow.
A 12-count grand jury criminal indictment unsealed Wednesday alleges that Guo and Je “conspired to defraud thousands of victims” in the scheme, which spanned from 2018 to this month.
The alleged conspiracy involved the use of different entities and programs to obtain investments from the victims, who were deceived by misrepresentations and false statements, prosecutors said.
“Kwok lied to his victims and promised them outsized returns if they invested, or provided money to, GTV [Media] his so-called Himalaya Farm Alliance, G|CLUBS, and the Himalaya Exchange,” prosecutors said in a press release.
The defendants are charged with wire fraud, securities fraud, bank fraud, and money laundering within the criminal case. Je is also charged with obstruction of justice for allegedly attempting to transfer money related to the conspiracy to the United Arab Emirates since last September.
Gurbir Grewal, director of the SEC’s enforcement division, said the agency alleges Guo “was a serial fraudster, who raised greater than $850 million by promising investors outsized returns on purported crypto, technology and luxury good investment opportunities.”
“In point of fact, Guo took advantage of the hype and allure surrounding crypto and other investments to victimize hundreds and fund his and his family’s lavish lifestyle,” Grewal said.
The SEC’s grievance said that one example of Guo and Je’s alleged fraud was a personal placement offering of common stock in GTV Media Group.
“Guo and Je allegedly diverted $100 million of investor funds to a hedge fund for the only real good thing about an organization that’s owned by Guo’s son,” the SEC said.
And Guo allegedly misappropriated investor proceeds in two other offerings to pay greater than $40 million to purchase and renovate the Latest Jersey mansion, and to purchase the Ferrari for his son, the SEC said.
Each Guo and Je face possible sentences of as much as 20 years in prison if convicted.
