U.S. charges exiled Chinese businessman Guo Wengui with $1 bln fraud
By Jonathan Stempel
Reuters
March 15, 2023
Guo Wengui (also known as Miles Kwok) holds a news conference with Steve Bannon in New York, New York, U.S., November 20, 2018. REUTERS/Carlo Allegri
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NEW YORK, March 15 (Reuters) - The U.S. government on Wednesday charged Guo Wengui, an exiled Chinese businessman with ties to former Donald Trump adviser Steve Bannon, with leading a complex conspiracy to defraud his online followers out of more than $1 billion.
Authorities said Guo, with help from his longtime financial adviser Kin Ming Je, cheated thousands of followers by promising "outsized" investment returns, but diverted much of their money to fund lavish lifestyles for himself and his family.
The alleged improper purchases included a $37 million yacht, a 50,000 square-foot mansion in northern New Jersey, a $3.5 million Ferrari for Guo's son, a $62,000 TV, and two $36,000 mattresses, according to authorities.
Guo was charged with 11 criminal counts, after "lining his pockets with the money he stole," U.S. Attorney Damian Williams in Manhattan said in a statement.
A lawyer for Guo did not immediately respond to requests for comment.
Guo has been a business associate of Bannon, who was arrested in a fraud case in August 2020 while aboard Guo's yacht, the Lady May.
Trump pardoned Bannon in the final hours of his presidency. Bannon is not accused of wrongdoing in Guo's criminal case.
The U.S. Department of Justice said it seized and is seeking the forfeiture of $634 million of alleged fraud proceeds from 21 bank accounts, including several at the now-closed Silvergate Bank.
It said it also seized assets purchased with proceeds from Guo's alleged fraud, including a Lamborghini Aventador.
Guo, 52, has used other names including Ho Wan Kwok and Miles Kwok.
He was arrested on Wednesday morning and faces charges that include securities fraud, wire fraud and concealment of money laundering, carrying several decades of potential prison time.
Guo also faces related U.S. Securities and Exchange Commission civil charges.
Je, who lives in London and is also known as William Je, faces the same 11 criminal counts plus an obstruction charge. He is at large.
'SERIAL FRAUDSTER'
Guo is a prominent critic of China's Communist Party.
He left the country in 2014 during an anti-corruption crackdown under President Xi Jinping, and has been accused there of crimes including bribery and money laundering. Guo has denied wrongdoing.
Court papers filed on Wednesday described a web of offerings that according to prosecutors targeted investors aligned with Guo's policy objectives in China, and inclined to believe the self-proclaimed billionaire when it came to investing.
"We allege that Guo was a serial fraudster," SEC enforcement chief Gurbir Grewal said in a statement.
Guo's offerings allegedly included a $262 million fundraising through a purported cryptocurrency "ecosystem," the Himalaya Exchange, that promised a so-called H Coin, also known as Himalaya Coin or HCN, with an estimated $27 billion valuation.
The indictment quotes from an October 2021 video in which Guo allegedly said 20% of H Coin's value was backed by gold, and that he would fully reimburse investors who lost money.
"Whoever loses money, I will bear it," Guo was quoted as saying.
Prosecutors said the alleged fraudulent scheme occurred from 2018 until this month. The Lady May is among the assets the government wants to seize.
In February 2022, Guo filed for Chapter 11 bankruptcy in Connecticut after a New York judge ordered him to pay $134 million for moving the Lady May out of a lender's reach.
Reporting by Jonathan Stempel in New York; Additional reporting by Luc Cohen in New York and Chris Prentice in Washington, D.C.; Editing by Marguerita Choy and Bill Berkrot
U.S. charges exiled Chinese businessman Guo Wengui with $1 bln fraud | Reuters |
