US charges exiled Chinese businessman Guo Wengui with $1 billion fraud

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By Jonathan Stempel

NEW YORK (RockedBuzz via Reuters) – The U.S. government on Wednesday accused Guo Wengui, an exiled Chinese businessman with ties to former Donald Trump adviser Steve Bannon, of leading a complex conspiracy to defraud online followers of Guo of more than 1 billion dollars.

Authorities said Guo, with the help of longtime financial advisor Kin Ming Je, duped thousands of followers since 2018 by promising “oversized” returns on investments, but diverting 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. dollars, according to authorities.

Guo, 52, was charged with 11 felony counts including securities fraud, wire fraud and money laundering concealment, after he “stuffed his pockets with money he stole,” the states attorney said in a statement. United Damian Williams in Manhattan.

The defendant was arrested Wednesday morning and pleaded not guilty in federal court in Manhattan before US Magistrate Judge Katharine Parker, who ordered him held without bail.

Guo wore a black shirt, black pants and brown shoes in the classroom. He was not handcuffed and joined his hands in prayer towards the onlookers before being led outside.

Guo’s lawyers did not immediately respond to requests for comment. They will offer a “robust bail package,” according to Tamara Giwa, a federal public defender who represented Guo at Wednesday’s hearing. His next court appearance is on April 4.

BANNON ASSOCIATE

Guo, who has gone by other names such as Ho Wan Kwok and Miles Kwok, was a former business partner 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 US Justice Department said it had seized and sought forfeiture of $634 million of Guo’s alleged fraud proceeds from 21 bank accounts, including several at the now-closed Silvergate Bank.

He said he has also seized assets purchased with the proceeds of Guo’s alleged fraud, including a Lamborghini Aventador, and wants Guo to give up the yacht.

The criminal charges carry several decades of potential prison time. Guo also faces related civil charges from the US Securities and Exchange Commission.

Je, who lives in London and is also known as William Je, faces the same 11 criminal counts plus an obstruction charge. He is free.

Guo is a prominent critic of the Communist Party of China.

He fled that country in 2014 during an anti-corruption crackdown under President Xi Jinping, and has been accused of crimes including bribery and money laundering. Guo denied making a mistake.

‘SERIAL FRAUDDER’

After Guo’s arrest, a fire broke out on the 18th floor of the Sherry-Netherland hotel, where he has an apartment, on Manhattan’s Upper East Side.

A spokesman for the New York City Fire Department said no injuries were reported and officials are investigating. He declined to say whether they were looking into any connection to Guo’s arrest.

Court documents filed Wednesday detailed a web of deals that prosecutors said targeted investors aligned with Guo’s political goals in China and inclined to believe the self-proclaimed billionaire when it came to investing.

“We allege that Guo was a serial fraudster,” SEC law enforcement chief Gurbir Grewal said in a statement.

Prosecutors said that in a bid, Guo raised $262 million through a cryptocurrency “ecosystem” called Himalaya Exchange, which pledged a so-called H Coin, also known as Himalaya Coin or HCN, with an estimated valuation of $ 27 billion.

The indictment cited an October 2021 video in which Guo allegedly claimed that 20% of H Coin’s value was backed by gold and that he would fully refund investors who lost money.

“Whoever loses money, I will bear it,” Guo is quoted as saying.

In February 2022, Guo filed for Chapter 11 bankruptcy in Connecticut after a New York judge ordered him to pay $134 million for moving Lady May out of reach of a lender.

(Reporting by Jonathan Stempel, Luc Cohen and Tyler Clifford in New York and Chris Prentice in Washington, DC; Editing by Marguerita Choy, Daniel Wallis, Bill Berkrot and David Gregorio)

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