US prosecutors have charged Guo Wengui, the Chinese businessman and critic of the Communist government who fled to New York and allied himself with prominent China hawks, with being a serial fraudster who funded his lavish exile through a string of investment scams.
Guo was arrested Wednesday on charges including fraud, conspiracy and money laundering, in connection with an alleged scheme to misappropriate more than $1bn from thousands of his online followers.
He is accused of lying to people who invested in a series of ventures, including his “citizen journalism” media company, an elite membership service and a purported new cryptocurrency.
Much of the money was spent on luxury items, property and a $3.5mn Ferrari, and to cover expenses related to his $37mn yacht, according to the 38-page indictment unsealed in federal court in the Southern District of New York. Some $100mn was invested in a “high-risk hedge fund” that ultimately lost $30mn of the money, the complaint alleged.
William Je, a Hong Kong and British citizen whom US authorities said was Guo’s financial adviser, was also named as a defendant in the 11-count criminal indictment, and is facing an addition charge of obstruction of justice. The US Securities and Exchange Commission on Wednesday brought parallel civil charges against both men.
Guo came to the US from China in 2014 and allied himself with overseas dissidents and China hawks, including Steve Bannon, the former White House adviser to former president Donald Trump. He is known by various names, including Miles Guo, Miles Kwok and Ho Wan Kwok.
In 2020, Guo solicited $452mn for his media venture, GTV, via an unregistered securities offering that was backed by 5,500 supporters, according to prosecutors, and went on to raise a further $150mn through loans he said would be convertible into GTV stock.
He also raised $250mn for a membership programme offering “a gateway to carefully curated world-class products, services and experiences”, the indictment said, and another $262mn for a cryptocurrency project called the Himalaya Exchange. Guo released a music video for a song called “HCoin To The Moon” to promote one of its cryptocurrencies, and Je pretended that another of its cryptocurrencies had been used to purchase a Ferrari, according to court filings.
“We allege that Guo was a serial fraudster,” said Gurbir Grewal, director of the SEC’s division of enforcement. “In reality, Guo took advantage of the hype and allure surrounding crypto and other investments to victimise thousands and fund his and his family’s lavish lifestyle.”
According to the criminal complaint, money was channelled through more than 500 accounts held in the names of more than 80 entities or individuals in order to conceal the sources of funds for the luxury spending.
Damian Williams, the US attorney for the Southern District of New York, said Guo “led a complex conspiracy to defraud thousands of his online followers out of over $1bn [and] is charged with lining his pockets with the money he stole”.
A lawyer for Je declined to comment. He remains at large, according to prosecutors. A lawyer representing Guo did not immediately return a request for comment.
In 2021, three media companies linked to Guo, including GTV Media Group, paid $539mn to settle earlier civil charges from the SEC that they issued illegal securities.
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