The controversial exiled Chinese billionaire businessman Guo Wengui, an associate of former Trump White House advisor Steve Bannon, was arrested in New York on Wednesday for orchestrating what federal prosecutors called a more than $1 billion fraud conspiracy that duped online followers with promises of “outsized” investment returns.
Guo allegedly used some of the money to buy a 50,000-square foot mansion in New Jersey, a $37 million luxury yacht, a $3.5 million Ferrari for his son and two mattresses that cost a whopping $36,000 apiece.
Prosecutors said they have seized more than $650 million in alleged fraud proceeds from 21 different bank accounts and a Lamborghini Aventador SVJ Roads automobile as part of the case in Manhattan federal court.
The Securities and Exchange Commission separately filed a related civil complaint against Guo, who is known by multiple different names, including Miles Guo and Miles Kwok. He has lived in the United States since 2015.
Also charged in the criminal and civil cases is Guo’s financier Kin Ming Je, also known as William Je.
The SEC accuses Guo and Je of involvement in unregisterd and fraudulent financial offerings. Guo is separately accused by the SEC of making misrepresentations in raising hundreds of millions of dollars from investors through a cryptocurrency assest known as “H-Coin.
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.
A grand jury criminal indictment unsealed Wednesday alleges that Guo and Je, who remains at large, “conspired to defraud thousands of victims” in the scheme, which spanned from 2018 to the current 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.
IThe defendants are charged with wire fraud, securities fraud, bank fraud, and money laundering in the criminal case. Je also is charged with obstruction of justice.
Gurbir Grewal, director of the SEC’s enforcement division, said the agency alleges Guo “was a serial fraudster, who raised more than $850 million by promising investors outsized returns on purported crypto, technology and luxury good investment opportunities.”
“In reality, Guo took advantage of the hype and allure surrounding crypto and other investments to victimize thousands and fund his and his family’s lavish lifestyle,” Grewal said.
The SEC’s complain said that one example of Guo and Je’s alleged fraud private 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 sole benefit of a company that is owned by Guo’s son,” the SEC said.
And Guo allegedly misappropriated investor proceeds in two other offerings to pay more than $40 million to buy and renovate the New Jersey mansion, and to buy the Ferrari for his son, the SEC said.
Both Guo and Je face ossible sentences of up to 20 years in prison if convicted.
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