Exiled Chinese billionaire Guo Wengui, an ally of far-right activist and former Donald Trump aide Steve Bannon, was arrested and charged by federal prosecutors in connection with a sprawling fraud case.
He owned the 152-foot-long yacht on which Bannon was arrested in August 2020 and helped found a media group under investigation by the US Securities and Exchange Commission.
Guo, known as Ho Wan Kwok, among other aliases, was arrested in New York on 15 March on charges that he orchestrated a $1bn fraud scheme under a 12-count indictment alleging wire fraud, securities fraud, bank fraud and money laundering.
Kin Ming Je, or William Je, Guo’s financier, also is charged with obstruction of justice. He is currently at large.
Guo “led a complex conspiracy to defraud thousands of his online followers” out of more than $1bn, according to US Attorney Damian Williams, and is “charged with lining his pockets with the money he stole, including buying himself, and his close relatives, a 50,000 square foot mansion, a $3.5m Ferrari and even two $36,000 mattresses, and financing a $37 luxury yacht.”
The money also was used for nearly $1m in rugs, a $4.4m Bugatti sports car, a Rolls-Royce Phantom, a $62,000 television and a $53,000 log cradle for a fireplace, among other items, according to prosecutors.
He allegedly used two nonprofit organisations founded in 2018 – the Rule of Law Foundation and the Rule of Law Society – to “amass followers who were aligned with his purported policy objectives in China and who were also inclined to believe [his] statements regarding investment and money-making opportunities,” prosecutors argued.
He is accused of lying to investors by promising them “outsized returns if they invested, or provided money to” his GTV Media Group, spearheaded by Mr Bannon, or Guo’s other projects, including te Himalaya Farm Alliance, G|CLUBS, and the Himalaya Exchange.
“Since in or about April 2020, Guo has conducted fraudulent securities offerings that have collectively raised at least hundreds of millions of dollars from investors in the United States and around the world,” according to the SEC complaint.
“Unbeknownst to those investors, Guo and his financial adviser, Je, misappropriated a large portion of the funds raised ... in order to enrich themselves and their family members,” according to the complaint.
From about 30 April, 2002 to 2 June, 2020, $452m in GTV stock was allegedly sold to more than 5,500 investors, prosecutors said.
Guo and Je then directed $100m from funds raised through GTV Private Placement into a high-risk hedge fund for the benefit of GTV’s parent company and its ultimate beneficial owner who was a close family relative of Guo, according to the complaint.
Guo and Je also allegedly fraudulently obtained more than $150m through the Himalaya Farm Alliance, $250m from an online membership club called G|CLUBS, and $262m through a cryptocurrency exchange for “H-Coin” that the men falsely claimed was backed by gold reserves, according to the complaint.
Bannon is not charged in connection with the complaint. He is facing prosecution in a separate fraud case from Manhattan’s district attorney accusing the far-right media personality of defrauding donors to the We Build the Wall campaign.
