US prosecutors have charged Guo Wengui, the Chinese language businessman and critic of the Communist authorities who fled to New York and allied himself with outstanding China hawks, with being a serial fraudster who funded his lavish exile by a string of funding scams.
Guo was arrested Wednesday on fees together with fraud, conspiracy and cash laundering, in reference to an alleged scheme to misappropriate greater than $1bn from hundreds of his on-line followers.
He’s accused of mendacity to individuals who invested in a collection of ventures, together with his “citizen journalism” media firm, an elite membership service and a purported new cryptocurrency.
A lot of the cash was spent on luxurious objects, property and a $3.5mn Ferrari, and to cowl bills associated to his $37mn yacht, in keeping with the 38-page indictment unsealed in federal court docket within the Southern District of New York. Some $100mn was invested in a “high-risk hedge fund” that in the end misplaced $30mn of the cash, the criticism alleged.
William Je, a Hong Kong and British citizen whom US authorities mentioned was Guo’s monetary adviser, was additionally named as a defendant within the 11-count prison indictment, and is dealing with an addition cost of obstruction of justice. The US Securities and Exchange Commission on Wednesday introduced parallel civil fees towards each males.
Guo came to the US from China in 2014 and allied himself with abroad dissidents and China hawks, together with Steve Bannon, the previous White Home adviser to former president Donald Trump. He’s identified by varied names, together with Miles Guo, Miles Kwok and Ho Wan Kwok.
In 2020, Guo solicited $452mn for his media enterprise, GTV, through an unregistered securities providing that was backed by 5,500 supporters, in keeping with prosecutors, and went on to boost an extra $150mn by loans he mentioned could be convertible into GTV inventory.
He additionally raised $250mn for a membership programme providing “a gateway to rigorously curated world-class merchandise, providers and experiences”, the indictment mentioned, and one other $262mn for a cryptocurrency challenge known as the Himalaya Trade. Guo launched a music video for a tune known as “HCoin To The Moon” to advertise one in all its cryptocurrencies, and Je pretended that one other of its cryptocurrencies had been used to buy a Ferrari, in keeping with court docket filings.
“We allege that Guo was a serial fraudster,” mentioned Gurbir Grewal, director of the SEC’s division of enforcement. “In actuality, Guo took benefit of the hype and attract surrounding crypto and different investments to victimise hundreds and fund his and his household’s lavish way of life.”
In keeping with the prison criticism, cash was channelled by greater than 500 accounts held within the names of greater than 80 entities or people to be able to conceal the sources of funds for the luxurious spending.
Damian Williams, the US legal professional for the Southern District of New York, mentioned Guo “led a posh conspiracy to defraud hundreds of his on-line followers out of over $1bn [and] is charged with lining his pockets with the cash he stole”.
A lawyer for Je declined to remark. He stays at massive, in keeping with prosecutors. A lawyer representing Guo didn’t instantly return a request for remark.
In 2021, three media companies linked to Guo, together with GTV Media Group, paid $539mn to settle earlier civil fees from the SEC that they issued unlawful securities.
