US accuses Chinese tycoon Wengui Guo of one billion fraud
US authorities have charged a Chinese property tycoon based in New York with orchestrating a billion-dollar fraud.
Guo Wengui and one of his business partners, Kin Ming Je, are accused of wire fraud, securities fraud, bank fraud and money laundering.
Mr Guo is a critic of the Chinese government and an associate of ex-White House chief strategist Stephen Bannon.
A fire broke out at Mr Guo’s Manhattan penthouse apartment hours after he was arrested.
A spokesman for the city’s fire department said the fire was put out, no injuries were reported and the cause is still under investigation.
In an online post earlier, Mr Guo said he was handcuffed and interrogated for more than an hour.
He later pleaded not guilty in a Manhattan federal court on Wednesday and was ordered to be detained without bail.
Mr Guo goes by several aliases including Miles Guo, Miles Kwok and “Brother Seven”. He was named in the indictment unsealed Wednesday as Ho Wan Kwok.
The indictment alleges that Mr Guo and Mr Je raised $1B from thousands of online followers who thought they were funding media businesses and an exclusive membership club.
They also allegedly used a cryptocurrency called Himalaya Coin to steal millions from investors.
Mr Guo’s opposition to the Chinese Communist Party and his links to high-profile, right-wing US politicians and activists earned him hundreds of thousands of online followers, most of them Chinese people living in Western countries.
Prosecutors say he took advantage of his prolific online presence to raise money for his ventures. But instead of being invested in businesses, the funds were allegedly funnelled into personal accounts tied to Mr Guo and Mr Je.
Among other things, the money was spent on a 50,000 sq ft (4,345 sq m) mansion in New Jersey, Lamborghini, Bugatti and Ferrari sports cars, and nearly $1m worth of Chinese and Persian rugs.
Prosecutors say $100 million was put into a high-risk hedge fund and other money was spent on luxury goods including a $140,000 piano, a $62,000 television and a $53,000 fireplace log cradle holder.
Starting in September last year, the US government seized approximately $634m of the proceeds from 21 different bank accounts.
The indictment alleges that Mr Guo built his following among opponents of the Chinese Communist Party by founding two non-profit organisations.
Also the U.S. prosecutors alleged that Guo has harassed his critics, including having “mobilized his followers” to protest outside a Canadian journalist’s home in 2020.
Those daily demonstrations in Surrey, B.C., led to a physical assault on one of the journalist’s friends, who was kicked in the head, suffering a facial fracture, swollen-shut eyes and a lost tooth. The journalist was Surrey resident Gao Bingchen and the assault victim was his friend and fellow advocate on Chinese human rights issues, Louis Huang.
The protesters, who call themselves citizens of the “New Federal State of China,” said in 2020 that they were demonstrating outside the homes of suspected spies working for China, who had been “distorting the truth” about the origins of the COVID-19 virus.
Gao Bingchen said on Wednesday, “I’m worried that even if jailed, Guo will still find other ways to mobilize his followers.”
Guo’s attorney did not immediately comment.
Here’s what we know about a very complicated situation.
Who is Mr. Guo?
He was a real-estate developer who reportedly became one of China’s richest men before leaving the country in 2014.
In 2017, he claimed political asylum in the United States, alleging persecution by Communist Party authorities.
Mr Guo has been the target of social media campaigns backing the Chinese government, but has also been accused of spreading false rumours about Covid and other subjects on his social media accounts and websites.
Why did Guo flee China to the United States?
Guo was once believed to be among the richest people in China. He left in 2014 and sought political asylum in the U.S. during an anti-corruption crackdown led by President Xi Jinping that ensnared people close to Guo. Chinese authorities have accused Guo of rape, kidnapping, bribery and other offences.
Guo has argued that the allegations against him in China were false, saying they were intended to punish him for outing corruption and criticizing leading figures in the Communist Party.
For years, his case was the subject of a debate over whether China was abusing international law-enforcement co-operation efforts, including Interpol, in seeking his arrest.
What is Guo’s ‘New Federal State of China’ group and what does it want?
The goal of the New Federal State of China, declared in June 2020 by banners carried by aircrafts flying over American cities, is to take down the Chinese Communist Party and create an alternative Chinese state.
The group promotes its messages through social media sites such as Twitter and YouTube as well as an online ecosystem of proprietary websites and video-streaming platforms such as G News and GTV — named after Guo.
But targets of the group’s alleged harassment say that while the organization has a purported anti-Beijing stance, it actually sought to silence veteran critics of China’s government —including journalists, lawyers and activists.
In October 2020, the Star viewed a series of videos of a man listing names of people including Gao Bingchen and telling his supporters that “they all deserve to die.” The man in the video looked and sounded like Guo Wengui, multiple people listed in the video told the Star. He was wearing a hat with a “G” logo and sunglasses. Most of the people listed in the video as “traitors” appear to be pro-democracy figures who are openly critical of Beijing.
In another video shared from the GTV platform, Guo’s face was clearly shown, and he says, “Let’s eliminate traitors in the world. … Let’s finish with these traitors first,” but he does not list any names.
In Texas, Christian Pastor Bob Fu, who’s a prominent advocate for Chinese dissidents with his NGO, ChinaAid, said that shortly after Guo’s videos were posted, dozens of protesters gathered outside his home. Days later, he received online death threats and bomb threats.
“Federal FBI and local law-enforcement had to evacuate us from our home to an undisclosed safe location,” Fu told the Star.
What is Guo’s connection to Steve Bannon?
As Guo lived in New York as a fugitive he became an outspoken critic of the ruling Communist Party and developed a close relationship with Bannon, U.S. president Donald Trump’s former political strategist. Guo and Bannon in 2020 announced the founding of the ‘New Federal State of China’ initiative that they said was aimed at overthrowing the Chinese government.
It was on Guo’s 150-foot (45-metre) yacht that Bannon was once arrested on federal charges of defrauding online donors in the name of helping build Trump’s southern border wall. Before he left office, Trump made the case against Bannon dissolve with a pardon.
Bannon’s public role as co-founder of the “New Federal State of China” and frequent appearances with Guo on social media videos lent legitimacy to Guo among some Americans, alleged Teng Biao. The Star has not received a response to a request for comment from Bannon’s public relations manager.
What are the U.S. fraud conspiracy charges against Guo?
U.S. prosecutors accuse Guo of lying to his hundreds of thousands of followers, promising them outsized returns if they invested or fed money to his media company, GTV Media Group Inc., his Himalaya Farm Alliance, G’CLUBS and the Himalaya Exchange.
Guo appeared in federal court in New York on Wednesday.
The top federal prosecutor in Manhattan, U.S. Attorney Damian Williams, said in a release that Guo was accused of “lining his pockets with the money he stole, including buying himself, and his close relatives, a 50,000 square foot mansion, a $3.5 million Ferrari, and even two $36,000 mattresses, and financing a $37 million luxury yacht.
In court papers, prosecutors asked that Guo be held without bail because of the risk he could flee and “the danger he poses to the community.” They say Guo would face more than 100 years in prison if convicted of all charges. They also say he claims less than $100,000 in assets even though he lives lavishly.
Part of the article was reported by BBC.