Chinese businessman arrested in billion-dollar fraud conspiracy

NEW YORK (AP) — A business mogul long wanted by the Chinese government and known for cultivating ties to Trump administration figures, including Steve Bannon, was arrested in New York on Wednesday for overseeing a fraudulent conspiracy to a billion dollars.

Guo Wengui, 54, and his financier, Kin Ming Je, have been indicted in Manhattan federal court charging them with various crimes, including embezzlement, securities fraud and bank fraud. Guo was charged in court documents as Ho Wan Kwok.

US prosecutors say the indictment stemmed from an elaborate scheme in which Guo lied to hundreds of thousands of online subscribers in the US and around the world before embezzling hundreds of millions of dollars .

Kin Ming Je, 55, was not arrested. Guo was scheduled to appear in court on Wednesday. His attorney did not immediately comment.

Manhattan’s top federal prosecutor, U.S. Attorney Damian Williams, said in a statement that Guo was accused of “lining his own pockets with the money he stole, including buying himself and those close to him , a 50,000 square foot mansion, a $3.5 million Ferrari, and even two $36,000 mattresses, and financing for a $37 million luxury yacht.

Guo was once considered one of the richest people in China. He left in 2014 during an anti-corruption campaign led by President Xi Jinping that ensnared people close to Guo, including a senior intelligence official. Chinese authorities have charged Guo with rape, kidnapping, bribery and other crimes.

Since then, has been much wanted by the government of that country, counting on the United States for its protection.

While living in New York as a fugitive, he became an outspoken critic of the ruling Communist Party and developed a close relationship with Bannon, President Donald Trump’s former political strategist. Guo and Bannon announced in 2020 the creation of a joint initiative which they claimed was aimed at overthrowing the Chinese government.

Guo has long maintained that the allegations against him in China were false, saying they were aimed at punishing him for publicly exposing corruption there and criticizing Communist Party figures.

For years, his case has been the subject of debate over whether China was abusing international law enforcement cooperation efforts, including Interpol, to seek his arrest. He requested political asylum in the United States, saying he feared that if he was forced to leave the country it could lead to his arrest in a country less able to resist Chinese demands.

It was on Guo’s 150-foot (45-meter) yacht that Bannon was once arrested on federal charges. Just before leaving office, Trump had the case against Bannon dissolved with a pardon.

US prosecutors accuse Guo of lying to his victims, promising them outsized returns if they invested or contributed money to his media company, GTV Media Group Inc., his so-called Himalaya Farm Alliance, G’CLUBS and the Himalaya Exchange.

Williams said that between September 2022 and this month, the US government seized approximately $634 million from 21 bank accounts, representing the majority of Guo’s alleged fraud proceeds.

He said law enforcement also seized assets purchased with proceeds from the alleged fraud on Wednesday, including a Lamborghini Aventador SVJ Roadster.

The Securities and Exchange Commission also filed civil charges against Guo on Wednesday, saying in a Manhattan federal court filing that Guo had led others to commit multiple frauds since April 2020.

The SEC said Guo targeted retail investors through online and social media posts and videos, deceiving them with lies such as a claim that a crypto asset security called “H-Coin “was backed by reserves of gold.

The SEC said Guo and Je raised approximately $452 million through an unregistered offering of GTV common stock from April 2020 to June 2020, saying they would “build the social media platform and the most popular and secure transaction, independent of Chinese government censorship and surveillance, enabling the people of China and the world to realize freedom of speech and commerce.

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