Crypto News

Exiled Chinese businessman Guo Wengui has been arrested on US fraud allegations

US prosecutors have accused Guo Wengui, the Chinese businessman and Communist government critic who fled to New York and allied himself with prominent Chinese hawks, of being a serial con man who funded his lavish exile through a series of investment scams.

Guo was arrested Wednesday on charges including fraud, conspiracy and money laundering in connection with an alleged scheme to embezzle more than $1 billion from thousands of his online followers.

He is accused of lying to people who have invested in a number of ventures including his Citizen Journalism media venture, an elite membership service and an alleged new one cryptocurrency.

Much of the money was spent on luxury items, real estate and a $3.5 million Ferrari and to cover expenses related to his $37 million yacht, the 38-page indictment said Federal Court in the Southern District of New York was unsealed. About $100 million was invested in a “high-risk hedge fund” that ended up losing $30 million of the money, the complaint said.

William Je, a Hong Kong and British citizen who US authorities said was Guo’s financial adviser, was also named as a defendant in the indictment on 11 counts and faces an additional charge of obstruction of justice. The US Securities and Exchange Commission filed parallel civil charges against both men on Wednesday.

Guo arrived in the US from China in 2014, allying himself with foreign dissidents and China-hawks, including Steve Bannon, former President Donald Trump’s former White House adviser. He is known by a variety of names including Miles Guo, Miles Kwok, and Ho Wan Kwok.

In 2020, Guo solicited $452 million for his media company GTV via an unregistered securities offering that prosecutors said was backed by 5,500 backers, and raised another $150 million through loans he said were in GTV Shares could be converted.

He also raised $250 million for a membership program that provides “a gateway to carefully curated, world-class products, services and experiences,” according to the indictment, and another $262 million for a cryptocurrency project called the Himalaya Exchange. Guo released a music video for a song called “HCoin To The Moon” to promote one of his cryptocurrencies, and Je pretended that another of his cryptocurrencies was used to buy a Ferrari, according to court documents.

“We allege that Guo was a serial fraudster,” said Gurbir Grewal, director of the SEC’s Enforcement Division. “In reality, Guo used the hype and attraction surrounding crypto and other investments to bully thousands and fund his and his family’s lavish lifestyle.”

According to the criminal complaint, money was funneled through more than 500 accounts held in the names of more than 80 companies or individuals in order to disguise the sources of the luxury spending.

Damian Williams, the US Attorney for the Southern District of New York, said Guo “led a complex conspiracy to defraud thousands of his online followers out of over $1 billion[and]is charged with stuffing his pockets with the stolen money”.

An attorney for Je declined to comment. According to prosecutors, he remains at large. A lawyer representing Guo did not immediately respond to a request for comment.

In 2021, three Guo-affiliated media companies, including GTV Media Group, paid $539 million to settle previous SEC civil lawsuits for issuing illegal securities.

Source: Crypto News Deutsch

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