Former White House chief strategist Steve Bannon greets fugitive Chinese billionaire Guo Wengui before introducing him at a news conference November 20, 2018 in New York.
Don Emmert | AFP | Getty Images
Controversial exiled Chinese billionaire Guo Wengui – an aide to former Trump White House adviser Steve Bannon – was arrested in New York on Wednesday for allegedly orchestrating a complex $1 billion fraud scheme that fooled online followers with promises of outsized investment returns.
Guo reportedly used some of the money he raised through his company GTV Media and other companies to purchase a 50,000-square-foot mansion in New Jersey, a $37 million yacht, a $3.5 million Ferrari Buying a $140,000 Bösendorfer piano and two Hasten 2000T mattresses for his son cost a whopping $36,000 each.
Prosecutors seized more than $650 million in alleged fraud proceeds from 21 different bank accounts and assets, including a Lamborghini Aventador SVJ Roadster, as part of the case against Guo and his financial adviser William Je in federal court in Manhattan.
Guo, 52, is scheduled to appear in court on Wednesday afternoon.
A fire broke out when FBI agents searched a Manhattan penthouse apartment owned by Guo on Wednesday, an agency spokesman said. Agents noticed smoke from a light fixture and called ET 911 around noon.
The New York Fire Department extinguished the fire, the cause of which is being investigated by a bomb squad. Guo was in custody before the fire broke out.
Read more about CNBC’s political coverage:
- Trump extends lead over DeSantis in new poll on possible GOP primary
- Trump Super PAC accuses Ron DeSantis of ‘shadow’ presidential bid in ethics complaints
- The DOJ is charging Chinese businessman Guo Wengui, associate of Steve Bannon, with $1 billion in fraud
- Pfizer has to pay Medicare rebates for five drugs under the Biden plan to reduce Rx costs
- Leading Senate Democrats are urging DOJ and SEC to investigate whether Silicon Valley Bank executives broke laws
- Apple, Amazon and Google are likely to get a reprieve from the GOP-controlled house over antitrust legislation
- Warren unveils bill to reverse Trump-era banking deregulation that she says led to the collapse of SVB and Signature
- Chuck Schumer will donate campaign donations from ex-CEO of Silicon Valley Bank, PAC, to charity
- Biden announces new plans to curb gun violence, months after the Lunar New Year mass shootings
- Senate Democrats are asking Walmart, Costco, Albertsons and Kroger to sell the abortion pill mifepristone
- Russian jet crashes US drone over Black Sea
The Securities and Exchange Commission separately filed a related civil lawsuit against Guo and 56-year-old Je, who resides in the United Kingdom and Hong Kong and remains at large. The SEC accuses Guo and Je of involvement in unregistered and fraudulent financial offerings.
The SEC separately accused Guo of making false statements when he raised hundreds of millions of dollars from investors through a cryptocurrency asset known as H-Coin.
Last September, three Guo-affiliated companies, including GTV Media, agreed to pay nearly $540 million to settle civil SEC allegations of illegal offerings of stocks and digital assets.
Guo, who goes by several different names including Miles Guo and Miles Kwok, Brother Seven and The Principal, has lived in the United States since 2015 after fleeing China, allegedly to avoid looming corruption charges.
In 2018, he founded two non-profit organizations, the Rule of Law Foundation and the Rule of Law Society, which engaged in a public relations campaign against the Chinese Communist Party.
Guo “used the charitable organizations to attract followers who were consistent with his purported political goals in China and who were also inclined to believe [Guo’s] statements regarding investment and money-making opportunities,” said the U.S. Attorney for the Southern District of New York in a statement on the criminal case.
Bannon, who served as senior White House adviser to former President Donald Trump for less than a year, served at times on the board of the Rule of Law Society.
In June 2021, Guo’s two nonprofits hosted a private party in New York attended by Bannon, former Trump attorney Rudy Giuliani, former Trump National Security Advisor Michael Flynn, and Trump ally and conspiracy theorist Mike Lindell, CEO from MyPillow, attended.
In August 2020, federal authorities arrested Bannon on one of Guo’s megayachts off the Connecticut coast on charges of diverting money to the We Build the Wall fundraiser. Months later, just before Trump left office, he pardoned Bannon in that case.
“Lady May” yacht, owned by Chinese billionaire Guo Wengui, in Long Island Sound.
Last month, an attorney for Hunter Biden, son of President Joe Biden, sent Guo a letter demanding that he keep all records on Hunter Biden. The letter was sent two months after Mother Jones magazine detailed how, during his association with Giuliani, Bannon “had arranged for Guo and his followers to disseminate salacious videos and images of Hunter Biden’s laptop,” reported by a computer workshop in Delaware.
A 12-count grand jury indictment released Wednesday alleges Guo and Je “conspired to defraud thousands of victims” in the scheme, which spanned from 2018 to this month.
The alleged conspiracy involved using various facilities and programs to obtain investments from the victims, who were duped by false disclosures and misrepresentations, prosecutors said.
“Kwok has lied to its victims and promised them inflated returns if they invest or give money to GTV [Media]its so-called Himalaya Farm Alliance, G|CLUBS and the Himalaya Exchange,” prosecutors said in a press release.
Guo and Je are charged with wire fraud, securities fraud, bank fraud, and money laundering.
Je is also charged with obstruction of justice for allegedly trying to wire money related to the conspiracy to the United Arab Emirates since last September, after US authorities served seizure warrants on several banks to steal about $355 in proceeds to confiscate millions of dollars from the alleged fraud.
Both Guo and Je face up to 20 years in prison if convicted in the criminal case.
Gurbir Grewal, director of the SEC’s Enforcement Division, called Guo “a serial scammer who has raised more than $850 million by promising investors inflated returns on alleged crypto, technology and luxury investment opportunities.”
“In reality, Guo used the hype and attraction surrounding crypto and other investments to victimize thousands and fund his and his family’s lavish lifestyle,” Grewal said.
The SEC’s complaint said an example of Guo and Je’s alleged fraud was a private placement of GTV Media Group common stock.
“Guo and Je allegedly diverted $100 million in investor money to a hedge fund for the sole benefit of a company owned by Guo’s son,” the SEC said.
And Guo reportedly embezzled investor proceeds in two other bids to pay more than $40 million to purchase and renovate the New Jersey mansion and buy the Ferrari for his son, the SEC said.
— WNBC’s Jonathan Dienst contributed to the coverage