Chinese businessman arrested in $1 billion fraud conspiracy

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FILE - A Twitter page of Chinese exiled businessman Guo Wengui is seen on a computer screen in Beijing, Aug. 30, 2017. The self-exiled Chinese businessman long sought by the government of China, and known for cultivating ties to Trump administration figures including Steve Bannon, was arrested Wednesday, March 15, 2023, in New York on charges that he oversaw a billion dollar fraud conspiracy. Guo Wengui, also known as Ho Wan Kwok, and his financier, Kin Ming Je, were charged in an indictment in Manhattan federal court with various charges, including wire, securities and bank fraud, authorities said. (AP Photo/Andy Wong, File)

NEW YORK – A business tycoon long sought by the government of China and known for cultivating ties to Trump administration figures including Steve Bannon was arrested Wednesday in New York on charges that he oversaw a $1 billion fraud conspiracy.

Guo Wengui, 54, was accused along with his financier and chief of staff of various crimes, including wire and securities fraud. He was charged in court papers under the name Ho Wan Kwok.

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U.S. prosecutors said the indictment stemmed from a complex scheme in which Guo lied to hundreds of thousands of online followers in the United States and around the world before misappropriating hundreds of millions of dollars.

At an arraignment in Manhattan federal court Wednesday, Guo pleaded not guilty through his attorney. One of his lawyers did not immediately comment.

The top federal prosecutor in Manhattan, U.S. Attorney Damian Williams, said in a release that Guo was charged with “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.”

Guo was once believed to be among the richest people in China. He left in 2014 during an anti-corruption crackdown led by President Xi Jinping that ensnared people close to Guo, including a top intelligence official. Chinese authorities have accused Guo of rape, kidnapping, bribery and other offenses.

Since then, he has been highly sought by that nation’s government, relying on the U.S. for protection.

As he lived 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 in 2020 announced the founding of a joint initiative they said was aimed at overthrowing the Chinese government.

Guo has long argued that the allegations against him in China were false, saying they were intended to punish him for publicly outing corruption there 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 cooperation efforts, including Interpol, in seeking his arrest. He sought political asylum in the U.S., saying he feared that if he were forced to leave the country, it might lead to his arrest in a nation with less power to resist Chinese demands.

It was on Guo's 150-foot (45-meter) yacht that Bannon was once arrested on federal charges. Just before he left office, Trump made the case against Bannon dissolve with a pardon.

Guo was arrested in his sprawling luxury apartment at the Sherry-Netherland, one of the storied Manhattan apartment hotels overlooking Central Park. Hours later, firefighters extinguished a smoky blaze on the same floor as Guo’s penthouse. It wasn’t immediately clear if the fire was in his home or related to his arrest.

Guo’s initial appearance before Magistrate Judge Katharine H. Parker lasted only about 15 minutes because he agreed to be detained until his lawyers can prepare an argument for bail.

Guo's business associate, Kin Ming Je, 55, who had been living in London, England, was indicted in the case but has not been arrested.

Yanping Wang, described as Guo’s chief of staff, faces charges including conspiracy, wire fraud and securities fraud. Her bail was set at $5 million, but she was ordered to be held until certain conditions are met. She was placed under house arrest at her Manhattan apartment.

Prosecutors asked that Guo be held because of the risk he could flee and "the danger he poses to the community.” They say Guo has harassed critics and would face more than 100 years in prison if convicted of all charges.

U.S. prosecutors accuse Guo of promising outsized returns to people who invested in his media company, GTV Media Group Inc., his so-called Himalaya Farm Alliance, G'CLUBS and the Himalaya Exchange.

Since September, the U.S. government has seized approximately $634 million from 21 bank accounts associated with Guo.

Federal agents have also seized assets including a Lamborghini Aventador SVJ Roadster. In addition to his Manhattan apartment, they said he owns a $26 million mansion in Mahwah, New Jersey and a Connecticut residence worth several million dollars.

Prosecutors said Guo surrounded himself with around-the-clock armed security guards and traveled among his homes in a caravan of luxury automobiles.

The Securities and Exchange Commission also brought civil charges against Guo on Wednesday, accusing him of deceiving investors through dishonest online and social media posts and videos, including some that claimed a crypto asset called “H-Coin” was backed by gold reserves.

The SEC said illegal schemes included raising $452 million through an unregistered stock offering that was supposed to go toward building a social media platform independent of the Chinese government's censorship and monitoring.

In court papers submitted in their detention request, prosecutors also cited dozens of civil lawsuits Guo has been engaged in since arriving in the United States, saying he “used litigation and pressure tactics” to confront critics.

Prosecutors also questioned Guo's conduct related to a bankruptcy filing in Connecticut, where he told the court he had $500 million in debts and no more than $100,000 in assets. They wrote that he has publicly harassed the court-appointed bankruptcy trustee and publicly attacked his critics, turning “the ire of his hundreds of thousands of followers against them.”

They said he encouraged his online followers to flood the bankruptcy docket with claims regardless of their merit in a bid to obstruct the proceedings.

In 2020, prosecutors said, Guo “mobilized his followers” to protest outside a Canadian journalist's home, leading 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.

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