Chinese billionaire Guo Wengui, the exiled businessman and vocal critic of Beijing with ties to former President Donald Trump adviser Steve Bannon, was charged with fraud after the U.S. seized $634 million linked to his alleged crimes.
Arrested Wednesday at 6:24 a.m. by FBI agents at his luxury apartment in Manhattan’s Sherry-Netherland hotel, Guo was later brought before a judge over the alleged billion-dollar fraud.
But first, in a strange turn of events, a two-alarm fire broke out on the hotel’s 18th floor, where Guo — also known as Miles Kwok — lives. The New York Fire Department is investigating the blaze.
And now Guo will spend the night in jail, after pleading not guilty and consenting to detention. He will stay there if a judge doesn’t grant his planned application for release on bail.
Guo and his financial adviser, Kin Ming Je, were charged with conspiracy, wire and securities fraud and money laundering, detailed in a 38-page indictment unsealed Wednesday. Je is at large, Manhattan U.S. Attorney Damian Williams said in a statement.
$3.5 million Ferrari
Guo and Je conspired to cheat thousands of victims out of more than $1 billion using “a series of complex fraudulent and fictitious businesses and investment opportunities,” prosecutors alleged. The two used more than $300 million of the proceeds to benefit themselves and their families, according to the indictment.
Among the spoils the government listed are a $26.5 million mansion in New Jersey for Guo and his family, a $37 million yacht, a $3.5 million Ferrari and a pair of $35,000 mattresses.
Guo, a sharp critic of the Chinese Communist Party, was known for making claims of political corruption against high-level party officials, including on YouTube and Twitter. Living in exile in the U.S. since 2015, he has seen his Chinese and Hong Kong assets frozen amid investigations into his finances. He sought political asylum in the U.S. in 2017 after the regime sought to arrest him through Interpol.
The 54-year-old businessman, an associate of Bannon, has long been the subject of legal wrangling. In 2020 Trump fundraiser Elliott Broidy pleaded guilty to illegally lobbying Trump’s White House to seek the extradition of Guo and squelch the investigation of 1MDB, the Malaysian fund at the center of a global bribery scandal. Trump later pardoned Broidy.
Bannon, the chief strategist of Trump’s victorious 2016 presidential campaign, was on board Guo’s yacht in 2020 when he was arrested for fraud in connection with a nonprofit group that took private donations to build a wall on the U.S.-Mexico border. Bannon, whom Trump pardoned on the federal charges, still faces related charges in New York state court and has pleaded not guilty.
Several hours after Guo’s arrest, the fire department declared the two-alarm blaze. Several firetrucks and a Police Department Bomb Squad vehicle were parked outside the hotel. FBI agents conducting a search of Guo’s residence were expected to return to continue their work after fire officials determined it was safe, said a person familiar with the matter, who spoke on the condition of anonymity because it wasn’t public.
The hotel lobby, right by the famed Harry Cipriani restaurant, was jammed with federal agents, emergency responders and fire department investigators on Wednesday afternoon. A firefighter who didn’t identify himself said no one was hurt.
The fire was reported at 12:02 p.m., as smoke coming from an outlet, and was under control before 2 p.m., fire department spokesman Jim Long said.
The Sherry-Netherland was the site of a far more serious fire in 1927, which The New York Times described as turning the hotel “into a blazing torch” only months from its opening.
‘Serious risk of flight’
The indictment of Guo and Je includes 11 criminal counts against them both and one charge of obstruction against Je, who is also known as William Je. The most serious charges, including fraud and money laundering, carry a maximum sentence of 20 years in prison.
At his initial court appearance late Wednesday, Guo was dressed in black and sported a gray beard and round glasses. He wore headphones to hear an interpreter translate the proceedings into Mandarin. Smiling, he wagged a finger playfully at someone in the gallery. He entered his not guilty plea through his lawyer at the hearing, Tamara Giwa.
Prosecutors are seeking to have him confined before trial, arguing in a letter to U.S. Magistrate Judge Katharine Parker that he poses “a serious risk of flight,” based on the charges, his wealth and his lack of strong ties to the U.S.
They also claim he poses a danger to the public if released on bail. Guo “has caused severe economic distress to many, and has threatened those who complained about his criminal acts,” they said in the letter.
Giwa had no comment outside court afterward.
Prosecutors seized the $634 million from 21 bank accounts tied to the alleged fraud, which they say Guo and Je committed through a series of securities offerings, Williams said in the statement. A Lamborghini Aventador is among the seized assets.
One of the fake business opportunities the government says Guo and Je touted involved the Himalaya Exchange, a cryptocurrency “ecosystem” that featured the Himalaya Dollar, pitched as a stablecoin. To cover their tracks, they allegedly employed a money-laundering network involving more than 500 accounts held by at least 80 people and entities, according to the US.
Je is a dual citizen of Hong Kong and the UK who lived in London at the time of the alleged crimes. The US claims he ran numerous companies and investment vehicles involved in the scheme and was its financial architect and money launderer.
The Rule of Law Society
In 2018, prosecutors said, Guo set up two groups, the Rule of Law Society and the Rule of Law Foundation, to attract people who supported his efforts against the Communist Party.
Prosecutors claim Guo and Je solicited money from their followers for an unregistered stock placement for their GTV Media Group, selling $452 million in common stock. The government says the pair reaped another $262 million from the Himalaya Exchange pitch. The Wall Street Journal reported in 2020 that Bannon and Guo were two of the main people behind GTV.
No wrongdoing is alleged against Bannon, who isn’t mentioned in the indictment.
The criminal charges follow a lawsuit earlier in the day by the US Securities and Exchange Commission.
The criminal case is U.S. v. Ho Wan Kwok, 23-cr-00118; the civil case is Securities and Exchange Commission v. Ho Wan Kwok, 23-cv-02200; US District Court, Southern District of New York (Manhattan).