Exiled Chinese Billionaire Charged in New York with Financial Conspiracy

Guo Wengui, a fugitive financier and associate of Steve Bannon, is accused by federal prosecutors of engaging in a complex scheme to bilk thousands of online followers.

· Complex conspiracy to defraud thousands of his online followers out of at least $1 billion, the authorities said.

· “Guo was a serial fraudster,” Gurbir S. Grewal, the S.E.C.’s director of enforcement, said in a statement. “Guo took advantage of the hype and allure surrounding crypto and other investments to victimize thousands and fund his and his family’s lavish lifestyle.”

Guo Wengui, a fugitive Chinese billionaire, was arrested on Wednesday (15.03.2023) morning in New York on charges that he orchestrated a complex conspiracy to defraud thousands of his online followers out of at least $1 billion, the authorities said.

A federal indictment unsealed in Manhattan charged that Mr. Guo and a co-defendant took advantage of Mr. Guo’s “prolific online presence” to solicit investments in various entities and programs “by promising outsized financial returns and other benefits.”

Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement that Mr. 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.” The money was also used to finance a $37 million luxury yacht, Mr. Williams said.

Mr. Guo, who is also known as Miles Kwok, is a business associate of Stephen K. Bannon, a onetime top adviser to former President Donald J. Trump. It was on a yacht belonging to Mr. Guo that Mr. Bannon was arrested in a fraud case in August 2020; Mr. Trump later pardoned Mr. Bannon, who had pleaded not guilty to those charges.

Mr. Guo was arrested by the F.B.I. on Wednesday at his apartment in the Sherry-Netherland Hotel, a bureau spokesman said.

A lawyer for Mr. Guo had no immediate comment. Mr. Guo was taken to a brief court appearance on Wednesday wearing a pullover, black cargo pants and black sneakers. He smiled and waved to several spectators, and entered a not guilty plea through an attorney. He was ordered detained pending further proceedings.

For six years, Mr. Guo has been seen as a vocal critic of the Chinese Communist Party, endearing himself to some conservatives in the United States and many members of the Chinese diaspora. The U.S. attorney’s office issued a news release announcing his arrest in both English and Chinese.

In 2017, Mr. Guo applied for asylum on grounds that his attacks on top officials had made him “a political opponent of the Chinese regime,” one of his lawyers said at the time.

At the same time, Mr. Guo was trying to ingratiate himself with the Trump administration. In early 2017, Mr. Guo posted pictures of himself at Mr. Trump’s Florida resort, Mar-a-Lago, where Mr. Guo was then a member. Several months later, he told his many followers on social media that he had booked meetings at the Trump International Hotel in Washington.

According to the indictment, Mr. Guo, a co-defendant and other co-conspirators in 2018 began using fraudulent and fictitious business and investment opportunities to solicit, launder and misappropriate money from their victims.

In one case, the indictment says, they posted a video on social media to announce a stock offering for a purported news-focused social media platform based in New York called GTV Media Group. It was promoted as the “first ever platform which will combine the power of citizen journalism and social news with state-of-the-art technology, big data, artificial intelligence, blockchain technology and real-time interactive communication.”

Over six weeks in 2020, the indictment says, about $452 million worth of GTV common stock was sold to more than 5,500 investors in the United States and abroad. But prosecutors said much of that money did not go to developing and expanding the business. For example, prosecutors said, $100 million was invested in a high-risk hedge fund for the benefit of GTV’s parent company and its owner, a close relative of Mr. Guo.

In another scheme included in the indictment, Mr. Guo and others were accused of inducing people to invest more than $250 million in something called G|Clubs, which claimed on its website to be “an exclusive, high-end membership program offering a full spectrum of services.” To join, prospective members paid a one-time fee, ranging from $10,000 to $50,000.

In reality, the indictment said, G|Clubs “provided nothing close to ‘a full spectrum of services’ and ‘experiences’ to its members.”

Rather, Mr. Guo and his co-defendant, Kin Ming Je, misappropriated much of the money, the indictment charged. The indictment says $26.5 million in G|Clubs funds went toward the purchase of Mr. Guo’s mansion in New Jersey; more went to pay for extravagant renovations there, and for furniture and decorative items, including Chinese and Persian rugs worth close to $1 million, a $62,000 television and a $53,000 log cradle for a fireplace.

The Securities and Exchange Commission, in a parallel civil action, sued Mr. Guo.

“Guo was a serial fraudster,” Gurbir S. Grewal, the S.E.C.’s director of enforcement, said in a statement. “Guo took advantage of the hype and allure surrounding crypto and other investments to victimize thousands and fund his and his family’s lavish lifestyle.”

Mr. Guo’s legal woes span the Pacific. The U.S. charges against Mr. Guo echo those that the Chinese government made against him in 2017, when he was accused of bribery and embezzlement. Until he left China in 2014, Mr. Guo oversaw a property empire whose centerpiece was a hotel, residential and office complex in Beijing overlooking the venue for the 2008 Summer Olympics.

In his native China, he also forged political and financial ties with influential officials, including a senior intelligence officer, Ma Jian, who in 2017 made a videotaped confession admitting to taking more than $8.7 million in gifts from Mr. Guo in exchange for favors.

Mr. Guo was ruthless with those who got in his way. A Beijing vice mayor who stood between him and the property rights for the Olympics venue was felled when Mr. Guo obtained a video of the official having sex with a mistress.

Mr. Guo rose to fame in 2017 when — far from Chinese justice in his newly purchased home at the Sherry-Netherland on Fifth Avenue in Manhattan — he hurled public accusations of corruption against Wang Qishan, then China’s anticorruption czar, saying his family owned secret stakes in a major conglomerate. The Times could not substantiate Mr. Guo’s claims.

At the Sherry-Netherland, Mr. Guo lived a life of opulence. British bodyguards controlled access to his $68 million 18th-floor penthouse, where he served guests Opus One wine. Mr. Guo liked to show guests his closet full of tailored suits and posed — like a James Bond villain — with his snow-white bichon frisé puppy.

After Mr. Guo’s arrest on Wednesday, there was a fire on the hotel’s 18th floor around noon, according to the New York Fire Department. Nicholas Biase, a spokesman for the U.S. attorney’s office, said the fire was under investigation.

Mr. Guo’s home in Beijing — a spectacular lakeside courtyard mansion just to the north of the Communist Party’s leadership compound — was in 2017 valued at $230 million by one local real estate agent.

But the creditors who had lent tens of millions of dollars to Mr. Guo hounded him as he made his way from Beijing to his life in exile in New York. One financial firm sued to seize the penthouse apartment. In 2022 Mr. Guo declared personal bankruptcy, listing assets of no more than $100,000 against liabilities of as much as $500 million, Reuters reported.