Exiled Chinese tycoon arrested in USD 1bn fraud conspiracy

World Thursday 16/March/2023 04:56 AM
Exiled Chinese tycoon arrested in USD 1bn fraud conspiracy

New York : Fugitive and exiled Chinese business tycoon Guo Wengui was arrested on Wednesday in New York on the charge of financial conspiracy to defraud thousands of his online followers out of USD 1 billion, US Department of Justice's Southern District of New York said in a statement.

Guo Wengui and a co-defendant, took advantage of Guo's "prolific online presence" to solicit investments in various entities and programs "by promising outsized financial returns and other benefits." In the case, US attorney for the Southern District of New York Damian Williams said that the fugitive 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 USD 3.5 million Ferrari and even two USD 36,000 mattresses."

The money was also used to finance a USD 37 million luxury yacht, Williams said, according to the statement.

Guo, who is also known as Miles Kwok, and known for cultivating ties to Trump administration figures including Steve Bannon, who is the onetime top adviser to former US President Donald J Trump.

It was on a yacht belonging to Guo that Bannon was arrested in a fraud case in August 2020; Trump later pardoned Bannon, who had pleaded not guilty to those charges.

A lawyer for Guo had no immediate comment.

According to the indictment, Guo, his co-defendant, Kin Ming Je, who is described as a financier, and other co-conspirators engaged in a scheme beginning in 2018 to use a series of fraudulent and fictitious business and investment opportunities to solicit, launder and misappropriate money from their victims, the statement read.

In one case, the indictment said they posted a video on social media to announce the offering of stock in 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," The New York Times reported.

According to the US Department of Justice's Southern District of New York, Williams announced that between September 2022 and March 2023, the US Government seized approximately USD 634 million from 21 different bank accounts. The USD 634 million constitutes proceeds of Kwok's alleged fraud, which the Government will seek to forfeit. Today, law enforcement also seized assets that were purchased with proceeds of Kwok's alleged fraud, including a Lamborghini Aventador SVJ Roads.

Guo is an exiled Chinese businessman who has resided in the United States since in or about 2015 and garnered a substantial online following.

In or about 2018, KWOK founded two purported non-profit organizations, namely, the Rule of Law Foundation and the Rule of Law Society. Kwok used the non-profit organizations to amass followers who were aligned with his purported policy objectives in China and who were also inclined to believe Kwok's statements regarding investment and money-making opportunities.