- Mike Wendling
- BBC News
U.S. authorities have charged a New York-based Chinese real estate tycoon with orchestrating a billion-dollar scam.
Guo Wengui and one of his business partners, Yu Jianming, were charged with cyber fraud, securities fraud, bank fraud and money laundering.
Guo Wengui is a critic of the Chinese government and is associated with former White House chief strategist Stephen Bannon.
Hours after Guo Wengui’s arrest, a fire broke out in his Manhattan loft apartment.
A spokesman for the FDNY said the fire had been extinguished, no injuries were reported, and the cause of the blaze was still under investigation.
Earlier, Guo Wengui posted on the Internet that he was handcuffed and interrogated for more than an hour.
He subsequently pleaded not guilty in Manhattan federal court on Wednesday (March 15) and was ordered to be detained without bail.
Guo Wengui had several aliases, including Miles Guo (Miles Guo or Miles Kwok) and “Seventh Brother”. He was named Guo Haoyun in the indictment unsealed Wednesday.
The indictment alleges that Guo Wengui and Yu Jianming raised $1bn (£830m) from thousands of online followers who believed they were funding media businesses and an exclusive membership club.
They are also accused of stealing millions of dollars from investors using a cryptocurrency called Himalayan.
Guo Wengui’s anti-communist stance and his connections to some prominent right-wing American politicians and activists have earned him hundreds of thousands of followers online, mostly ethnic Chinese living in Western countries.
Prosecutors say he used his online presence to fund his speculation. However, the funds were not used to invest in the business, but instead were allegedly diverted into private accounts related to Guo Wengui and Yu Jianming.
The money was used to buy a 50,000-square-foot (4,345-square-meter) mansion in New Jersey, as well as Lamborghini, Bugatti and Ferrari sports cars, as well as nearly $1 million worth of Chinese and Persian carpet.
Prosecutors allege that $100 million was put into a high-risk hedge fund, while the rest was spent on luxuries, including a $140,000 piano, a $62,000 television and a $53,000 Dollar fireplace log brackets.
Since September last year, the U.S. government has seized about $634 million in funds from 21 different bank accounts.
The indictment alleges that Guo Wengui gained a large following among opponents of the Chinese Communist Party through the creation of two nonprofit organizations.
Guo Wengui, a real estate developer, was reportedly one of the richest men in China before leaving the country in 2014.
In 2017, claiming persecution by Communist authorities, he applied for political asylum in the United States.
Guo Wengui has always been the target of pro-Chinese government social media public opinion, but at the same time, he has also been accused of spreading false rumors on social media and websites about issues such as the new crown epidemic.
His public stance against those in power in China led him to work with Bannon on some projects. They often appear together in online videos, and in 2020 they launched a movement called the New Federation of China, which aims to overthrow the Chinese Communist Party.
Later that year, Bannon was arrested on Guo Wengui’s yacht in Connecticut. He was charged in an unrelated fraud case, alleging that he conspired to defraud people from donating money to a nonprofit company to build a U.S.-Mexico border wall.
He has denied the charges, and he was not mentioned in the case of Guo Wengui and Yu Jianming.
Last year, Guo Wengui’s GTV Media Group also paid $539 million to the U.S. financial watchdog, the Securities and Exchange Commission, to settle a case in which it misled investors about a cryptocurrency investment project.
Yu Jianming, also known as William Je, served as Guo Wengui’s financial advisor in the indictment. Authorities say he holds both British and Hong Kong passports, lives in London and is still at large.
He is registered with the UK Companies House as a director of two London-based financial services companies – ACA Capital and Hamilton Investment Management.
Some of the bank accounts in which U.S. authorities have seized funds are linked to Hamilton and another to Gettr, an alternative tech social media platform partially funded by Guo Wengui.
The BBC has attempted to contact the companies.
One of Guo’s foundations issued a statement saying the allegations against him were “fabricated and baseless” and that the U.S. judicial system was controlled by the Chinese Communist Party, although no evidence was given.
Mainland China’s reaction
When asked about his opinion on the case, Chinese Foreign Ministry spokesman Wang Wenbin did not answer directly on Thursday (March 16), saying that he “has noticed relevant reports.”
Regarding the news of Guo Wengui’s arrest and prosecution, mainland Chinese media reported on Thursday with a brief release.
The report called Guo Wengui “an Interpol Red Notice fugitive who fled to the United States,” and quoted the U.S. Department of Justice as saying that he “used defrauded money to satisfy himself and his family.”
Guo Wengui reportedly ran a real estate empire in China and had political and economic ties to senior Chinese government officials — Ma Jian, a former senior intelligence official, admitted to taking more than 100 million yuan worth of money from Guo in a 2017 confession video property and provide benefits to it.
The Chinese government accused Guo Wengui of bribery and embezzlement in 2017, while Guo was accusing Wang Qishan, then secretary of the Central Commission for Discipline Inspection, of corruption — allegations that have not been substantiated.
Guo Wengui applied for political asylum in the United States in the same year, but the Wall Street Journal pointed out that when Sino-US relations were tense, Guo Wengui’s connections with Trump, Bannon and other American right-wing politicians made him a controversial figure in the United States.
The newspaper quoted Teng Biao, a Chinese human rights activist in the United States and a visiting professor at the University of Chicago (UChicago), as saying that Guo Wengui’s followers had distributed leaflets at his door, calling him a “CCP spy.”
Teng Biao told the Wall Street Journal that Guo Wengui escaped judicial prosecution in China thanks to the protection of powerful people.
According to reports, a public document from the year before last showed that Guo Wengui’s application for political asylum in the United States was still pending.