Chinese billionaire living in US arrested for allegedly running $1 billion fraud scheme

Federal prosecutors have announced the arrest of exiled Chinese businessman ‘Miles Guo’ and his financial adviser ‘William Je’ on charges related to fraud of more than one billion dollars.

Guo, whose real name is Ho Wan Kwok, goes by many other names such as Miles Kwok, Guo Wengui, Brother Seven and The Principal, while Je’s real name is Kin Ming Je.

Damian Williams, the U.S. Attorney for the Southern District of New York, along with Michael J. Driscoll of the FBI announced the unsealing of 12 counts against Guo and Je, which included bank fraud, securities fraud, wire fraud and money laundering dirty money tariff. Je was also charged with obstruction of justice.

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Guo was arrested at The Sherry-Netherland Hotel in Manhattan on Wednesday morning, while Je is currently at large.

All the charges stem from a scheme by Guo, Je and others to pool investments from multiple schemes and divert those funds into bank accounts, hedge funds and expensive markets.

For example, Guo used the money to buy a 50,000 square foot mansion, a $3.5 million Ferrari, two $36,000 mattresses, a $37 million yacht, a $62,000 TV, a $4.4 million Bugatti, and a press release $53,000 for a fireplace from Williams. ‘office.

“As alleged, Ho Wan Kwok, known to many as ‘Miles Guo,’ led an elaborate conspiracy to defraud thousands of his online followers of over $1 billion,” Williams said. “It is alleged that Kwok lied to his victims and promised them large returns if they invested in or provided money to GTV, the so-called Himalaya Farm Alliance, G|CLUBS and Himalaya Exchange. Kwok is also accused of laundering hundreds of millions of stolen funds for to conceal the illegal activities of the conspiracy and to carry on the operations of the fraud.”

From 2018 to March 2023, Guo and Je allegedly conspired to defraud thousands of victims out of over $1 billion, and Guo was the ringleader of the operation.

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Guo has lived in the US since 2015 and in 2018 founded two non-profit organizations called the Rule of Law Foundation and the Rule of Law Society to build a fan base aligned with his policy goals in China and believed his statements about investing and making money.

The program the two men managed included four parts: GTV Media Group, Inc. Private Placement, the Farm Loan Program, G Club Operations, LLC and Himalaya Exchange.

GTV Private Placement launched in 2020 and was billed as a “broadcast media company,” according to a post by Guo on social media.

Between April 20, 2020 and June 2, 2020, approximately $452 million of GTV common stock was sold to more than 5,500 investors who believed their money would be used to grow the business. But in June 2020, the private placement closed and Guo and Je allegedly redirected $100 million of the funds to invest in a high-risk hedge fund on behalf of GTV’s parent company, the US attorney said.

Similarly, the two men are accused of fraudulently obtaining more than $150 million through the Himalaya Farm Alliance, a “farm” of informal groups located around the world, making false statements to investors and soliciting loans with promises that they would be converted into GTV common stock . .

In July 2022, Guo sent a video on social media promoting the Agricultural Loan Program and told investors GTV was valued at US$2 billion, but according to the US attorney, it was worth much less.

Some of the funds raised through the Farm Loan Program were embezzled including $2.3 million used to cover maintenance on a 145-foot luxury yacht and $10 million transferred to personal bank accounts for Je and his wife.

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Through G|CLUBS, an “exclusive, high-end membership program offering a full range of services,” Guo and Je allegedly fraudulently obtained $250 million and embezzled some of the funds to buy his 50,000-square-foot home Guo in New Jersey, a $62,000 television, a $53,000 fireplace mantel, and a $4.4 million custom Bugatti sports car.

In the fourth part of the alleged scheme, Guo and Je obtained over $262 million through a purported gold-backed cryptocurrency “ecosystem.”

When Himalaya Coin, or HCN, began trading in November 2021, it was offered at 10 cents, and within two weeks, it was worth about $27, representing an increase of 26,900%.

US authorities issued seizure warrants between September 20 and 21, seizing $335 million from bank accounts associated with Exchange Himalaya entities and other entities associated with Guo and Je.

The US attorney said that within two days of the seizures, Je contacted the management of the t bank that held Exchange Himalaya’s bank accounts with the intention of making a wire transfer to convert 46 million Himalayan dollars into $46 million.

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“Je emphasized twice to the management of the domestic bank, in substance and in part, that the transfer of $46 million had to be made ‘today or it is meaningless.’

Ultimately, US authorities seized additional funds from both the men and their entities, totaling more than $634 million.

The Securities and Exchange Commission also accused Guo and Je of engaging in “unregistered and fraudulent offerings” that raised more than $850 million.

“…Since April 2020, Guo, also known as Ho Wan Kwok, Miles Kwok, Wengui Guo and Brother Seven, and his long-time financial advisor, Je, also known as Kin Ming Je, embezzled a large portion of funds raised. by investors to enrich themselves and their family members, who are named as relief defendants,” an SEC press release said Wednesday. “For example, in connection with a private placement offering of common stock in GTV Media Group, Inc. (GTV), Guo and Je allegedly siphoned off $100 million of investment funds in a hedge fund for the sole benefit of a company owned by Guo’s son.”

The SEC also alleges that Guo embezzled proceeds from investors to buy the mansion and buy his son a $3.5 million Ferrari.

“We allege that Guo was a serial fraudster who raked in more than $850 million by promising investors big returns on supposedly good investment opportunities in crypto, technology and luxury,” said Gurbir S. Grewal, director of the SEC’s enforcement division. . “In reality, Guo took advantage of the hype and glamor surrounding crypto and other investments to victimize thousands and fund his and his family’s lavish lifestyle.”

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The SEC is seeking permanent injunctions against Guo and Je, civil penalties, disgorgement of ill-gotten gains and officer and director bars. The complaint also seeks an injunction prohibiting Guo from issuing, buying, offering or selling any security, including crypto assets, outside of his personal accounts.