NEW YORK—U.S. prosecutors have arrested exiled Chinese businessman Guo Wengui, accusing him of orchestrating a scheme to defraud more than $1 billion from his online followers.
Guo, also known as Miles Guo, faces an 11-count indictment charging him with wire fraud, securities fraud, bank fraud, and money laundering, according to a Justice Department statement.
U.S. authorities seized about $634 million in illicit funds from Guo’s 21 different bank accounts between September 2022 and March 2023, according to the statement. The department stated that it seeks to forfeit the funds that they believe constitute proceeds from his alleged fraud. A Lamborghini Aventador SVJ Roads that Guo allegedly acquired with proceeds of the scheme was also confiscated on March 15.
Guo was arrested in New York on the morning of March 15. His alleged co-conspirator and financier, Kin Ming Je, also known as William Je, is currently at large.
The prosecutors said Guo had used the funds that he “stole” to enrich himself and his family, including by buying a 50,000-square-foot mansion, a $3.5 million Ferrari, two $36,000 mattresses, and financing a $37 million luxury yacht.
The U.S. Securities and Exchange Commission (SEC) has filed a parallel civil suit against Guo and Je.
“We allege that Guo was a serial fraudster, who raised more than $850 million by promising investors outsized returns on purported crypto, technology, and luxury good investment opportunities,” said Gurbir S. Grewal, director of the SEC’s division of enforcement.
“In reality, 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.”
The 52-year-old Chinese billionaire fled to the United States in 2015 and bought a penthouse apartment at a hotel overlooking Central Park. He gained a substantial online following as a vocal critic of the Chinese Communist Party in about 2017 and exploited his fame to solicit investments, court filings state.
In one scheme, called the farm loan program, Guo and co-conspirators gained about $150 million by promoting Himalaya Farm Alliance, a collective of informal groups located in cities around the world, according to prosecutors. Part of that money covered maintenance expenses of the 145-foot luxury yacht that Guo’s close relative owns, and about $10 million went to personal bank accounts controlled by Je, the department said.
G|CLUBS, a purported online membership club, siphoned about $250 million in funds by promising to be “an exclusive, high-end membership program offering a full spectrum of services” and “a gateway to carefully curated world-class products, services, and experiences,” prosecutors said. With the funds, Guo purchased a 50,000-square-foot New Jersey mansion and various furnishings, such as Chinese and Persian rugs worth approximately $978,000, a $62,000 television, and a $53,000 fireplace log cradle holder, according to the indictment. The G|CLUBS proceeds also funded a custom-built Bugatti sports car worth roughly $4.4 million, according to the document.
Guo also promoted a purported cryptocurrency “ecosystem” called Himalaya Exchange, advertising a trading coin and a purported stablecoin called the Himalaya Dollar with a fixed 1-to-$1 value backed by reserves, according to court filings. Neither could be traded anywhere other than on the Himalaya Exchange.
The SEC in September 2021 charged three entities related to Guo over illegal unregistered offerings of stocks and digital assets. The agency stated that it subsequently collected more than $454 million from the companies that it’s distributing to victims, after the firms agreed to settle the case without admitting to or denying the SEC’s charges.
Guo filed for bankruptcy in February 2022 after a New York judge ordered the businessman to pay $134 million to a creditor.