Bannon-allied Chinese billionaire arrested on fraud charges

Federal prosecutors in New York arrested exiled Chinese billionaire and Steve Bannon ally Guo Wengui Wednesday morning on charges that he and his financier orchestrated a more than $1 billion fraud scheme aimed at Guo’s hundreds of thousands of online followers.

Guo, who also goes by the name Miles Kwok, and his financier, Kin Ming Je, were charged in a 12-count indictment with wire fraud, securities fraud, bank fraud and money laundering. Je, who remains at large, was also charged with obstruction of justice.

A lawyer for Guo didn’t immediately respond to a request for comment. He is set to make an initial court appearance Monday afternoon.

In 2020, Bannon was arrested on federal fraud charges while aboard Guo’s yacht. Bannon pleaded not guilty and was subsequently pardoned on those charges by former President Donald Trump.

As part of the investigation of Guo by federal prosecutors, authorities seized $634 million in alleged fraud proceeds from 21 different bank accounts between September 2022 and March 2023. On Wednesday morning, they seized other assets allegedly purchased with fraud proceeds, including a Lamborghini.

According to the indictment, Guo also treated himself and his relatives to a $26.5 million 50,000-square-foot mansion outfitted with $978,000 worth of Chinese and Persian rugs, a $3.5 million Ferrari, a $140,000 piano, two $36,000 mattresses, and a $37 million luxury yacht, all purchased with stolen funds.

Federal prosecutors said the alleged scheme centered on GTV Media Group, Inc., Guo’s social media platform, and a handful of other entities, including G Club Operations, a “purported membership organization” owned by Guo and Himalaya Exchange, “a purported cryptocurrency ‘ecosystem,’” owned by Je. Between April and June 2020, Guo and Je took in more than $400 million through an illegal private stock offering related to GTV called GTV Private Placement, according to the indictment.

Guo told potential investors, in materials written by Je, that GTV would be 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, block-chain technology and real-time interactive communication,” according to the indictment.

More than 5,500 investors purchased about $452 million worth of GTV common stock, the indictment says, but rather than the money being used to develop the GTV business, it was instead deposited into bank accounts held in the name of GTV’s parent company, which was owned by a relative of Guo.

Guo and Je also allegedly fraudulently obtained more than $150 million in funds through a “collective of informal groups” called the Himalaya Farm Alliance, and prosecutors said the two transferred $20 million in proceeds to a relative who used $950,000 to pay for a flight crew on a private jet and $5 million to an entity owned by Guo’s spouse.

The pair also solicited funds for their online membership club, taking in about $250 million in fraudulent gains, according to prosecutors, by promoting “an exclusive, high-end membership program offering a full spectrum of services” and “a gateway to carefully curated, world-class products, services and experiences.” In reality, prosecutors said, the club had just a handful employees and offered “few to no discernable membership benefits.”

And they fraudulently took in $262 million through their cryptocurrency “ecosystem” the Himalaya Exchange, according to prosecutors, promoting the product with a music video featuring an original song called “HCoin To the Moon” showing Guo in “various luxury locations.”

The charges against Guo were made public in New York as a trial is set to get underway in federal court in Washington later this month for hip-hop star Pras Michel, who is accused of taking part in a multi-million-dollar, unregistered lobbying campaign for China aimed in part at securing Guo’s deportation from the U.S.

Michel, a member of the legendary Fugees trio, is charged with failing to notify U.S. authorities that he was acting on behalf of former Chinese Vice Minister for Public Security Sun Lijun and Jho Low, a Malaysian businessperson facing a U.S. investigation and eventually criminal charges in connection with the collapse of the 1MDB sovereign wealth fund.

Prosecutors allege that Michel sought to persuade the Obama administration and, later, the Trump administration to drop or settle the probe into Low and to expel Guo from the U.S., potentially in exchange for China releasing U.S. citizens or residents it was detaining. The charges against Low remain pending and Guo was never deported.

Michel, who has pleaded not guilty, also faces campaign finance and witness tampering charges in the same case charging him with acting as an unregistered foreign lobbyist.

Josh Gerstein contributed to this report.